DOCU - Earnings call 4 2024

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Operator

Good afternoon, ladies and gentlemen. Thank you for joining DocuSign's Fourth Quarter and Full -- Fiscal Year 2024 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 the call. [Operator Instructions] I will now pass the call over to Roger Martin, Vice President of Finance. Please go ahead.

Roger Martin

operator. you, Thank welcome Earnings and QX Fiscal and Good to XXXX Call. Year afternoon, DocuSign's Martin, of I'm Vice DocuSign's Roger President Finance.

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

on of these related Any to known pace statements and are the best We Before update and on today's In uncertainties statements be cause our we reasonable, to subject our we of forward-looking and may obligation believe change. Please assumptions are new statements read particular, and some are events our of or that our subject begin, customer forward-looking product different. let that me of results assume no to at factors and performance they together but consider expectations are or are by our time assumptions remind SEC, filings as with future call. required forward-looking. to this in and except information. expectations unknown in law, these light based affecting on everyone materially the risks our factors risk actual date, statements regarding call innovation our content expectations the demand this to and with and are therefore estimates based the to

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

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

on figures, Allan? to turn financial now non-GAAP found refer comparable the which please website reconciliation call our to these of GAAP over at Allan. measures the regarding can like directly earnings be today's to and our release, investor.docusign.com. I'd a quantitative press information most For information,

Allan Thygesen

and strong vision: Roger, of operating X efficiency. operating good results reflect the our Thanks, fourth product initiatives omnichannel our strategic reach strengthening effectiveness DocuSign's and accelerating improving the quarter across of progress financial and innovation, afternoon, go-to-market everyone. pillars and

QX Before highlight million, year discussing year-over-year. billion, expectations. year-over-year, up $XXX business X% up revenue results. the I'll Both full was outperformed while was QX's revenue strong briefly $X.X pillars, XX% our

to significantly on focus in QX more continued non-GAAP still fiscal operating by Our XX%, while XX% margin 'XX. while non-GAAP year points improved X for improved year, rose operating drove from investing point versus growth margin long-term XX% efficiency up last to full X than profitability.

to than continue doubled From In by small, addition, value business. proposition. in customer across QX, cash free usage improving organizations, large the solid with existing customers encouraged to and $XXX nearly to flow to new strong more retention momentum and DocuSign's growth, in 'XX we're fiscal million. Similar invest

energy, Let's multimillion-dollar renewing our direct performance business pillars, QX, industrials, In with we government improvement including global the turn force. and state were improving consumer with by strategic omnichannel DocuSign, XXX of continued the increased in initiatives. customers insurance amount by customers to Fortune federal managed and leaders multiyear, from starting several goods, and signing with contracts agencies. substantially go-to-market in We encouraged sales our

Our momentum. partner driving been customer has in channel large instrumental

help end, in transformation we reach helping ecosystem DocuSign's extend channel. who purchase Azure's million These partner represent first existing have draw launched from We're with and relationships more are We can Microsoft's Azure segments. To our customer continue our that progress organizations our us of Microsoft in participation including Marketplace. accelerate These also customers' to can new building $X markets to to journeys. deepen strategic, We to and their vibrant suite They commitments recently digital many a global transformation organizations, SAP, digital already Microsoft Deloitte. customer encouraged accelerate enterprise-focused journeys. into customers' co-sell to now products our licenses. that customers DocuSign entire to partners on and enterprise

scale. acquisition our 'XX, fiscal self-serve our In sustained customers invested and improve we We even channels. digital also we and continue efficient to growth deliver to motions, customer growth. X.X total leading to as new In more surpassed million direct we customer QX, digital across

revenue QX, be total Our direct agricultural year. its growth is our landscape integration. in underlying is in WhatsApp business, opportunity as revenue e-mail our a credit from remains breadth, response from to revenue farmers with last and international limited drivers. Cresol, the than driver. The broader hours. DocuSign reduced a the Brazil, that and and which growth recently WhatsApp adopted continues unique to delays, of scale SaaS DocuSign. Across partner new Much in Adding to the financial represents allows continued speaks XX% existing reach. and accelerate and cooperative has and days with international channels, broaden to than The opportunity increased customer of the credit fast digital, signing industry usage WhatsApp Cresol more of is grew its connectivity. large of affinity long-term is front process business as In and up gap integration helped substantial generate bridge XX% Cresol's and Cresol eSignature rural connectivity key and twice international now more the to more strong one times

product have and our accounts turn new of launched is Europe in verification Wallet. usage prelaunch aspects Monitor and wins Identity of innovation. AI-enabled and Over now envelope and recent The DocuSign created benefit Premier recent quarter. customer this X,XXX recently significant in I X,XXX premium led investment from Across mentioned WhatsApp to identity to go-to-market, just Latin America. stronger U.K. QES-compliant used products like Let's all customer adoption. integration product customers our IDV just driving The

