Docusign Announces Fourth Quarter and Fiscal Year 2025 Financial Results

, /PRNewswire/ -- Docusign, Inc. (NASDAQ: DOCU) today announced results for its fourth quarter and fiscal year ended January 31, 2025. Prepared remarks and the news release with the financial results will be accessible on Docusign's website at investor.docusign.com prior to its webcast. "Fiscal 2025 was a transformative year for Docusign. We launched Docusign IAM, our AI-powered agreement management platform, which is driving rapid traction with customers," said Allan Thygesen, CEO of Docusign. "In Q4, our business generated strong revenue growth and profitability. We're well positioned to pursue the significant opportunity ahead." Fourth Quarter Financial Highlights Total revenue was $776.3 million, a 9% year-over-year increase. Subscription revenue was $757.8 million, a 9% year-over-year increase. Professional services and other revenue was $18.5 million, an 11% year-over-year increase. Billings were $923.2 million, an 11% year-over-year increase. GAAP gross margin was 79.4% compared to 79.2% in the same period last year. Non-GAAP gross margin was 82.3% compared to 82.5% in the same period last year. GAAP net income per basic share was $0.41 on 203 million shares outstanding compared to $0.13 on 206 million shares outstanding in the same period last year. GAAP net income per diluted share was $0.39 on 215 million shares outstanding compared to $0.13 on 210 million shares outstanding in the same period last year. Non-GAAP net income per diluted share was $0.86 on 215 million shares outstanding compared to $0.76 on 210 million shares outstanding in the same period last year. Net cash provided by operating activities was $307.9 million compared to $270.7 million in the same period last year. Free cash flow was $279.6 million compared to $248.6 million in the same period last year. Cash, cash equivalents, restricted cash and investments were $1.1 billion at the end of the quarter. Repurchases of common stock were $161.7 million. Fiscal 2025 Financial Highlights Total revenue was $2.98 billion, an 8% year-over-year increase. Subscription revenue was $2.90 billion, an 8% year-over-year increase. Professional services and other revenue was $75.4 million, relatively flat when compared to the same period last year. Billings were $3.1 billion, a 7% year-over-year increase. GAAP gross margin was 79.1% compared to 79.3% in the prior year. Non-GAAP gross margin was 82.2% compared to 82.6% in the prior year. GAAP net income per basic share was $5.23 on 204 million shares outstanding compared to $0.36 on 204 million shares outstanding in fiscal 2024. GAAP net income per diluted share was $5.08 on 210 million shares outstanding compared to $0.36 on 209 million shares outstanding in fiscal 2024. Non-GAAP net income per diluted share was $3.55 on 210 million shares outstanding compared to $2.98 on 209 million shares outstanding in fiscal 2024. Repurchases of common stock were $683.5 million compared to $145.5 million in the same period last year. A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures and Other Key Metrics." Key Business Highlights: Global Expansion of Intelligent Agreement Management ("IAM") Platform: Docusign announced the global release of IAM for Sales and IAM Core in December 2024, excluding Japan. As part of the global expansion, Navigator became available to customers in every country where Docusign products are available for sale. Navigator has been localized in all 14 Docusign-supported languages. Navigator AI extractions are built to support agreements in English-language variants, French, and German only. In November 2024, IAM plans were made available for Enterprise customers specific to departmental use cases. Docusign for Developers: Launched in November of 2024, Docusign for Developers enables partners to build integrations on IAM through a suite of performant and secure application programming interfaces ("APIs") and software development kits ("SDKs"), create extension apps for IAM, and build automated workflows in Maestro. Additional IAM launches are categorized into the three steps of the agreement journey, including: Create: Docusign + Microsoft Power Automate: Docusign integration with Power Automate allows customers to automate workflows to synchronize agreements, get notifications, and generate personalized