Earnings call transcript Q4 2023

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Operator

Good afternoon, ladies and gentlemen. Thank you for joining DocuSign’s Fourth Quarter and Full Fiscal Year ‘23 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded and will be available for replay from the Investor Relations section of the website following this call. [Operator Instructions]

I will now pass the call over to Heather Harwood, Head of Investor Relations. ahead. go Please

Heather Harwood

Good and operator. Harwood, welcome the to Head Thank year afternoon, XXXX QX fiscal Investor Heather earnings DocuSign of you, Relations. and call. DocuSign’s I’m

the The press our is announcing Allan on Joining XXXX DocuSign’s fiscal quarter posted Investor release today earlier results CFO, Gaylor. our on was our CEO, issued me Cynthia Thygesen; call and and website. year fourth Relations are and today

and believe subject call best our that everyone demand some based factors with to our the of are In remind together particular, our to our in at forward-looking. expectations to estimates or today’s change. call. consider with forward-looking filings the and regarding are transformation but We and actual affecting and me are on let Please Now, performance are factors cause risks the be therefore these our assumptions risk statements of time that related our digital to pace and expectations this reasonable, and on different. subject may materially unknown this SEC, results uncertainties read statements customer they known are the content of

are assumptions to And we or new and as on forward-looking date. statements law, based to assume required of expectations by update obligation future events Any except no these statements light our in information.

During this call, financial we and GAAP will present measures. non-GAAP

weighted consider isolation results. analyzing or count non-GAAP superior information and encourage our measures share regarding from, We non-GAAP to for flows considered performance. average not measures are These GAAP you we and intended cash a our to when provide billings. In to addition, free be all substitute in

at today’s comparable refer information, and financial non-GAAP of quantitative press be our which measures our GAAP can to release, those website on a figures, found regarding the most investor.docusign.com. reconciliation information directly please earnings For

to like call the now Allan? to turn over Allan. I’d

Allan Thygesen

good Heather, and everyone. Thanks, afternoon,

of quarter with my and our first opportunity DocuSign. to fourth marked Having optimistic even many months more about five full of meet the our employees, today organization I’m future as for CEO. Our customers, DocuSign’s quarter the led partners

solid year, finish prior tangible across finishing XX% had and against versus QX and metrics the revenue up million, delivering quarter XX% We a focus making $XXX priorities. our while our year-on-year total of profitability with Driven the in for at key to came year, we progress non-GAAP transitional in $X.X for billion financial a and year the revenue key operating year. continued growth. efficiency, reported XX% on margin XX% by QX

macro to with reflected While expansion QX results, challenging be also Customer sentiment we today’s and I pleased continues that cautious, to are rates. environment. our is acknowledge want moderated in

into our as role during Before Gaylor Chair I and search been better successor. a a the of we to as her DocuSign many the well and Committee sustainable I acknowledge we know even Chief for step Audit last Board period Cynthia time company I DocuSign of CEO, as as to first has get that her to last growth support She’s strong want she’s leadership story. strategic and and a instrumental years, member X.X and and you been as laying for profitable commitment for nearly Cynthia for been we’ve partner today’s my month first Cynthia me the foundation thank change these a few to Board Cynthia as know few CFO. her I navigated to thank gotten transition part years of during of as over our know to unwavering down scale. dynamic further the a while decided at for her with great Financial news want from Officer. business updates, has her years.

business. turn to back me the Let

our to our more is deliver the key teams organization trusted refined customers. underscore strategy During communicated smarter, strategic we To to Today, place. agreements. strategic customer on we pillars value strategy throughout our our defined a how can have in easier and drive clearly focus deliver and alignment of DocuSign QX, vision, to feedback, our by greater inspired

the our strengthening go-to-market sales self-serve partnerships. reach sales by our of and experience, improving efficiency developing We’re world-class and and productivity direct a marketing amplifying our

We’re also and internal optimizing by processes. strengthening operational and our efficiency modernizing systems

market a looks the online even to replica Today Now, it’s we of opportunities emphasize eSign like. truly capitalizing provides on static beginning to important what just are e-signature, redefine that of smarter the as agreement leader the at and an a document. in reimagine

it’s convenience signers, hardly that senders productivity the and in for a While huge endpoint. and is improvement

copies reimagination a and was Just recorded of digital like or music of fundamentally long-established altering categories, use. of maps creating distribution the beginning creation,

systems. into flat agreements redefine to the an positioned DocuSign more every Our Every be it’s core value agreement turn of decisions. intelligent in to goal into business the an make is to data used uniquely and seamlessly data. of industry. agreement structured that integrated intelligent can is processes when is agreement deliver across step can automated, Value

these Along product integrations new web several during Teams, faster enabled AI-assisted highlighting and mobile document better with including Zoom. fourth capabilities quarter, collaborate eSignature, to released for Slack expanded in enhancements signing we we Microsoft to and and lines, new time the And value. for

better app which web by help to forms and WebForms experience release from will experience. we customers contract simpler moving a will and April, legacy modern a In deliver

identify fiscal plan that to to revolutionize initiate, also with in businesses agreement and negotiate we our manage while differentiated how the release simplify accelerate cycles and new XXXX innovative ways process, agreements. solutions We