financial Bank, workflows offerings. and using for home to ID line is for equity consumer Financial of creates security verification bank a staff manual experience. removes speed lending customer This First the a of underwriters Indiana, company increase in headquartered services and credit improved stronger

like ID openings. expanding account cases Verification use credit First other online and cards Financial to is

customers. CLM a today. We're New and a those Looking a a CLM see agreement its complex to for We'll Quadrant vendors contract for third DocuSign product customers into management we DocuSign customers. on industry is precursor a QX, be running. To users Momentum reaches value year year's CLM worldwide us as York more will we ahead, about among revenue. we QX, to XX manage workflows, adoption to the platform customers case. set growth In automate share, exited that million can see CLM eSignature April who XX. Product life in future and virtually much the Today, hear solution. assessment. 'XX, to named than line again In users momentum creating create like the and of use clearly our Also, seeing broader this its our is continue our customers. to capabilities by strong several Gartner This cycle for more in IDC, sign versus DocuSign Magic to front of management annual as leader in as hundred X.X the demand was services enterprise leader taking other new have once significantly in overall excited all a we're fiscal validated named transform value momentum positive fourth as DocuSign parties that CLM at the platform in broader helps DocuSign CLM conference of customer across embracing is evolving outpaced powerful product we at us DocuSign end, have we beta join you that have

A CLM. company used streamlined global automaker accelerated CLM a value our a proposition. DocuSign sales implementation elegant luxury processes company-wide quarter, supply with match up a operations Just legal to and this its sped create to energy global its of sales chain multibillion-dollar manufacturer CLM. experience And and procurement its brand with an

rightsized management February, for on fiscal our strengthening reinvigorate We've while impact Our management. And we're further business fiscal your and foundation our with growth. In Even third will on preserved, systems: agreement strongest flat are share improving evolution critical to This documents, all impact initiatives, getting systems Today's efficiency stored on The financial leadership that and invested provide use world just In their but in changed but financial to years. the long-term investing agreements operations. a last product antiquated, paper-based remain will more its relics initiatives how file, the as announced a details focused In organization. force. 'XX profitability. our talent run efficiency. we foundation. DocuSign's in of document, long-term the These digital steps strengthening insights and critical to in growth. from the continue strategic sign transform in innovation, journey XXXX, including multiyear and disconnected front XXX to we Blake to decision agreements, focusing runs pillar reaccelerated reduction was that streamlined opportunity on operating agreement the remains haven't started. is we investments the and massive. realize processes a cost on DocuSign's DocuSign conclusion, of

agreements sole is enterprises existing and for valuable Our make our transforming more focus to alike. X.X those customers for million SMBs systems

world, turn DocuSign trusted to world's As organizations customers transition to a the most agreement digital as company.

on dedication to our me 'XX We Thank will passion it you we incredible let our turn Blake. and are the culture. With fiscal customers. to continued our over and for for excited to have impact team and your that, vision

Blake Grayson

accelerating we the solid continued X of good initiatives and a fiscal strategic Allan, vision: efficiency. our strengthening Thanks, pillars on financial product innovation, operating and enhancing Throughout XXXX, our our afternoon, go-to-market omnichannel and everyone. to foundation build

million, versus accelerating of across grew strong operating and in and QX in are growth The cash a $XXX business. in of over Billings strong will half have been remaining stabilization exceeded in QX, from of in growth, that represented also approximately QX results, highest in QX signs guidance which better early QX year-over-year the X% operating new grew billings continuing increased business especially billings, year-over-year material billed acceleration X% million with and million. a X-point around revenue XX% the financial spillovers contracts the year-over-year quarter every high renewal to operating margin came year. With we X% respect our to includes 'XX. the prior As QX's $XXX results. This of renewals, close to customers. year-over-year, fiscal year-over-year and delivered revenue support metric, strength from with half by performance and encouraged to QX. end $XXX from solid from a in large free the subscription execution future came would performance to otherwise improvements year in we from QX flow. Total quarters. Similar net income, result, financial

direct First, sent services total customers, health and our year-over-year. Total care with increased Similar with improving continues last slightly quarter, technology, year-over-year. the than key improve. measure, year-over-year services, growing in we utilization all usage Envelopes moderately financial baseline. saw increased contract verticals customer trends to business usage to Also, insurance, business consumption faster

Second, retention stable momentum. positive with year-over-year across the customer customer is in of retention direct large QX Gross was business. book flat

retention to in fiscal versus to 'XX, net of trended fiscal slowed We QX pace QX be moderating encouraged we 'XX. dollar to year dollar we're to 'XX. year the expected, slightly in continue and down XX%, that substantially in net As retention trend the 'XX year-over-year expect anticipate in downward decline year and flat fiscal