agreements. Advanced Web Forms - Document Exclusion Rules and Multi-Recipient Forms: Web Forms streamline data collection and accelerate agreement signing through interactive, mobile-friendly forms that enhance customer experiences. Users can now conditionally display the correct documents within a template based on data collected and support forms with multiple recipients. Commit: Identity Wallet for Liveness: Identity Wallet allows customers to easily and securely re-apply stored identity to every agreement. Users can quickly set up Identity Wallet to store their verified identity details while maintaining consistent security. Manage: Docusign Navigator Agreement Sets: For contract managers who oversee large volumes of agreements, Navigator agreement sets provide a transformative way for organizations to organize agreements into flexible sets. Party Management in Docusign Navigator: Party Management allows customers to gain a holistic view of their contracts to understand the state of the contractual relationship and obligations by reducing duplicate identification of customers. Contract Lifecycle Management ("CLM") Product Releases and Highlights: AI-Assisted Review for CLM: Docusign AI-Assisted Review for Docusign CLM accelerates contract review, enabling more team members to participate in negotiations without compromising compliance, freeing legal teams to focus on strategic work. This tool, available to U.S. CLM and CLM+ customers, uses generative AI to automate reviews, suggest compliant language, and quickly answer contract-related questions, streamlining the path to signature. Guidance The company currently expects the following guidance: Quarter ending April 30, 2025 (in millions, except percentages): Total revenue [1] $745 to $749 Subscription revenue $729 to $733 Billings [2] $741 to $751 Non-GAAP gross margin 80.5 % to 81.5 % Non-GAAP operating margin 27.0 % to 28.0 % Non-GAAP diluted weighted-average shares outstanding 210 to 215 Fiscal year ending January 31, 2026 (in millions, except percentages): Total revenue [1] $3,129 to $3,141 Subscription revenue $3,062 to $3,074 Billings [2] $3,300 to $3,354 Non-GAAP gross margin 80.5 % to 81.5 % Non-GAAP operating margin 27.8 % to 28.8 % Non-GAAP diluted weighted-average shares outstanding 210 to 215 [1] Excluding the impact of foreign currency exchange rates on year-over-year guided growth, revenue guidance range would be approximately 0.7% point higher for both the quarter ending April 30, 2025 and the fiscal year ending January 31, 2026. [2] Excluding the impact of foreign currency exchange rates on year-over-year guided growth, billings guidance range would be approximately 1.0% point higher for both the quarter ending April 30, 2025 and the fiscal year ending January 31, 2026. A reconciliation of non-GAAP guidance measures to corresponding GAAP guidance measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future. Stock-based compensation-related charges, including employer payroll tax-related items on employee stock transactions, are impacted by many factors, including the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to constant change. We have provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for our historical non-GAAP financial results included in this release. Webcast Conference Call Information The company will host a conference call on March 13, 2025 at 2:00 p.m. PT (5:00 p.m. ET) to discuss its financial results. A live webcast of the event will be available on the Docusign Investor Relations website at investor.docusign.com. Prepared remarks and the news release with the financial results will also be accessible on Docusign's website prior to the webcast. A live dial-in will be available domestically at 877-407-0784 or internationally at 201-689-8560. A replay will be available domestically at 844-512-2921 or internationally at 412-317-6671 until midnight (ET) March 27, 2025, using the passcode 13751751. About Docusign Docusign brings agreements to life. Nearly 1.7 million customers and more than a billion people in over 180 countries use Docusign solutions to accelerate the process of doing business and simplify people's lives. With intelligent agreement management, Docusign unleashes business critical data that is trapped inside of documents. Until now, these were disconnected from business systems of