in rapid advances industry There’s about substantial interest and models language AI in large particular. the in

and some to analysis generative identification, as excited and data can pattern and models very friction AI, AI harness we yet already another way increase save productivity, workflows, reduce are We sophisticated automation of contract customers’ time. leveraging we’re and our for

and of and significant we partner largest want we part are some industry, a our believe from forward, encouraged with recognize by domain us. leadership expertise and in business, our very As be the we to move these compelling of interest the our players can who

solid few flexibility. months, last seat provide available the Moving to commerce progress capacity modernizing We’ve our experience over and self-serve expanded our of ease improve reduce sites, product via We’ve mobile we’ve keep friction, initiatives. and led growth to Gain we customers updated made to available and as use in initiatives options international buying the to make exited these we process easier quarter, the more traction will our progress. web currency continue with on markets. you our and expanded

two from General company Further, as Chatwani, and ago, recognized on world-class have as driver Growth. wealth from key President you efforts have weeks a expertise insights announcement of we team brings excited to a joins our more Robert than Manager of as in scaling primary growth it DocuSign global be a for saw companies. joining of organization strategy acquisition, a his benefiting this few an area. and couldn’t I’m to in and for leading the an thrilled experience, product-led I to our and technology forward growth Robert Robert broadly look be that’s of decades customer our priority will as a He product expansion. is having Executing motion. conversion more

go-to-market. to Turning our

ahead. you We’re coming is and and global excited week, just the the tell our for off energized incredibly sales that year last I team sales kickoff can

customer direct, We’re success focused all partners, self-serve and world-class three across on provide three. through to channels: retention complementary growth in and delivering driving customer and

product. expansion, of a has and a been added in sales of is cost decade, a customer global countries. a competitor a few using As the who cycle solution quarter, multiproduct expanded past firm, growth CLM the an eSignature CLM our This leading since is and consulting process for example already competitive this in global implementing

has the the CLM customer for DocuSign internal and preferred countries integrations six built out ServiceNow. in and has continents vendor partners won and status two DocuSign However, their rolled us Salesforce systems and with since across

we restructuring. I Related was step It was a the but ahead. our for a critically of go-to-market, broad-based worldwide company for reshape rightsize reduction acknowledge recently was our decision it the difficult organization. opportunity to want was field the It our to not workforce XX% announced. in a organization to and restructuring important

Our savings segments unlock development in we our overall by all efficiency and innovation. product growth investing across profitable capture and part more go-to-market in assessment DocuSign that the of that was could more could

direct critical channel our future. to the Now, remains absolutely

We how sizes, of capabilities approach more DocuSign. our touch offering are with give a in with all lighter rebalancing engage customers experience towards they choice self-serve that

in in self-service our motion to the self-serve drive even expanded resources in to and do these long cloud customers the we’re pivot we work our up stronger growth modest some strengthen to map That, and new turn, our are an and going our for for over more X turn to road have for to workflows, for agreement And to forward while AI Still improving frees our XX the sell. valuable confident and systems. offering migration for steps, our customers our internal near-term invest and disruption, months. innovation some may That accelerating next experience see term. create right to more will capabilities, the team sales

a stronger opportunities Additionally, enable will greater internationally. motion self-serve expansion

for Turning to evolve will and around expected, joined to our bundled introduce to better to ideas incremental into new is new SMB our internal rolled we our that together saw Related Officer role transform Akram product these customers last customers. particular. pricing a these and our our packaging, features to and good Anwar out pleased strategy, and as Anwar’s efforts, internally on operations play focus initiatives. we processes, and our Operating develop Chief I’m and growth bring early-stage performed to adoption within organization. noted efficiencies that functionalities help call, I future than bundles recently more in crucial share the driving and strategies promotions

their us. a that expand suggests that broader renew features, experience adopt with customers commitment set Our and of

to adoption in bundling highest expect future, ensuring should see and the around pricing features. early our value including and You more initiatives of packaging

of Finally, like ecosystem, key strategy. on update another pillar our partner I you to would our

progress We’re part example, seeing as partners. by ServiceNow’s Spoke is software good highlighted automation launch number of of the our good largest a engine. with of CLM ServiceNow the a

Our partnership our partner leading to digitize integrating is with their organizations more with several with integration This focus agreements. has utilizing capturing applications. deeply our momentum on by opportunities aligned directly gained

defining change in year investing and organization. while We and the macro strides opportunities optimizing the this has that we has long-term DocuSign. that of closing, environment profitable we our one strategy, for for better foundation are been to evolving in rightsizing been in QX, So, believe navigate meaningful made growth. set position And incredible a enable towards our

delivering how look comes and meaningful the world DocuSign, about progress value. as together we and to We’re for to committed We optimistic forward and ahead customer initiatives on we’re agrees. our sharing shareholder the further year redefine

enable will agreements. trusted easier smarter, We and

once call her financials. me the the let thank Cynthia? turn through that, Cynthia to With walk and again over to

Cynthia Gaylor

year, fiscal kind share for strong, year-on-year. the achieved an we and XX% milestone for billion like $X.X to I’m We reflecting execution. Company, that impressive our I’d by the to Difficulty] words. out for of closed delivering revenue start [Technical the Allan, thanking Thanks, employees growth year off proud the