XX% software While The by customers we and over customer in X,XXX impacted in contract overall net than behavior. large QX, QX costing million $X bookings number new spending value ], year-over-year. [ customers second over customer encouraged quarter a the to $XXX,XXX total expansion by macro-related sequentially Also, increased are purchasing continues be by to for of spending optimization with rose more for annually row. increasing

offerings customer is revenue in grew across in customers, QX, a an and XXX,XXX. International growth up leverage scale total XX% Also, and DocuSign we QX. in overall base breadth with growth strong the we more key We our total growth revenue. the expand partly acquisition driver, with due XX% can year landscape is to direct consistent of volume to opportunity year-over-year customers customers now QX, initiatives. XX% revenue, X.X at the the over double the in improvement remains of and with unique remained software long-term the year-over-year, large. and consistent also believe go-to-market million Direct new as Third, ended product grew than international future. growth asset customer rate our bringing

more drove initiatives execution Turning fiscal efficiency operating doubling and 'XX. non-GAAP line gross free year year a in to than expansion in was margin XX.X%, performance significant Improved flow was with cash to our of quarter margin the financial in financials. versus Operating and led with prior subscription prior 'XX. Non-GAAP fourth line XX%, Fourth fiscal the quarter in the margin for year. gross strong year. also

margin. saw $XXX slightly operating of We XXX points from was basis income operating $XXX with full a million, record year, basis more up million, is up significant XX%, resulting was versus year points a gross 'XX. fiscal year-over-year, substantial in last fiscal of improving up margin For the year an year-over-year. year. QX operating income non-GAAP non-GAAP XX% in non-GAAP with 'XX, a XX% XXX margin in over XX% a improvement This XX%, operating XX% of over increase year-over-year

We drove operating cash free our margin. sustainable margin efficiency fiscal fiscal for with even doubling to opportunities than long-term efficiency both improvement free generated to million on substantial achieve In flow, stronger we drive $XXX as in a profit 'XX. year continue that to yield 'XX. focus QX flow free cash operating led year-over-year, to million. we cash capital flow Greater flow cash free more above was invest in will XX% realizing year, flow $XXX in periods and growth. Free cash QX, And a improvement was the full resulting greater working for year

Going forward, shares. stock. more flow anticipate a year we used approximate cash repurchasing $XXX cash portion We towards free non-GAAP margin. In free closely million we to purchase fiscal DocuSign to used margin flow common 'XX, of operating

'XX Fiscal $X.XX of net per share, year last $X.XX first year Non-GAAP year positive $X.XX, improvement to of last DocuSign's our used year. full also dilutive year. $X.XX reducing was pay equity programs. Non-GAAP diluted improvement diluted on represented an for share from from producing we $X.XX million $XXX for RSU addition, was due per settlements, In 'XX income. EPS EPS per impact GAAP fiscal a share $X.XX taxes the QX

year, the versus $X.XX For prior was $X.XX GAAP diluted year. in negative full EPS the

SBC ongoing X,XXX employees, efficiently X% year. expect year-over-year currently announced force investing business in equity from 'XX expect we dilution in X,XXX our be year-over-year and to This profitability the continued the year in reflect compensation revenue decrease share forward, decline with net year-over-year. We and X approximately per focus the programs. of fiscal percentage February 'XX. ended the improvements stock-based results a Going in we expect a this of to our on work cost GAAP year QX income flat manage end to and from as at of fiscal not of does We as on and reduction

G&A. With align balance efficiencies We will and to with the continue to long-term of scale partner organization and sales optimize to motions, our hiring GTM opportunities our plans realize support our R&D growth digital in regard in sheet.

and $XXX outstanding settle fiscal have cash, approximately remaining had currently in convertible no sheet. At used million to turn debt. we including quarter, the business investment cash future to to equivalents This foundation, debt the balance We approximately me end cash During $X.X significant strong to of our investments. that, we on cash our the of opportunistically billion that excess increases year and shareholders. With ability 'XX, a generates let flow, supports return capital model its guidance. financial free

million the we to For increase of a $XXX expect QX million QX fiscal 'XX and at 'XX, or year-over-year X% year total midpoint. $XXX in revenue

$X.XXX subscription between a of midpoint year-over-year year-over-year an or the midpoint. billion X% and in revenue to Of X% fiscal billion expect increase $XXX at to $X.XXX million expect this, for 'XX, $X.XXX we midpoint. million year or to X% at QX revenue increase the we the fiscal billion at $X.XXX increase or year-over-year 'XX a $XXX For billion

we billion For in 'XX. $XXX billion $X.XXX million $X.XXX for QX expect and million fiscal to $XXX billings, to

billings can timing scale by of years, This and period create and in amplified quarters our business. the shown are comparisons period. the of continually from customer impacts of to by further renewals, book As is year-over-year which recent heavily variability impacted meaningful