record, costing businesses time, money, and opportunity. Using Docusign's IAM platform, companies can create, commit, and manage agreements with solutions created by the #1 company in e-signature and CLM. Learn more at www.docusign.com. Copyright 2025. Docusign, Inc. is the owner of DOCUSIGN® and all its other marks (www.docusign.com/IP). Investor Relations:Docusign Investor Relations[email protected] Media Relations:Docusign Corporate Communications[email protected] Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management's beliefs and assumptions and on information currently available to management, and which statements involve substantial risk and uncertainties. All statements contained in this press release other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, objectives for future operations, and the impact of such assumptions on our financial condition and results of operations are forward-looking statements. Forward-looking statements in this press release also include, among other things, statements under "Guidance" above and any other statements about expected financial metrics, such as revenue, billings, non-GAAP gross margin, non-GAAP operating margin, non-GAAP diluted weighted-average shares outstanding, and non-financial metrics, as well as statements related to our expectations regarding the benefits, rollout and customer demand of the Docusign IAM platform. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this press release include, but are not limited to, statements about: our expectations regarding global macro-economic conditions, including the effects of inflation, volatile interest rates or foreign exchange rates, and market volatility on the global economy; our inability to accurately estimate our market opportunity; our ability to compete effectively in an evolving and competitive market; the impact of any interruptions or delays in performance of our technical infrastructure, or data breaches, cyberattacks or other fraudulent or malicious activity attempting to exploit our technology systems, platform or brand name; our ability to effectively sustain and manage our growth and future expenses and maintain or increase profitability; our ability to attract new customers and retain and expand our existing customer base, including our ability to attract large organizations as users; our ability to scale and update our platform to respond to customers' needs and rapid technological change, including our ability to successfully incorporate generative artificial intelligence into our existing and future products and to successfully deploy them; our ability to successfully develop, launch and sell Intelligent Agreement Management ("IAM") solutions; our ability to expand use cases within existing customers and vertical solutions; our ability to expand our operations and increase adoption of our platform internationally; our ability to strengthen and foster our relationships with developers; our ability to retain our direct sales force, customer success team and strategic partnerships around the world; our ability to identify targets for and execute potential acquisitions and to successfully integrate and realize the anticipated benefits of such acquisitions; our ability to maintain, protect and enhance our brand; the sufficiency of our cash, cash equivalents and capital resources to satisfy our liquidity needs; limitations on us due to obligations we have under our credit facility; our ability to realize the anticipated benefits of our stock repurchase program; our failure or the failure of our software to comply with applicable industry standards, laws and regulations; our ability to maintain, protect and enhance our intellectual property; our ability to successfully defend litigation against us; our ability to maintain our corporate culture; our ability to offer high-quality customer support; our ability to hire, retain and motivate qualified personnel, including executive level management; our ability to successfully manage and integrate executive management transitions; uncertainties regarding the impact of general economic and market conditions, including as a result of geopolitical conflict or changes in trade policy; and our ability to maintain proper and effective internal controls. Additional risks and uncertainties that could affect our financial results are included