Our QX model position the results and DocuSign’s ecosystem. the were in durability demonstrating important in our business solid, broader

to including While our with we environment macro pleased challenging demand we expansion rates. results with execution moderating and QX, experience are a softening continue trends, in

However, me With that, use, customers are offers QX healthy are high efficient fiscal cost easy and we effective. to results. that applications seeing recognize that ‘XX as DocuSign results ROI and to let turn our

quarter, Total XX% million, million. $XXX billion, For year-over-year revenue the subscription the and XX% $X.X a subscription to reached fourth $XXX grew $X.X total and to a was over year-over-year last year increased revenue XX% increase year for revenue billion, increase. XX% revenue year-over-year

reach grew quarter. year-over-year to $XXX international the revenue XX% million in fourth Our

XX% XX% periods. year, For for revenue full representing revenue $XXX to million, the of international both grew total

million. $XXX to year-over-year XX% rose billings quarter Fourth

$X.X customers includes installed base customers increase For the direct a million reach of quarter, X,XXX year, This We new a year-over-year the XX% of our the at base approximately of total bringing to added end customer $X.XX full XX% year-over-year. to XX% year, the a increase. to increased approximately direct addition billings total XXX,XXX, during the billion. XX,XXX

total We with $XXX,XXX, in value an year-over-year a contract than also a XX% customers. of X,XXX greater increase saw annualized customers reaching

expansion seeing net for to was growth headwinds result, quarters our we’ve highlighted the of we quarter. last XXX% retention persist. rates. in Dollar muted over continued are couple And the The a as

lower. retention and in would to We net to this the trend result, continue into QX a expect QX, expect as dollar

Non-GAAP quarter XX% compared ago. year a with margin for XX% gross the was fourth

year. the quarter. was quarter Fourth subscription last For margin full with with gross XX%, in gross year, margin line was last consistent XX%,

For XX% $XXX was last compared $XXX was margin XX%, the margin versus full operating with year. reached Non-GAAP prior subscription non-GAAP XX% last QX to income also flat year, operating million compared million gross year. years.

million income in year, and versus was For the full operating fiscal $XXX non-GAAP to XX% XXXX. margin XX% rose operating XX%

was quarter. workforce in QX, the last for saw $XXX $XXX the expenses to employee-related In million costs year. Non-GAAP million lower September, to margin operating quarter in which we for the compared related strong in reduction income the QX net contributed fourth of announced with

growth was fiscal $XXX net X% For ‘XX, year, in from year-over-year. $XXX million of non-GAAP full a million, up the income rate

tax calculation last As we call ‘XX on consistent we for noted rate our prior for non-GAAP on QX non-GAAP as fiscal non-GAAP our years. a year, the introduced reached profits net income three

tax ‘XX. fiscal of We rate non-GAAP for QX full while was $X.XX, non-GAAP XXXX XX% EPS a non-GAAP using are $X.XX. and was fiscal EPS year

this recent regarding restructuring. to opportunity more context the me take Let a share bit

this mentioned, not one Allan it in resources and across important efforts. product reshape a areas invest up lightly, As was decision critical and decision free innovation development strategy the aligned an to difficult but our was Company with made and to our

the to this majority the Operating year cash in completed of X,XXX a QX XX% related to a quarter with ended incurred the we charges filing by grew $XX end with to compares the with million, As $XX margin XX% outlined restructuring ago. margin. be same last the flow to quarter in X,XXX ranging $XXX and year-over-year incur the in a expenses the restructuring $XX compared year, million, cash month, XX% to related This quarter. in million We with we from QX employees of second million, of the expect last year. substantially representing

Free a year a $XX XX% to million, year-over-year. the flow XX% compared for was margin million, margin $XXX the prior, increase in XX% a cash quarter

cash we our ERP last in which As with we delayed of mentioned some on quarter. went our a QX live last new call, collections

quarter lower cash to restructuring in we result, relative a strong addition this saw basis. payments on cash collections a As

to our X% me cash, more $XXX We fiscal the to let was in full million, $XXX representing to turn and million, and than $X.X $XXX million, $XXX a declined million, For to investments. year-over-year with a that, exited billion compared to equivalents, XX% a margin XX% QX operating fiscal cash XX% restricted cash ago. year XX% XXXX. flow With QX year, cash compared margin a guidance. a Free margin cash ‘XX margin flow

preliminary ‘XX. earnings a reminder, outlook for provided QX our on a As call, we fiscal

will more move of as are We our sales macro range our and And the motion. provided, current We the and Allan of pleased realign the mentioned, we the see year. we environment shift near-term to remain anticipate we may guidance. environment QX as incorporating dynamics our challenging self-serve force the we narrow through preliminary disruption into also landing modest as to a

$X.XXX total fiscal first or $X.XXX and revenue of year fiscal billion billion to to $XXX the X% this, to fiscal for to in or in quarter we $XXX of of $XXX million to year-over-year. anticipate or revenue For QX And X% Of million ‘XX, year-over-year. million for $XXX of year-over-year. million we growth XX% or to of growth QX ‘XX X% subscription And of X% year-over-year. billion $X.XXX billion ‘XX XX% growth growth $X.XXX expect