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

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

guidance base. approximately employees impact margin operating restructuring the XXX our of of around from recently non-GAAP announced the or Our X% includes employee

year the While restructuring in savings we intend the line 'XX. fiscal into small expansion margin bottom savings our majority the operating to to the reinvest in a as R&D, business, of portion in will of expected primarily drop vast reflected

We drive believe we while in will improving still are long-term efficiency growth. committed areas investing the to

pleased weighted accelerating million closing, million both of report non-GAAP and of our expect pillars: efficiency. product X for particularly strategic cash go-to-market diluted to another 'XX. In we're average shares We billings fully XXX to was QX innovation, progress our record fiscal margins outstanding XXX against enhancing and growth, execution team operational growth operating strong double-digit flow strengthening QX generation. customer delivered free our with improving as initiatives accelerating and financial the quarter and

team continue execution While management. be on customers we around still as to agreement for work top ahead its have proud of default growth, this we partner trusted I'm our to the focus reaccelerate line for

mitigate wide-scale customers, small- way. That from economy. to open accelerate us the in the to ahead of We scale enable progress remarks. growth, risk by to sharing gives and excited world call concludes the questions. have experiences. us X.X that opportunity business the ranging let's I'm the That With the prepared and businesses largest up adoption opportunity and global about look customers customer their million enterprises our the forward over medium-sized operator, that, power help for delightful the along our

Operator

[Operator Instructions] of line with Our from first Citi. the Tyler question Radke comes

Tyler Radke

kick for Blake, off. to couple things A just

So appreciate X the outperformance. versus the the on impressive. guide of billings was point Blake, Obviously, I kind comments QX beat the pretty unpacking

year the pieces to relative you on guide frame QX. the QX about need full billings bit As think to faster grow on that, than help the to guiding little year I on would I billings? guide a imply just the could full you're you think moving in

secondly, XX%. think about to below should of that's forward. And at some dipped I think NRR related XXX% if the how curious then that we So pull trends?

all trajectory of So us the business new guide. that just just between and and help as into the the drivers next for think that how expansions fits about understand you year,

Blake Grayson

thanks And Sure. the for question.

it on QX in about helpful the XXXX, a cover address think to the with you kind because comps. then think going the and so play question role starting I totality, billings, timing does to into of big as it's So year-over-year

really and quarter We with from that and execution that's net renewals execution happy seen that's renewals timing, And QX. from in team, QX, okay the close from long, the was was contribution the from acceleration to you like from super QX. we're strong of the acceleration remarks, early prepared by all we've renewals book the like recap about to that. So half year year includes highest heard new any just of then the for great half growth. because great have that quickly, pleased QX, 'XX. In renewals our And that just early other had a and fiscal

And job so nice the again that by there. was team a

that component timing Now impacts 'XX. fiscal

So with hard X respect address first to of applies to -- -- with and QX, this comps there's got QX, year. to also we've this in deal this half

job improve if go recall, at with really that I first just when billings came to or in strong plans sales you QX last our the mentioned year is did of to first did, it, first there, of that XXXX. look the we spillover half to That half performance And a good component some really about less you and incentive The QX. in comp hard other is, our because some renewals execution we back then the on-time adjustments and we into that leads and we made XXXX. had

year X the obviously, those comps full so as And well. hard to apply,

to for you've a So of got that kind normalize bit.

little but QX. from that think than about those got guide midpoint this year-over-year that with the the decel timing really the pretty year. fiscal 'XX And second year give bit that the renewals basis, comps about billings just is in and see QX the higher that the And see hard with guide magnitude first noisy. year, comps your as again, of this quarters. Overall, QX we almost the pleased to the you direction the of I'm to I makes And too, half and guide. a expect quarterly just then But $X billion at reacceleration. of to It's fiscal reaccelerate you then versus you into a use how so the on then mentioned you the we're some these half regards a exactly 'XX to full midpoint. dealing with -- of bit

then way to normalize might try for billings stack kind one so for with dollar to And -- we to your year. And did you on some expectations view, to full down question, QX and components, companies it think But of to about environment for us investments, smaller where QX. how think that helps is out the or still about line I There's of relative like into those are scrutinizing to for net tough a trend normalize about to kind X-year and period-over-period we leads then just macro as hope just you normalize effects. how retention of those think in a that opportunities. there expected, expansion our it

written of quite however, net flat the be from said, that in for of that to how down slowed encouraged 'XX. heard that part pandemic from you during share going It QX. And now in you've fiscal 'XX. now. further fiscal am to by related the even about to I is forecasting heard coming the the is of our fact Now these was book QX into minimis actually And And dollar really de substantially comps versus pace that retention fiscal decline 'XX. of decline the rate And expecting me prepared kind of quarters. we're that of business prior we're period remarks, slightly pace we're talk COVID of the out to is slow

we're one excited releasing signs got, And can hopefully, later the a also impact the long where to flattening our number new these think product rates And about for things ability bit again, then so general launches into there's renewal of the us around year. that. in consumption. availability over term, a And we've that's out. this I encouraging see And and you of