in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our annual report on Form 10-K for the fiscal year ended January 31, 2024, filed on March 21, 2024, quarterly report on Form 10-Q for the quarter ended October 31, 2024, filed on December 6, 2024 with the Securities and Exchange Commission (the "SEC"), and other filings that we make from time to time with the SEC. The forward-looking statements made in this press release relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this press release or to conform such statements to actual results or revised expectations, except as required by law. Non-GAAP Financial Measures and Other Key Metrics To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We present these non-GAAP measures to assist investors in seeing our financial performance using a management view, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, these non-GAAP measures are not intended to be considered in isolation from, a substitute for, or superior to our GAAP results. Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP net income per share: We define these non-GAAP financial measures as the respective GAAP measures, excluding expenses related to stock-based compensation, employer payroll tax on employee stock transactions, amortization of acquisition-related intangibles, amortization of debt discount and issuance costs, acquisition-related expenses, fair value adjustments to strategic investments, lease-related impairment and lease-related charges, restructuring and other related charges, as these costs are not reflective of ongoing operations and, as applicable, other special items. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies and over multiple periods. In addition to these exclusions, we subtract an assumed provision for income taxes to calculate non-GAAP net income. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For each of the years ended January 31, 2025 and 2024, we have determined the projected non-GAAP tax rate to be 20%. Free cash flow: We define free cash flow as net cash provided by operating activities less purchases of property and equipment. We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment, for operational expenses, investment in our business, and to make acquisitions. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth. Billings: We define billings as total revenues plus the change in our contract liabilities and refund liability less contract assets and unbilled accounts receivable in a given period. Billings reflects sales to new customers plus subscription renewals and additional sales to existing customers. Only amounts invoiced to a customer in a given period are included in billings. We believe billings can be used to measure our periodic performance, when taking into consideration the timing aspects of customer renewals, which represents a large component of our business. Given that most of our customers pay in annual installments one year in advance, but we typically recognize a majority of the related revenue ratably over time, we use billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see "Reconciliation of GAAP to Non-GAAP Financial Measures" below. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months EndedJanuary 31, Year EndedJanuary 31, (in thousands, except per share data) 2025 2024 2025 2024 Revenue: Subscription $ 757,767 $ 695,682 $ 2,901,309 $ 2,686,708 Professional services and other 18,485 16,704 75,430 75,174 Total revenue 776,252 712,386 2,976,739 2,761,882 Cost of revenue: Subscription 138,884 120,551 532,445 459,905 Professional services and other 21,327 27,356 89,214 112,716 Total cost of revenue 160,211 147,907 621,659 572,621 Gross profit 616,041 564,479 2,355,080 2,189,261 Operating expenses: Sales and marketing 301,288 300,221 1,160,993 1,168,137 Research and development 155,463 151,524 588,455 539,488 General and administrative 98,821 102,711 375,983 419,621 Restructuring and other related charges — 88 29,721 30,381 Total operating expenses 555,572 554,544 2,155,152 2,157,627 Income from operations 60,469 9,935 199,928 31,634 Interest expense (400) (1,709) (1,550) (6,844) Interest income and other income, net 7,818 21,516 49,563 68,889 Income before provision for (benefit from) income taxes 67,887 29,742 247,941 93,679 Provision for (benefit from) income taxes (15,604) 2,501 (819,944) 19,699 