‘XX billion in we QX X% $XXX for billion billings, million $X.XXX to $X.XXX fiscal X% to year-over-year. million $XXX or and growth year-over-year or growth to For expect flat of

both, gross and year. We to fiscal be XX% for the non-GAAP margin XX% QX to expect

reach non-GAAP XX% for expect and XX% fiscal XX% QX XX% to We margin for to operating ‘XX. to

of non-GAAP disciplined expect weighted profitability challenging and ‘XX. We and committed will are remain million Fiscal of our strategic diluted navigate priorities. fiscal ‘XX we progress at with million to $XXX to and delivering average a sustainable was with continue outstanding and are across execution a both pleased as making we for the our macro we and growth environment. We fully we $XXX year shares to investments scale, QX transition, be

long-term delivering on and to employees partners, focused customers, our are value We shareholders.

look forward. encouraged journey you The forward no DocuSign as to now. I played brings value how testament and taking are longer, important here has the to I’ll the agrees. a the be so billion to an in on little work finally, updating have our goodbye’s to hard role customers. been are to move forward said, future. progress and we Allan steps Together, for world we while a $X.X And ahead, our compelling proposition we as Looking by look we the

that, the call we will for And with Operator? questions. open up

Operator

polled we questions. be please, [Operator for Instructions] will you. One Thank moment,

from with first Our comes America. question Bank of Brad Sills

Brad Sills

Oh, you. with that? you. you. where the of a that? you Cynthia, the might enterprise it your on Was been great. the that segments next one across pleasure to saw quarter. It’s that the during saw certain any it a ask on broader move. Thank congratulations that you have customer Thank wanted moderating you expansion working in I Was board? occur? seen Was base? that or any cohort just Just on And it cohort color activity

Cynthia Gaylor

Thanks, Brad. Yes.

that it’s book the few grown we’ve which think about are been customers So, the a is macro the is, over rate trend from I has quarters, last which I of think at the softened, continuing on rate, the environment expansion slowing. as and expanding talking has -- business

rate growth slowing. that So and expansion is

would of QX in I trend the the change big say, line. so, a some continuing on top And quarters putting that’s but pressure it there wasn’t is before relative a to couple

On overall, on do, the But the which I actually lot probably expanding of And cohorts, would rate we at say at numbers more the you need of little past analysis in and moderating as a book are we’ve it’s are the some quarters, I’d in. talked some cohorts a part business is, move that say same cohorts. about bit dollars a to do expanding. it slower And they’re a of is more law having the gets of as expansion of of impact. and large bigger, rate

probably look the those top compression of some when line, the of so impacting biggest growth kind And But customers are that’s factor expanding. still at the of rates. you

Operator

Brent Thill with Jefferies. from is question Our next

Brent Thill

just like you expect of you wake kind how full resume this Allan, turbulence send Can And quick just a for had sales kind organ through to follow-up talk long you feel the of you Cynthia. when strength? to on I the sales overhaul.

just Just of us of as from billings what to kind growth you it a you’re decel relates XX% Can the sense to that? into X%. give factoring

Allan Thygesen

Brent. go Thanks, I’ll first.

I the more sales ago. I more than significantly with in a got, nice execution, stable force, has I’d months think little could the us could keen a that. there very gave in a Attrition up restructuring fact felt that we on of think, as sales place. take capacity in Part invest bit excess better done of free we rates slowed. what elsewhere. of think situation so we pretty X, XX a job we and team as our the well Steve we There’s had resources are confidence predictability. was say, full was, better We’ve to action what and see I that have where understanding capacity to deinvest a and

in to they’re could And little quarters. the a relatively bit previously the force the a some global presenting of is territories, best map. that last low place while. actually more that being think now we’re it’s there sales should very have But incredibly just be X in kickoff energized quick week over So, slightly larger disruption had particularly all out by saying think We our our road in they that of I the very too. I do them touch, to think motion. try order for end, X little in we’ll I’m cautious been of saying play had a some But business particularly human -- of that I as the the might a through have bit self-serve

the think, I sales team. feel positive throughout very a it’s So,

Cynthia Gaylor

international billings misspoke take I’ll I on I do before question. realize But that, the revenue. I

million. So clarify, grew to $XXX just XX% international revenue to

there. just think I a clarification $XXX said million, I

to quarter, is, things. question, think couple slower billings of the year. to about the we last I it’s expecting related a On a we’re start as One talked

we which we could haven’t look think think made maybe fields, environment, could worse. certainly a at you you some and gotten the have I macro that, probably gotten changes just sense top little some cause bit on And the better disruption. when of to we

playing giving we’re into billings the revenue both So the guide I think and to certainly year. the that’s

what to can always also I’d we say guide see. we

given that I the rest think to to we move we investments can year QX, better kind see of than of start we some the as the X% we year. guide see take the would in hold. improve through expect But we QX and of can may the

think of I those some kind dynamics the of... are So

Operator

Our next Jackson with question SVB. is from Ader

Jackson Ader

and place at tough on don’t given I’d DocuSign environment scrutiny one, like -- a is of coming where of something. so your quick bunch IT and invest environment, envelopes? does it need as were people would a the more and very many are they it macro macro that actually payback, ROI would customers First it down the actually the the impact be Is how getting traditionally I e-signature But are surprised like macro the think a be item you? if environment. or number budgets employees is willing to in just line