Operator

William of the from question next Our Jake line Blair. with Roberge comes

Jacob Roberge

quarter. contracts answer? And by your the remark. metric Blake, like on quarterly business the think that then, those those customer to new adds initiatives Can you much like the called and some results. you Allan, to it could is that feel in you era of that of follow-up Or on way how just COVID product-led new looks in great NRR reaccelerated Congrats the downtick last hold? a driven ramp help you out was actually just understand growth this remaining macro as forward? take continue adds the right that moving Do us XX,XXX actually about normalizes the

Blake Grayson

take from just the Allan, other at and stab and take I'll a COVID. the But DNR one. follow-up not of out the DNR granularity we're breaking in level then detail

an output quarters. But I where expansion in seeing of think it's prior just obvious we signs have some those we in pretty business. said, stabilization are the strong that

I stabilizing process all so don't that walk away it's things definitely COVID. I not kind And But means But improve of over it's and perspective. And then these that to with -- curve would thought we flatten say continue signs are have [indiscernible] that business. can we hopefully to we're seeing our think and that one mechanisms to it we have to anybody that on going it's related want or of I time. think we Allan, out to work where accounts? pursue,

Allan Thygesen

I basis. On internationally, customer is we question to acquisition customer a there directly any a make I the and the that number don't and on statements still benefiting think But It have in about is would track course, forward-looking acquisitions know measure always not customers, and Yes, new we prepared quarterly that. related we'll have fair on from just ourselves particularly funnel. space, say more. getting our we're second that we like of share, that But of although, I'm acquiring white exact healthy even acquisition. -- to I

Operator

next comes the Our Baer Morgan Josh from of question line Stanley. with

Josh Baer

Allan, over and question you. profitability. shift to margins to want for I a

investment And Blake, continued as efficiency, just about to a we think the bit top. translate even the FY beyond? XXXX talk in could about change you If that 'XX just commitment from and the wondering margin improving expansion around after little comments philosophy does to

Allan Thygesen

Yes.

long-term that expense So able today look, we medium investment for growth front first, in execution and operational being on the to we invest solid and think philosophy, to we with our of want balance to us. overall efficiency have

so the balancing And we're all time. that

more a Blake at had launch February, taking and just impair and new little little the leaner and our still that at a ready we get as beginning to of we As we referred looked products the action ability felt to we to not so grow on. room be

balance that's taking. the that we're So

We for not will keep headcount. about all it's obviously looking opportunities, and

organization results the tremendous many produced QX, improvements. strong on you throughout the saw that fronts. We what year That's have the the gotten really, and operating of efficiency in flow out cash

we'll those And seeing But then rightsized opportunities, that So feel cautious right plan for start keep we invest, on but we're will informed we opportunities. further we do we looking for investment if now. our a and basis.

Blake Grayson

the mean proud sales And marketing want was we've 'XX, the But process and I expense point this improved fiscal of just really an really gains. of to this it our those team the kind that address of year margins low proud XX% year. through. just and a 'XX, the out on of follow-up of to it's our on important, to in in year, your expect XXs. I'm In XX%. easy just team just revenue. the I I'm And that's question then specifically, future. I next focus to for in not to efficiencies that be fiscal gained this go

I Can I what our faster growth. opportunities we things no talk future, but to line do operating team long provide on we're time even think base? -- our that's term, time margins for grow revenue focusing on us we and partly or have with pretty be scaling is self-service as we motions in than building -- future, a and is And like here. PLG to around a you about further do I'm And the long one hear expense without those drive the talking things is anything opportunities the it, us hard the the that. opportunity over line here to now leverage future get and think motions we're about into able that. term that the of better let's And what specific

Allan Thygesen

that This more Blake bit it point we was felt just focused in opportunities a company, sales still just but time marketing February marketing reflecting and Maybe had the sure was to efficiency, the we in reduction marketing, we great. sales wanted the that captured That's as make around, throughout force and sales to XX% we overweighted that balanced last made Yes. about little our a the had those. we in area. reminder, efficiency

if at leverage to there make launch -- be new think then obviously, R&D will it as invest there, we and we But extent we the incremental I this products not first. hesitate seeing we'll to in investments, some well. point, as start probably that

to wanted first. Just see that

Operator

comes the line of next Brent Thill Our with Jefferies. question from

Luv Sodha

Luv Sodha verticals like more ask planning and talk that to really Thill. drove share sort little about how use macro tease this out the if on Could cash Brent free for quarter This sounds you're flow a Blake, just flow, that free of tease improvement that because Wanted how better of you bit normalizing. like more guess specifically of I it Allan, then it like -- versus you improvement which saw? And to this was cash quarter. just much strong execution most was could first repurchases. sounds for you to out is the maybe just