Net income $ 83,491 $ 27,241 $ 1,067,885 $ 73,980 Net income per share attributable to common stockholders: Basic $ 0.41 $ 0.13 $ 5.23 $ 0.36 Diluted $ 0.39 $ 0.13 $ 5.08 $ 0.36 Weighted-average shares used in computing net income per share: Basic 203,299 205,514 204,329 204,070 Diluted 214,507 209,581 210,339 208,950 Stock-based compensation expense included in costs and expenses: Cost of revenue—subscription $ 13,712 $ 13,517 $ 58,348 $ 51,660 Cost of revenue—professional services and other 4,174 6,977 18,639 28,336 Sales and marketing 48,213 53,251 202,609 203,855 Research and development 53,422 54,753 204,238 184,211 General and administrative 30,426 32,502 121,665 143,773 Restructuring and other related charges — 16 4,836 5,012 CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands) January 31,2025 January 31,2024 Assets Current assets Cash and cash equivalents $ 648,623 $ 797,060 Investments—current 314,924 248,402 Accounts receivable, net 429,582 439,299 Contract assets—current 13,764 15,922 Prepaid expenses and other current assets 82,368 66,984 Total current assets 1,489,261 1,567,667 Investments—noncurrent 134,105 121,977 Property and equipment, net 299,370 245,173 Operating lease right-of-use assets 109,630 123,188 Goodwill 454,477 353,138 Intangible assets, net 76,388 50,905 Deferred contract acquisition costs—noncurrent 467,201 409,627 Deferred tax assets—noncurrent 840,470 2,031 Other assets—noncurrent 141,803 97,584 Total assets $ 4,012,705 $ 2,971,290 Liabilities and Equity Current liabilities Accounts payable $ 30,697 $ 19,029 Accrued expenses and other current liabilities 99,579 104,037 Accrued compensation 227,115 195,266 Contract liabilities—current 1,455,442 1,320,059 Operating lease liabilities—current 19,077 22,230 Total current liabilities 1,831,910 1,660,621 Contract liabilities—noncurrent 21,523 21,980 Operating lease liabilities—noncurrent 105,350 120,823 Deferred tax liability—noncurrent 20,596 16,795 Other liabilities—noncurrent 30,634 21,332 Total liabilities 2,010,013 1,841,551 Stockholders' equity Common stock 20 21 Treasury stock (2,871) (2,164) Additional paid-in capital 3,321,242 2,821,461 Accumulated other comprehensive loss (28,376) (19,360) Accumulated deficit (1,287,323) (1,670,219) Total stockholders' equity 2,002,692 1,129,739 Total liabilities and equity $ 4,012,705 $ 2,971,290 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months EndedJanuary 31, Year EndedJanuary 31, (in thousands) 2025 2024 2025 2024 Cash flows from operating activities: Net income $ 83,491 $ 27,241 $ 1,067,885 $ 73,980 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 28,707 23,633 107,804 95,062 Amortization of deferred contract acquisition and fulfillment costs 64,486 52,382 237,217 200,163 Amortization of debt discount and transaction costs 139 1,027 554 4,749 Non-cash operating lease costs 4,602 4,811 19,065 21,310 Stock-based compensation expense 149,947 161,016 610,335 616,847 Deferred income taxes (22,103) (973) (839,989) 6,292 Other (361) (551) 6,111 (1,904) Changes in operating assets and liabilities Accounts receivable (128,616) (81,221) 2,075 71,681 Prepaid expenses and other current assets (9,334) 7,300 (17,634) (657) Deferred contract acquisition and fulfillment costs (87,618) (78,649) (302,166) (255,159) Other assets (5,884) (1,413) (22,002) (15,432) Accounts payable 9,152 4,263 7,638 (4,826) Accrued expenses and other liabilities 10,081 4,101 2,935 6,473 Accrued compensation 70,364 38,347 29,236 33,979 Contract liabilities 146,285 115,371 129,854 152,247 Operating lease liabilities (5,426) (5,987) (21,646) (25,279) Net cash provided by operating activities 307,912 270,698 1,017,272 979,526 Cash flows from investing activities: Cash paid for acquisition, net of acquired cash — — (143,611) — Purchases of marketable securities (77,699) (132,875) (411,236) (336,221) Maturities of marketable securities 74,500 222,352 340,334 473,869 Purchases of strategic and other investments (750) (125) (1,375) (645) Purchases of property and equipment (28,342) (22,114) (96,988) (92,391) Net cash provided by (used in) by investing activities (32,291) 67,238 (312,876) 44,612 Cash flows from financing activities: Repayments of convertible senior notes — (689,896) — (726,979) Repurchases of common stock (161,725) — (683,528) (145,515) Settlement of capped calls, net of related costs — — — 23,688 Payment of tax withholding obligation on net RSU settlement and ESPP purchase (81,148) (45,922) (213,282) (144,218) Proceeds from exercise of stock options 11,359 784 22,705 13,991 Proceeds from employee stock purchase plan — — 35,314 32,994 Net cash used in financing activities (231,514) (735,034) (838,791) (946,039) Effect of foreign exchange on cash, cash equivalents and restricted cash (5,311) 5,096 (7,550) 199 Net increase (decrease) in cash, cash equivalents and restricted cash 38,796 (392,002) (141,945) 78,298 Cash, cash equivalents and restricted cash at beginning of period (1) 620,758 1,193,501 801,499 723,201 Cash, cash equivalents and restricted cash at end of period (1) $ 659,554 $ 801,499 $ 659,554 $ 801,499 (1) Cash, cash equivalents and restricted cash included restricted cash of $10.9 million and $4.4 million as of January 31, 2025 and January 31, 2024. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) Reconciliation of gross profit (loss) and gross margin: Three Months EndedJanuary 31, Year Ended January 31, (in thousands) 2025 2024 2025 2024 GAAP gross profit $ 616,041 $ 564,479 $ 2,355,080 $ 2,189,261 Add: Stock-based compensation 17,886 20,494 76,987 79,996 Add: Amortization of acquisition-related intangibles 3,564 2,070 12,267 8,857 Add: Employer payroll tax on employee stock transactions 1,176 337 3,909 2,262 Add: Lease-related impairment and lease-related charges — — — 721 Non-GAAP gross profit $ 638,667 $ 587,380 $ 2,448,243 $ 2,281,097 GAAP gross margin 79.4 % 79.2 % 79.1 % 79.3 % Non-GAAP adjustments 2.9 % 3.3 % 3.1 % 3.3 % Non-GAAP gross margin 82.3 % 82.5 % 82.2 % 82.6 % GAAP subscription gross profit $ 618,883 $ 575,131 $ 2,368,864 $ 2,226,803 Add: Stock-based compensation 13,712 13,517 58,348 51,660 Add: Amortization of acquisition-related intangibles 3,564 2,070 12,267 8,857 Add: Employer payroll tax on employee stock transactions 921 232 2,882 1,464 Add: Lease-related impairment and lease-related charges — — — 505 Non-GAAP subscription gross profit $ 637,080 $ 590,950 $ 2,442,361 $ 2,289,289 GAAP subscription gross margin 81.7 % 82.7 % 81.6 % 82.9 % Non-GAAP adjustments 2.4 % 2.2 % 2.6 % 2.3 % Non-GAAP subscription gross margin 84.1 % 84.9 % 84.2 % 85.2 % GAAP professional services and other gross loss $ (2,842) $ (10,652) $ (13,784) $ (37,542) Add: Stock-based compensation 4,174 6,977 18,639 28,336 Add: Employer payroll tax on employee stock transactions 255 105 1,027 798 Add: Lease-related impairment and lease-related charges — — — 216 Non-GAAP professional services and other gross income (loss) $ 1,587 $ (3,570) $ 5,882 $ (8,192) GAAP professional services and other gross margin (15.4) % (63.8) % (18.3) % (49.9) % Non-GAAP adjustments 24.0 % 42.4 % 26.1 % 39.0 % Non-GAAP professional services and other gross margin 8.6 % (21.4) % 7.8 % (10.9) % Reconciliation of operating expenses: Three Months EndedJanuary 31, Year EndedJanuary 31, (in thousands) 2025 2024 2025 2024 GAAP sales and marketing $ 301,288 $ 300,221 $ 1,160,993 $ 1,168,137 Less: Stock-based compensation (48,213) (53,251) (202,609) (203,855) Less: Amortization of acquisition-related intangibles (3,354) (2,631) (12,450) (10,518) Less: Employer payroll tax on employee stock transactions (2,242) (1,104) (7,593) (5,049) Less: Lease-related impairment and lease-related charges — — — (2,171) Non-GAAP sales and marketing $ 247,479 $ 243,235 $ 938,341 $ 946,544 GAAP sales and marketing as a percentage of revenue 38.8 % 42.1 % 39.0 % 42.3 % Non-GAAP sales and marketing as a percentage of revenue 31.9 % 34.2 % 31.5 % 34.3 % GAAP research and development $ 155,463 $ 151,524 $ 588,455 $ 539,488 Less: Stock-based compensation (53,422) (54,753) (204,238) (184,211) Less: Employer payroll tax on employee stock transactions (1,421) (605) (7,013) (4,276) Less: Lease-related impairment and lease-related charges — — — (873) Non-GAAP research and development $ 100,620 $ 96,166 $ 377,204 $ 350,128 GAAP research and development as a percentage of revenue 20.0 % 21.3 % 19.8 % 19.5 % Non-GAAP research and development as a percentage of revenue 13.0 % 13.5 % 12.7 % 12.7 % GAAP general and administrative $ 98,821 $ 102,711 $ 375,983 $ 419,621 Less: Stock-based compensation (30,426) (32,502) (121,665) (143,773) Less: Employer payroll tax on employee stock transactions (1,504) (554) (3,278) (2,095) Less: Acquisition-related