So, how do that? I square

Allan Thygesen

for Thanks the question. Yes.

others. and The particularly all is first spend software, than on businesses thing just don’t think But a and environment less or macro ours. including say would to we’re affects I sizes overall the of willingness of little ability more I macro their kinds sensitive all

terms the have In if little tougher. over mix a of will, real sectors few have you the little to do estate economy, of other that a and industry we a been exposure, in bit

diversified sectors and real telecommunications. in On the are some hand, like manufacturing, other we have health and quite strength

balancing that’s out. So

prop, the value your agree with statement. of In terms I

very there’s payback. think a I quick

I think we’re seeing that.

other proposition So they of competitive key and experience. part have customers likely They’re competitors, people fast. faster to DocuSign’s positive more a respond respond a -- to an tend that’s to more respond to -- they’re vis-à-vis better and also value They’re agreement.

So some for overall, sizes. clouds companies all of environment macro of I think the budgets presents IT

are are our We the exposure quite company strong. little average maybe more than generally a prop I vertical And but seeing pretty value remains balanced. think bit

Jackson Ader

guidance quick Cynthia, -- preliminary the the kind factored the margin call? was quarter’s given, for of was restructuring much of like a that round then last follow-up. how of And second very Okay. year All right. on Great. The into

Cynthia Gaylor

the for Thanks question.

year this restructuring the time provided. the So strategic Difficulty] the to factored our that baked as part we plan in across in annual that be areas invest was were priorities. at we for want not outlook clear, fiscal or the to recent we the provided, contemplated in scenarios evaluating specifically wasn’t the But of we [Technical most outlook into

That I articulated, said, we the for to it is as invest R&D priorities. needed in being [Technical shift And annual well initiative clear and the the self-serve. PLG process key across we was the some plan through in of particular went kind more the Allan and of room investments into think Difficulty] that as innovation as of that as investment

to we above So, able outlook come little the a bit were we provided.

If you XX% remember a in to XX%, year which XX% is is QX XX%, on is for of to long-term the our range XX% our margin, XX%. low we the said guide end target at reminder, the target range, long-term as and to

be we reinvesting, So, we margin a by to going little are the bit. also increased but

Operator

Our Radke next Citi. is with question from Tyler

Tyler Radke

reorg you the sale the your is the when self-service? industry where at of do you you strategy kind size, just maybe move kind to threshold what have back elaborate on going kind a for elaborate and And to like deal make and if Is salespeople of that? that do could forward it the model. I on and CLM? certain or vision the could sales was for a a specialization, of by becomes or is Company? only Just self-serve If -- it wondering moving just you

Cynthia. a follow-up just then, for quick And

I next for and lot savings. a seeing here QX seen basis we’ve to cumulative why year? XX% workforce. in margin You -- that given the cost on Just XX% risk did non-GAAP think about that What the wouldn’t of be EBIT of from higher you’re of benefits the I close was a without a margins guess,

year, So I wouldn’t lower higher margins XX% that headcount? why guess, see we given next in

Allan Thygesen

I’ll Yes. one. the first take

we want in for continue But direct Company, been That’s the improve areas. two customers historically, want we as sizes. it’s it go-to-market sales customers. sales heavily to of little for And customers our at direct just We So, appreciate focused very their really feel our can And our to us. retain with with a that’s we applications. we self-serve I’ll that stages of ISVs to a And -- huge in second. that to not all go-to-market, we can focused channel, some types for to all all is be markets, international back partner we strength motion. with for where And One an directly of will activities has then on maturing just of there. in sizes. motion complement certain the all think on distributors a DocuSign for opportunity and customers to just journey go-to-market self-serve third, use that in certainly and we are their resellers embedded and come principal partner

activity what significant can have improve. there, We meaningfully

a return self-serve We quickly sales self-serve themselves offer complement positive a customers that see treating to me it’s to want separate to opportunity clear, And options to as self-serve many our over want the Let channels direct teams the will particular. as stop time. to the in activities. if piece I expect want essentially of make want as and I and that. when we corollary, they I sure then wish. digital customers sales And their to avail all to

digital I did companies think Atlassian, that’s are that think of that’s and I did what Robert have their think I natively do, we lot what a at a tremendous amount in I of and we Google, think at opportunity that’s motion there.

that’s do second our the half? go-to-market want to So take you overall plan. Cynthia,

Cynthia Gaylor

Sure. Yes.

higher restructuring. a understand couple was fall the the just So question. than our XX% of is would QX, margin rate probably gone had I say for One what I we is through reasons. the totally steady

then, the quarter. was in anticipated in than QX dropped So in And addition, margin. that the had we slower hiring to really

strategic and the talked front want product, the then the in So as of innovation pillars PLG of we year, in us, in priorities self-serve. kind right, into see of we about, to opportunity look into key the in this invest that Allan and we

to money level business And that areas. second putting really set we’re key the the those back so, into against really from restructuring