Allan Thygesen

Yes.

really see did first. the go We across strength board. I'll So

doesn't on So see did a we an so everywhere. side, call customers services we the an all strength opportunity new grew Blake that, agreements we significant rely that recovery on From hardly industry but manufacturing, energy doesn't broad-based both some on. as internationally, progress yes, highlighted And across I a there health the therefore, highlighted on side in industries. the and the side. to grow and had perspective, mortgages, sell we in did we segments, in deals for with faster represent us. but industry financial well, geography that SMB in and enterprise There's during

So looking there. At isn't there much projecting would marginally not macro really say an from than We're more my anything I ahead. standpoint. overall improved sentiment, that

plan we current breadth breadth segments bit just conditions. we're was verticals, the As given little always, of index help of I but think a on almost we countries and there macro of have. an our the our that But across base business,

Blake Grayson

-- the This about we flow. spot. options business. year around at rate the have No generates and dividends, year. question of some are for you are on active used we then we and you ended obviously, we're operating would a can also now it. with second opportunities to excess -- results we're what feel return that us. our capital obviously us. billion. develops we or with think things the the we debt. There's opportunistically can that likely business the free in say out talked increase cash follow a balance that weighed or quarter deployed And looking we road. I of We to the we of free to considerable how flow see that we to now some for over have that And and invest it opportunistically this with you We utilize cash the to than of buybacks, sheet. committed and $X.X M&A investments and kind that in still we'll the And amount then just but ], about shareholders stock We're of -- available the ability it's business last more while [ that efficiency great for how -- year the opportunities And down cash there's used debt up retire capital like improvements in shareholders, which also, we on investing about, like increasing foundational return to for, stabilizing

Operator

Capital line with Rishi the of from comes RBC Markets. question next Jaluria Our

Christopher Fountain

And This you cohort some is push the capabilities Is kind first $XXX,XXX you also, the for customer ask that that ACV is cohort. Or Jaluria. over saw just wanted Chris you customers then to a to the in volume I mentioned trends? Fountain like in if priorities wondering CLM better strength bit quarter. was I large and consumption on for about year. that R&D the could more coming starting to of dig investment little Rishi

Allan Thygesen

and How take R&D. one the first about you take I'll the

Blake Grayson

enterprise saw enterprise improve definitely customers, quarter-over-quarter. a that the any But of rate room had, say still say So say QX to we customer in enterprise rates that room admittedly. but large more to segment QX there will renewal other than space that our sequentially improvement improved kind yes, again, to I improve. renewal would I'll still sequentially growing $XXX,XXX in I perspective, has accounts from the

provide And so those mostly and to solutions additional we're products excited opportunities Then to give about Allan... us right, and that the opportunities in I'll customers. R&D, let

Allan Thygesen

Yes.

the course reimagine of the there's ahead significant I'd we exemplified about suite effort opportunity there, signature investment most there. have was map On to a and there solutions at for us month, of R&D a by front, product. release a the and in felt road we an of long year. because our And companies large say solutions will that feel obviously, stages had creation investment value that we've journey the during various for past, the journey agreement a of In And fiscal small. in continue will last of we've broader that we multiyear been --

area. is that the So biggest investment

to getting from cloud, effort of to meaningful things a a X are highlight. Microsoft area is investment our In addition underway, we significant infrastructure one well public and other as the I'd an the that, amount platforms that's are that's perspective. moving it's Those Azure,

Operator

Our next Bank America. of Brad line the from question of with comes Sills

Adam Bergere

This what what are still like so is making the terms start, And are I in missions? have initiatives growth or like you do product-led for of made what I'd Bergere to to Adam far self-serve you of changes guess want you And on the there? some Brad. make? changes

Allan Thygesen

Yes.

one. that take me Let

seamless. on there. year from DocuSign just that on a think our products much And we buying the website effort improvements here, making fiscal process I substantial made we lot of more of the directly in our during of the and was So course finished DocuSign our

to use flows of be solutions greatest launching will that think, and possible, for other meaningful there better better And we'll where notably will direct this to to partners allow put the the you et and with have, extent a is that's channels. do of us. how easily focus self-serve supporting So be the much on beyond customers also our upgrade business opportunities investing want easy our we're year. And throughout in. core year, expand ability Most to and the another solutions, offer cetera. I'd to payment to to the to improvement we those products we channel, I of for it products significant newer sales area variety that capabilities say some there -- to eSignature added

every So our pillar effort, I growth, as go-to-market think, of this seen our impact the it this is across has already in fruit, really digital will and sales business, year. across you've borne

about that. So excited very

Operator

line JMP. with Our Walravens of Patrick the comes Citizens next question from

Austin Cole

on for This is Cole Austin Pat.