expenses — — (4,340) — Less: Lease-related impairment and lease-related charges — — — (695) Non-GAAP general and administrative $ 66,891 $ 69,655 $ 246,700 $ 273,058 GAAP general and administrative as a percentage of revenue 12.8 % 14.5 % 12.4 % 15.2 % Non-GAAP general and administrative as a percentage of revenue 8.6 % 9.8 % 8.2 % 9.8 % Reconciliation of income from operations and operating margin: Three Months EndedJanuary 31, Year EndedJanuary 31, (in thousands) 2025 2024 2025 2024 GAAP income from operations $ 60,469 $ 9,935 $ 199,928 $ 31,634 Add: Stock-based compensation 149,947 161,000 605,499 611,835 Add: Amortization of acquisition-related intangibles 6,918 4,701 24,717 19,375 Add: Employer payroll tax on employee stock transactions 6,343 2,600 21,793 13,682 Add: Acquisition-related expenses — — 4,340 — Add: Restructuring and other related charges — 88 29,721 30,381 Add: Lease-related impairment and lease-related charges — — — 4,460 Non-GAAP income from operations $ 223,677 $ 178,324 $ 885,998 $ 711,367 GAAP operating margin 7.8 % 1.4 % 6.7 % 1.1 % Non-GAAP adjustments 21.0 % 23.6 % 23.1 % 24.7 % Non-GAAP operating margin 28.8 % 25.0 % 29.8 % 25.8 % Reconciliation of net income and net income per share, basic and diluted: Three Months EndedJanuary 31, Year EndedJanuary 31, (in thousands, except per share data) 2025 2024 2025 2024 GAAP net income $ 83,491 $ 27,241 $ 1,067,885 $ 73,980 Add: Stock-based compensation 149,947 161,000 605,499 611,835 Add: Amortization of acquisition-related intangibles 6,918 4,701 24,717 19,375 Add: Employer payroll tax on employee stock transactions 6,343 2,600 21,793 13,682 Add: Acquisition-related expenses — — 4,340 — Add: Restructuring and other related charges — 88 29,721 30,381 Add: Amortization of debt discount and issuance costs — 1,027 — 5,175 Add: Fair value adjustments to strategic investments — (98) — 22 Add: Lease-related impairment and lease-related charges — — — 4,460 Add: Income tax and other tax adjustments (61,823) (37,311) (1,006,746) (136,023) Non-GAAP net income $ 184,876 $ 159,248 $ 747,209 $ 622,887 Numerator: Non-GAAP net income $ 184,876 $ 159,248 $ 747,209 $ 622,887 Add: Interest expense on convertible senior notes — — — 425 Non-GAAP net income attributable to common stockholders, diluted $ 184,876 $ 159,248 $ 747,209 $ 623,312 Denominator: Weighted-average common shares outstanding, basic 203,299 205,514 204,329 204,070 Effect of dilutive securities 11,208 4,067 6,010 4,880 Non-GAAP weighted-average common shares outstanding, diluted 214,507 209,581 210,339 208,950 GAAP net income per share, basic $ 0.41 $ 0.13 $ 5.23 $ 0.36 GAAP net income per share, diluted $ 0.39 $ 0.13 $ 5.08 $ 0.36 Non-GAAP net income per share, basic $ 0.91 $ 0.77 $ 3.66 $ 3.05 Non-GAAP net income per share, diluted $ 0.86 $ 0.76 $ 3.55 $ 2.98 Computation of free cash flow: Three Months EndedJanuary 31, Year EndedJanuary 31, (in thousands) 2025 2024 2025 2024 Net cash provided by operating activities $ 307,912 $ 270,698 $ 1,017,272 $ 979,526 Less: Purchases of property and equipment (28,342) (22,114) (96,988) (92,391) Non-GAAP free cash flow 279,570 248,584 920,284 887,135 Net cash provided by (used in) by investing activities (32,291) 67,238 (312,876) 44,612 Net cash used in financing activities $ (231,514) $ (735,034) $ (838,791) $ (946,039) Computation of billings: Three Months EndedJanuary 31, Year EndedJanuary 31, (in thousands) 2025 2024 2025 2024 Revenue $ 776,252 $ 712,386 $ 2,976,739 $ 2,761,882 Add: Contract liabilities and refund liability, end of period 1,479,266 1,343,792 1,479,266 1,343,792 Less: Contract liabilities and refund liability, beginning of period (1,332,828) (1,228,174) (1,343,792) (1,191,269) Add: Contract assets and unbilled accounts receivable, beginning of period 18,341 25,253 20,189 16,615 Less: Contract assets and unbilled accounts receivable, end of period (17,825) (20,189) (17,825) (20,189) Add: Contract assets and unbilled accounts receivable contributed by acquisitions — — 53 — Less: Contract liabilities and refund liability contributed by acquisitions — — (5,071) — Non-GAAP billings $ 923,206 $ 833,068 $ 3,109,559 $ 2,910,831 SOURCE Docusign, Inc. 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Docusign Announces Fourth Quarter and Fiscal Year 2025 Financial Results

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