Operator

question from next Oppenheimer. with Our George comes Iwanyc

George Iwanyc

Allan, product that into seeing, and competitors? you’re in put on bundling color of rates seeing can us perspective maybe the some what SMBs adoption the also digging with maybe you’re traction you give from

Allan Thygesen

Yes.

a basis, to on Cynthia we portfolio. very all, of all, and first of have balanced So segment customer a I first alluded think this,

mid-market significant there’s a on particular and know I emphasis know some and have challenges SMB. think are that don’t we don’t a enterprise between I’d business. huge business companies I So, big sectors. on And balance, say our a SMB seeing reporting growing in that. I we’re in momentum those difference

had we on nice fact, in momentum new accounts some particular. In

pleased was to So, I see that.

in part What of was was terms think piece. that the question? the of I -- your segment other

George Iwanyc

on Just perspective what a you competitive competition. think from

Allan Thygesen

more don’t last I the Okay. three last There’s over competitive in change a is material question no know has quarters. that five that market in we’re competitive. to here the gotten how seeing few years, it the

think continue think spend the to way about leader. redefine I a want and you to We for the industry. And competitive set the from that’s I don’t much standpoint, be as the doing to are what time people really that. think worrying category we’re I direction our we And we’re where focused doing, if we other well will. market on

market. looking possible a too by and In agile the be we terms countries where of by be as how gotten the and a country. as little on few There packaging pricing we can segment, tactics, far are off might we’ve

opportunities during we’re remarks. so, mentioned at carefully. looking I some that my And bundling prepared very

a there’s enterprise there. There’s license think opportunities agreements. lot we So, of some

want every Some to of deploy eSignature want that. solution largest where we really in to customers, -- ubiquitous our the they for instance

direct the both agreements sales as is our possible well of so as that large in and for license that enable as out for so structuring we’re embedding in And attractive as that building clients. to the our product process

Cynthia Gaylor

there ran our would around bundles on just I seats. around SMB, the did increasing particularly in experiments One QX, -- relative we see we add strength business. of across relative or some we number see could the -- some And thing

So, points. price of lower higher of volume deals we a at did SMB see kind

we So, NewCo higher volume, like in lower sign, mentioned. price, positive which was especially thought, a Allan as

So more little color just a there. bit

Operator

Our with Needham & next question from Company. is Scott Berg

Scott Berg

map to think leveraging of Congrats focus what little seems to the a my months? guess, Is in some I a at your going solutions on assumptions could be something maybe But to least because the invest are over is theme uplift to that little going the that an what forward an give strategy finish your of road your to transformational a bit comments, on strong sales WebForms is product be wanted should Or product of forward. I where going that forward? you product? about bring XX next, more bookings there off of WebForms I to how XX see more to Allan, we it small maybe add-on know, product year. want likely may product going don’t billings more to be opportunity from like or and big

Allan Thygesen

has a potential that. WebForms more Yes. Actually, bit than little think I

easier agreement other We’re very does, much it the really really of it to agreements, with And data think in because thing form new customer the course, we’re transformation I completely -- makes it the sort optimistic static where it is of the epitomizes heading the around all to of experiences. it longer capture which traditional representation a of a is term. meta

into the dynamic agreements both and the And we is of from first what signer lines. step filled you to to those the can year side decompose lot we process. the want There’s is along be that coming WebForms more think from a objects side. in of the that As customer with data remainder want about do

on bullish some we’re all quite version launches. will of cumulative obviously, those X.X So, But the of impact gaps. have

on the of I I piece. we -- of a the there. opportunity AI have think piece, touched terms a little In transformational lot I

product to over is will doing new And leverage in this that that as the time, we work so, making AI some area. we on have think how that some -- completely exciting. beginning a And be the we revamp now very announcements we’re spring, later I of

the competitors So, and think of and and And of we -- do analogy other an be we now a the that. the text the lot ChatGPT that space, captured there’s excitement the very you has value contracts. absolutely agreement obvious that space and think to agreement that’s right around there, exciting of will AI and the pursue are in about if application basically around generation, to drafting

number on really to going growth. of delivering could that deliver if data got an where we the search at area agreements out think with extraction and from compelling look incredibly of and couple value you terms a very hit analytics provide where our work type that. don’t AI to apply and the who positioned of next not large can you And But, in would that’s I very that. actually to it’s it be of and vision, well AI map exciting think And us more I excited next-generation of of are transformational are as -- agreements, as the in on companies activity. customers on and that’s But to also quarters. longer-term in we uniquely value find the value, the road

Operator

next Our with Jaluria is RBC Rishi Capital question Markets. from

Rishi Jaluria

Two here.

kind of should there routes First, about to yourselves especially think anything From that the mid-market right? makes your a customers, of -- of outside wanted the actually you PLG. or customers, sense capabilities. kind start should be motion I efficiency intuitive and product that a even strategy self-service around lot we a self-service more make do Allan, help of need mobile of is well. I easier, think PLG to as more to more reembracing self-service and ton If standpoint, your there

that invest or I’ve you got from perspective? And follow-up. anything Just then, in a to a need product expand

Allan Thygesen

Yes.