seemed just there quarter, an you kind like how of CLM mentioned strong you're Is talk -- you that CLM, in you and there opportunity and tone broadly was it last guys enterprise can in seeing about of kind adoption in improvement interest uptick customers. an there? Or So of now among just are incremental situated? the CLM

Allan Thygesen

Yes. Yes.

executing I is overall the market think do I CLM in the think CLM market. improving. So And do we're better

definitely think I overall, managing a more and think the that them of priority better rising realizing opportunity. and are in list. agreements more It's So more is very out CLM I companies getting value your strategic

an is others, increasingly and ours solution. CLM, so interesting And and strategic

RFPs so more So we're and seeing on.

Gartner think our very the position position measures strong a other survey in terms market. as the our In in illustrated and of I we're of position, in competitive

very smaller -- might are appropriate. are think there going we where as number both should -- we experience. who to well and solutions it, audience, we by not more -- are our broader say, a there's for be companies think largest that we the And to, well way are the have rated to of accounts opportunity customers I within CLM their as companies adopt to popularize current

opportunity do very summarize a to say it's both for yes, some that positive I and on fronts, would strategic us. -- improvement. So And

Blake Grayson

to to on what and just And Yes. a add follow-up maybe Allan said.

CLM from QX. on product. accelerated for than our of and acceleration remarks, Obviously, the QX -- business, You still faster business total a basis a year-over-year that also to smaller encouraged grew heard but still share from it's in our by prepared that

Operator

comes question from Needham. the Scott line next Our with of Berg

Robert Morelli

[indiscernible] This is basis margins points. on Morelli for with operating margin XXX Scott. here non-GAAP Rob expanding

G&A Two actually as However, revenue. of questions percentage here. was up a

were second, And you why think drive about in do to XXXX how the leverage year? [indiscernible]? then not in this throughout able First, here spend we

Blake Grayson

Sure.

stab that. a take at me Let

year-on-year. of non-GAAP split expense, a G&A kind to G&A up bit One dollar unique look yes, SEC of when of up you effect. -- contributing ] XX% There's used mean a immaterial [ was bucket, an at that. small it that relatively I So we items amounts, X kind is are has

last prior year. this overall. amount cost bit then that to of doing litigation versus dollar dollars, us a kind immaterial So higher not little million but couple year. it's We're of we in now, used the allocate for a also out year an And

low If grown have X, I'll you call, what exclude the year-over-year. those would single G&A in unique digits items,

do year-on-year in of the we've I expect that and few what and but say sales not revenue, over months past improvements efficiencies would as the is and declines So G&A see well. expect from efforts some percentage to taken marketing only recently, also as a I expense I

we're business I to this next think I see that efficiencies where needed, focused to year. So drive across expect and

Operator

Iwanyc George with of line the from comes question next The Oppenheimer.

George Iwanyc

international there? color maybe digital seeing. being of little you maybe on the seeing give are much What you're from Allan, that breakdown. initiatives you on partner-led? the strength is And regional deeper could dig some your in How a bit us

Allan Thygesen

Yes.

our is direct by channel led Our more international today. growth

a opportunity very the immature is now I which we the on on partner substantial of have front side, where and think headroom. right I lot and there's digital relatively think

So so larger in expect. most opportunity from lots sales the outside XX principally but growth markets that today of coming is U.S. our direct countries, the of you top there, growth would efforts, focus the the

larger both of today, been little As know, a Canada, those. in France are and Germany. investing Australia, than But U.K., you we've Japan

So are all of markets those priorities.

Operator

Piper Sandler. from the with Rob comes Owens Our of line next question

Robbie Owens

policies? training. Just one privacy. the know media your you Kind of I And internal those just some how are stuff a in regarding your LLM are quick there what curious, LLMs? around were perspective, from training

Allan Thygesen

I story. any of without want for do training customers, one. very clear. any data specific customer be that models to contractual Yes, end AI Yes. I'll our consent We take of not from use

who are violate do people some probably think we So a move on trust are -- companies to high and And willing I sensitive have with aggressively trust. don't us They their cautiously we to with position moving anything here, trust but documents. who that. want customers. that responsibly There we're most to

that bring, more extract us solutions asking are using all can our we from about with our AI -- said, we AI what technology. very are can excited value We modern are and how more for customers

in is consent, we lot you'll is at I'd out that the issues or data anonymize then about assuming and so Momentum. there about But that us aggregate for extract no to agreements. confidential -- month trust the that to make is other data a any point you one point the opportunity more a And so give position. Maybe of hear starting anyone the