can of don’t deploy our them more we of already engage and DocuSign is So, self-serve, But embrace that your course, talking really when forces sales can look, they can’t engaging customers a I’m a all, then yes, discover, you do, and and website. apply ever transformational we on really where efficiently. try, effort more is think, order expressed a first and first about And with employee, can products hear website people significantly without we I have and with demonstrated and what as of they can. potential people yes, think

becomes multiplier model that’s efficiency that over it very teams. in that Atlassian And the sales had pioneered to our DocuSign. at excited huge has So, a like apply time and for companies

certainly that. in terms application customer, scope applies purely digital profitable the basically we would and then the SMB both of and necessary true remaining resources segments, love an for can those imagine how you becomes potential that more it’s customer a more that sales for customer. across and grow complexity, In us But and of as customers

move do a as Mid-market out so, from -- we for has you strength heavier there important really of start you there. up and expect lot remains A market. core of as always been a sales and -- And I it products our segment. a component us grow you sort

So, for motion I’ve segment just -- I will described. that a self-serve for think and very the expanded self-serve DocuSign that critical remain relevant

Rishi Jaluria

recall to then really especially was of last And there as international when in All front, is, software. you unique it comes the enterprise quarter, especially talk a of Japan, helpful. which on I know, That’s with kind right. closer Wonderful. working partners, right, geography, very

kind the your wondering building is competition, you a update better ecosystem, that especially significantly But can and behind. out of an the than of need modernized, your there’s in feels least if viewed it as at because in Just efforts they processes on manual great and little Japan. kind be specifically give lot Japan out of a the product to partner branding bit like feel

I Japan kind hear to opportunity how love partners Thanks. -- there. of think thinking would about the I So, you’re and

Allan Thygesen

Yes.

think is fully say I great agree position. with up how potential. discussions I active Germany you, market where And we’re our we I’d internally in starting we want to pursue have to don’t in are We a another lived exactly Japan.

were didn’t all in you quite think, go behind including markets into U.S. enough and resources I forays sales administrative with road direct just to companies of Japan. Japan, initial product those is the Our the tried as and littered our really like mostly to both put, functions, markets functions. a noted, other We that motion. have And it

to leveraging there. partners going certainly we’re So be

tuned. stay So

to in I ‘XX. to and think pursue our decisioning planning how course But strategy. going those are that. exactly fiscal within strategic now, we’ll countries international But definitely report right of both more of the those on the have priorities of we’re during it’s broader sort

Operator

next question from Michael with is Our Wells Fargo. Turrin

Michael Turrin

Great. the potentially the that efficient are Can appreciate range within growth harder But bit just base you’re that already target I appreciate even some more seems the the could background, product-led the of operating on push a of I you think it business. the little I out margin? core like taking question. digging the you fact questions given stated

the do tough that with product So, where potentially the decision around bit why back reinvesting don’t cuts have little and again more emphasis decision? not balancing into the are you’re making And a you making go right another the sure to what size here? versus informs make

Allan Thygesen

at reallocated point say, Look, I highest I’d investment. first this the and see the feel of to we where with you. all, we like turned Yes. resources well have agree pretty organization we’d

accelerate part our and beyond we ready that -- top want think we I of we have, emphasis time. getting I there be efficient to Until were this -- says, not will assume to and -- be at lot make a see time. -- the you would that certainly over expectation us I forecast from can increasingly efficient that over Cynthia to we what what sales efficient, on hope I’m to But more of any line a even improve but efficiency don’t project and as sufficiently be can don’t perspective. that time. we hope see. make want I not but we marketing And that,

Michael Turrin

Thank you.

Allan Thygesen

and the on three one get got there we out piece. feel a whole and to years. And and outlined little in I would have incredible think, QX, I’m investment we very last have market-leading coming to have in the call. some growth had that on product a quarters, us to that significant a We next that point been, maybe of larger We I and value stuff in it position and excited other couple the over opportunity. for capitalize But us years. more remains be innovation already say the reinvigorate think -- I the opportunity the will earlier underinvested And on feels team lot -- the this proposition. future will -- over I an we

Operator

Our is with question next from Stanley. Morgan Josh Baer

Josh Baer

characterizing I for you think well question. XXXX Allan, in a the year change. Thanks labeled it as of Great.

frame change, ‘XX what’s year stabilization, is XXXX innovation, the if of you the Is Like, would word So, self-serve? XXXX? year execution, use it what of? to

Allan Thygesen

Yes.

transition ‘XX. and -- I ‘XX change calendar think fiscal for

are we that. growth, setting think -- really about and foundations year, we’re leaning it’s for I For the into this

have I a fantastic pointed to very were TAM large capitalize on we think opportunity that we believe at. this

market leader e-signature the in CLM. We are and

to We opportunity, are to go on position execute. just capitalize the we best that need in and

quite preparation not growth this So, much more a foundation of year. for building it’s of as transitional as year and a that’s turnaround the job last year, year. It’s much

Josh Baer

That’s And one great. other one. then,

versus about three in partner thinking do you channels, mix direct where to years? and the go versus of today self-serve, Just that -- business want where what’s