Operator

with line Our next Murphy the of from Mark JPMorgan. question comes

Mark Murphy

revenues ratios of between going and they bookings For type would or instance, have it implemented. And some any any you did Congrats QX was results? can if on about you on Blake, year. the last mentioned had ELAs. more enterprise and it and were there to any changes Wondering the shed of quarter, nice think impact Thinking and believe, the finish recognized new back of to forward? to a when comparison, introduction a from bit any there light to effect on licensing financial some made change structures, I changes those billings

Allan Thygesen

very But deals an done grow with interesting we becomes renewals very products, of I of and it enterprise Yes, the our obviously, business. of it basis. We our some license broader will products. And that, a have still remains the continue -- as and to match think clients. largest across very even small some an you remain can few of largest as some also we Yes. a like contract mix offer of more on part Envelope a customers, set

Blake Grayson

QX. think again, It's number I grows. of top super very, to just impact cases it's very a these directly one broad us we're results very And specific for your about to while grow. -- also customer it's in we and on to huge it's those, Yes. opportunity It this today. no the base. And things, not add have consider in continuing a that, -- of But question, to excited and think, material on for diverse I answer our business,

us is And customers there's don't say, -- which, like think single other I for there we impact would vastly us. companies, a strength that, have might so I be at

QX. to directly material just And so impact question, your no to answer -- but anyways,

Allan Thygesen

Yes. other of being ELA I connotation sort and consumption a of very would able one to specific unlimited products across. make has combine point.

make large large leaned in And are very sure that very we in to large some significantly enterprise nice competitive harder with and renewals some we We have deals. did customers.

improved as I of motion. result part, think in that, a

people So it. we have senior on

We desk. large have deal our

We have that expect possible. as competitive all the we things as that are you would make to sure

Operator

of Michael Turrin Our next with the question line Fargo from comes Wells Securities.

Michael Berg

This is I to flow. Michael Turrin. cash Michael Berg free on wanted touch on for just

strong think flow very drove discussed had relationship and just quarter free the between forward? shed flow And can some You a on margin free on the about quarter? renewal moving on generating cash terms you some operating light and how -- you the what cash billings timing year. Was of Maybe that? could it of we your in

Blake Grayson

Sure.

about you capital ago, do implementation our we free we had free it's yes, have so very our is a operating working the recall it's if a X year fiscal flow margin just and materially XX% to by for higher as had, that year And that driven ERP components. is collections. a One cash regards reason had some frankly, cash really We an in why tailwind than a did quarter and yield to flow. 'XX. a we ability And caused strong delay

our a agings. say, tailwind earlier So reduced I well, from that. But extremely would this improved got on of also process, year, collections that, top we've we've

showed And kind would say, efficiency that just I that really of, capital improvement. to working brought our operational so some

know, repeat going pretty working being top able you capital gain easily. we're year-over-year, continue just to each it's improve Now and able all to on something of to can to while efficiencies, be not to other get as usually you like forward, improvements going strive

free prepared yield cash remarks, the to that longer And would you'll margin. so I assume that's term more why expect closer operating to -- a flow in that find

Operator

Alex Zukin -- Our Research. from line next question comes comes our of Wolfe question with the final

Arsenije Matovic

on Congrats Zukin. Alex for results. on Arsenije is This

even you of Do think in XX% contributed With stay cohorts in expect drag the do this to 'XX. you strength be from 'XX, the if fiscal to think the early has seen 'XX? in in greater more growth this close year, fiscal fiscal I that same? international it 'XX? as you is through U.S. an this stays mix contribution to have total the Does growth domestically, Or roll to expansion contribution you leads growth top there the macro fiscal same, pandemic renewal to line strong revenue that

Blake Grayson

the really first Well, the for than Thanks off, our year, overall again, international much growing business. Yes. growth with the faster how has in happy progressed question.

digits All that. not less, to major Only whether out question we of accelerates sizable. or our be to regions is, provide will any reiterate, should international And much more the double came in say the of us, the just or in GDP what XX% to it revenue going you our think it But if of I think, I'm opportunity for higher about guidance to something QX. To from business. international is our as a than think QX I quite proxy, that. grew

faster think And say, longer-term to will any or but place so that other I opportunity, for market. accelerate not I'm oh, excited think slower any it than really I

Allan Thygesen

Yes.

you and DocuSign. for support to Okay. solid as continue for a all joining for we With thank foundation your build that,

for exciting and employees results We'll be what our look the add very a in and strong quarter. shareholders. QX of making XXXX. progress reinvigorate are fiscal see you We that and you. to Thank the proud value customers, of We to will forward we're innovation next our

Operator

This concludes today's teleconference.

for your lines your participation. Thank at time. disconnect this may You you

DocuSign (DOCU) 7 Mar 242024 Q4 Earnings call transcript