Allan Thygesen

is digital. can fact mean, we’ve our that there’s small the past lot only website. you I options that a XX% But of profits that find reported of the think number business associated Yes. I a on our is and in that by of

order And to so, a learn even from to sales I I I been to relative when will small pushing joined. have to which slightly customers actively we’ve shocked rep admit was

a other our versus our business. rep sales is cases, lot dramatically what’s all to be talk the And it’s -- because going their may I’m a grow So, talk goal not about now direct of things. as pieces the digital order things to from to customer about may sure what’s year and -- to the of digitally in meaningful some

little clear. a less bit the whole so, And thing becomes

perspective, we’ve a business, in meaningful externally reported a It’s partner in a don’t of directly a partner that’s think partners minority touched, mix. our terms it’s smaller. I partner of our From little sold,

need example. grow -- have but to I up well just alluded developers opportunity our to We There’s today, in of those do both workflow products some comments, agreement I this set today. into big not third-party to market-leading as of We embed a serve signature my meaningfully. think to directly don’t we’re that products. one

exact to the That’s of most couple and the agreement a to going to really componentized a But choose compelling products. I’m all experiences at this growth of things work provide driver. to of a that comment their to create on magnitude. world-class set really going we the to important allow pick got not we’ve have of be So tools developers from do inside quarters time

Operator

is question Materne with Kirk next Our ISI. from Evercore

Kirk Materne

going sort sales Allan, or the product. I industry a way if to both into of in with the what And, you can functionality talk strategy, about over to turn of of partners? doing there you’re are build of industry sort you focus the some that is strategy wondering sort vertical the industry organization, to was meaning more terms just of

the that product basis. So, if that I kind talk on strategy just Thanks. it’s led could about you was just curious respect. in of

Allan Thygesen

Yes. would It’s great phases real for a our had of verticalization say tools strategy. the industry. we’re question. earlier of the estate We’ve long a I at suite special

work, healthcare I and for are done with and some, variety a applications, continue for growth. federal to where some used best-in-class we’ll and nice driven example, think really nice they More I to we’ve regulations that we’ve compliance some tweak recently, be healthcare that. of think, on really enables in improve added products the space, that’s our

we have are industries. can workflows I to custom opportunities think that products an sufficiently planning to have and is this we individual componentized our create part basically tailored that product easily active of our

application, you think different if and for that deeper agreements. car not I create all something already obvious mean, sectors those I vertical And example, opportunities mortgages, purchase. different So, that automotive from where have an it’s business we are have loan a from in to not we that have it’s

Another example is government.

government work space in do the opportunities we’ve that as well. you But which I have the we’re verticalization opportunity to, totally on capitalize say some fully And big I’d alluded got so, -- with. we to really to agree

Operator

question Roberge from Blair. Our Jake is William last with

Jake Roberge

or about we which products more about the those big e-signature you deeper opportunities like resources. larger R&D do mature those see of opportunities self-serve that reoptimization larger more some your the capabilities CLM, And lot -- being into and of about? forward? as going about talked move it lot a building talked is see you’ve a Allan, Is that the have less frictionless of that you’ve

Allan Thygesen

It’s of really across all those.

to So, road But into we absolutely. product the accelerating so our that, additional motion, investment cloud our like towards into directing workflow that absolutely growth dollars space CLM investment and are migration. addition accelerating and into map direct our agreement dollars in we

suite in to and there. for you really and Azure, a the with storage Microsoft some that core migration aware Microsoft. we’re the a to very some And workloads of this many compute our that relationship of migrating of is think of move core the I strong process are important year

we so, markets. can do was more that to, requirements -- investment there, more get more in do because deserving referred local get better we meet once verticalization we we can And international scalability, we felt was the can that we of of

And in ‘XX. of a completed fiscal get so -- a variety way will migration. going important this for material it year, it’s really just reasons in be really a but It won’t here we

side. for So, all investment those product PLG are beyond the areas incremental self-serve

Jake Roberge

expected then of on bundles really product Okay. examples specific in Can some helpful. which to during I That’s of provide double-click the And and those quarter. just adoption? stood terms better than products you customer bundles performing out the wanted Great.

Allan Thygesen

a earlier, was very the most customer where call I’d co-bundle, I Yes. what we say this I we bundled our had key nice a -- one, bundle. couple options, acquisition SMS a sign-on, mean, so quickly, we new And and new core alluded offering was we e-signature successful and to with of to baseline product single really services and accelerate onboarding. that a

getting we features highest are correlated good feel people helpful renewal of renewal start, customer and both for is well. value most highly Some really with and our off a as to that satisfaction

of again, the really was more most do successful, that. So to and that need we well, worked

Jake Roberge

Great. for my Thanks taking question.

Allan Thygesen

Okay.

the we’re past as driving our closing, quick, evolve this continue up just long-term In let’s was challenging, business. are growth Just changes for your our and making we to Thank vital for you wrap all support and here. to joining while success. year

vision year, and will we prioritizing increased I you. look areas, to our employees taken customers, value and year investment we’ve accelerate and delivered shareholders. as improve you progresses. forward our innovation, about we our Thank go-to-market to really we agreements. to are steps and the for trusted a finish smarter, easier solid excited with think which of drive support I on believe the more the focus the diversify sharing all I’m our and of

Operator

conference. today’s concludes This

your time, we you and You thank for may your lines participation. this disconnect at

DocuSign (DOCU) 9 Mar 232023 Q4 Earnings call transcript