Core Insights - DocuSign reported revenue of $776.25 million for the quarter ended January 2025, marking a year-over-year increase of 9% and exceeding the Zacks Consensus Estimate by 2.14% [1] - The company's EPS for the same period was $0.86, up from $0.76 a year ago, with an EPS surprise of 2.38% over the consensus estimate of $0.84 [1] Financial Performance Metrics - Non-GAAP billings reached $923.21 million, surpassing the average estimate of $875.20 million based on six analysts [4] - Total customers increased to 1.7 million, compared to the average estimate of 1.67 million based on two analysts [4] - Revenue from professional services and other was $18.49 million, exceeding the seven-analyst average estimate of $16.80 million, representing a year-over-year change of 10.7% [4] - Subscription revenue was $757.77 million, compared to the average estimate of $743.15 million based on seven analysts, reflecting an 8.9% year-over-year increase [4] - Non-GAAP subscription gross profit was $637.08 million, above the six-analyst average estimate of $620.78 million [4] - Non-GAAP professional services and other gross profit was $1.59 million, compared to the five-analyst average estimate of -$1.33 million [4] Stock Performance - Over the past month, DocuSign shares have returned -9.2%, while the Zacks S&P 500 composite experienced a -7.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1: Earnings Performance - DocuSign reported quarterly earnings of $0.86 per share, exceeding the Zacks Consensus Estimate of $0.84 per share, and up from $0.76 per share a year ago, representing an earnings surprise of 2.38% [1] - The company posted revenues of $776.25 million for the quarter ended January 2025, surpassing the Zacks Consensus Estimate by 2.14%, compared to year-ago revenues of $712.39 million [2] - Over the last four quarters, DocuSign has consistently surpassed consensus EPS and revenue estimates [2] Group 2: Stock Performance and Outlook - DocuSign shares have declined approximately 10.9% since the beginning of the year, while the S&P 500 has decreased by 4.8% [3] - The future performance of DocuSign's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.85 on revenues of $754.46 million, and for the current fiscal year, it is $3.66 on revenues of $3.14 billion [7] Group 3: Industry Context - The Internet - Software industry, to which DocuSign belongs, is currently ranked in the top 31% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact DocuSign's stock performance [5]

This presentation 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 presentation other than statements of historical fact, including statements regarding our future ope ...

Core Insights - DocuSign reported strong quarterly earnings for fiscal 2025 fourth quarter, exceeding both market expectations and management forecasts with adjusted EPS of $0.86 and revenue of $776.3 million, reflecting a 9% year-over-year increase [1][2][3] Financial Performance - Adjusted EPS was $0.86, slightly above the estimate of $0.85, and up 13.2% from $0.76 in Q4 2024 [3] - Revenue reached $776.3 million, surpassing the expected $761 million, and representing a 9% increase from $712.4 million in Q4 2024 [3] - Billings increased to $923.2 million, marking a year-over-year rise of 10.8% [3][6] - Free cash flow was reported at $279.6 million, a 12.5% increase from $248.6 million in the previous year [3] Business Strategy and Innovation - DocuSign is recognized as a leader in electronic signatures and agreement technologies, focusing on enhancing its Intelligent Agreement Management (IAM) platform [4] - The IAM platform's international launch contributed to 28% of the growth in international revenue, with offerings available in 14 languages [5] - Product innovation, including the launch of the IAM platform and AI capabilities for contract management, has driven client engagement and market appeal [8] Operational Highlights - The company achieved an adjusted operating margin of 28.8%, exceeding internal guidance and up from 25% the previous year [6] - Subscription revenue reached $757.8 million, a 9% increase from $695.7 million, driven by demand for agreement services and international growth [7] - Stock repurchase activities increased significantly to $683.5 million from $145.5 million last year, reflecting strategic capital allocation [9] Forward-Looking Guidance - Management provided a conservative outlook for fiscal 2026, expecting revenue between $745 million and $749 million for Q1, below the consensus estimate [10] - Projected fiscal 2026 revenue is between $3.13 billion and $3.14 billion, indicating planned growth of about 5% from $2.98 billion in 2025 [11] - Guidance suggests non-GAAP gross margins of 80.5% to 81.5% for upcoming quarters, with a focus on maintaining growth momentum and addressing cost pressures [12]

Financial Data and Key Metrics Changes - Q4 revenue was $776 million, up 9% year over year, while fiscal year 2025 revenue reached $3 billion, an 8% increase year over year [8][24] - Q4 billings were $923 million, up 11% year over year, with full year fiscal 2025 billings increasing by 7% year over year [25] - Non-GAAP operating income for Q4 was $224 million, up 25% year over year, resulting in a 28.8% operating margin [32] - Free cash flow for Q4 was $280 million, with a 36% margin, and for fiscal year 2025, free cash flow was $920 million, a 31% margin [34] Business Line Data and Key Metrics Changes - The dollar net retention rate improved to 101% in Q4, up from 100% in Q3 and from 98% in Q4 of fiscal 2024 [15][26] - Digital self-service revenue growth accelerated for the second consecutive quarter, reflecting improvements in self-service capabilities [16] - The number of large customers spending over $300,000 annually increased to 1,131 in Q4, marking the strongest quarter for large customer growth in two years [28] Market Data and Key Metrics Changes - International revenue in Q4 represented 28% of total revenue and grew 12% year over year [30] - The U.S. business has started to reaccelerate, while international growth continues to outpace the overall business [31] Company Strategy and Development Direction - The company is focused on three strategic pillars: accelerating product innovation, strengthening omni-channel go-to-market capabilities, and increasing operating efficiency [23] - The introduction of Intelligent Agreement Management (IAM) is seen as a transformative step, aiming to establish a new system of record for managing agreements [7][9] - The company plans to continue investing in self-service channels and expanding IAM's capabilities to drive future growth [19][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting strong customer enthusiasm for the IAM platform and the potential for significant growth opportunities [21][42] - The company anticipates a gradual improvement in dollar net retention throughout fiscal year 2026, driven by improvements in gross retention and IAM upsell opportunities [27][79] Other Important Information - Non-GAAP gross margin for Q4 was 82.3%, slightly down from the prior year due to cloud migration costs [32] - The company repurchased $162 million of stock in Q4 and a total of $684 million for fiscal year 2025, utilizing approximately 75% of annual free cash flow [35] Q&A Session Summary Question: Early reception of IAM in enterprise space - Management noted encouraging early signs in enterprise international sales productivity and customer acceptance, with a strong value proposition for larger companies [46][48] Question: Revenue growth guidance in context of billings acceleration - Management explained that revenue growth lags behind billings due to the average contract duration, with expectations for revenue acceleration as billings improve [50][52] Question: Current macro environment impact on e-signature activity - Management reported no material changes in envelope volume trends, indicating stability across sectors and company sizes [58] Question: Preparedness for selling more complex solutions - Management highlighted ongoing training and adjustments in the sales team to prepare for more complex sales cycles, particularly in the enterprise segment [62][66] Question: Opportunity for IAM in customer accounts - Management indicated significant expansion opportunities with IAM, emphasizing the value delivered across various functional areas within organizations [72][75] Question: Net retention expectations - Management clarified that while net retention is expected to be flat in Q1, gradual improvement is anticipated throughout the year due to ongoing retention efforts and expansion opportunities [78] Question: Changes in sales strategy - Management characterized the changes in the sales team as significant but manageable, aimed at transitioning to a more enterprise-focused approach [84]

Financial Performance - Total revenue for Q4 FY2025 was $776.3 million, a 9% year-over-year increase, with subscription revenue also increasing by 9% to $757.8 million[4] - Billings for Q4 FY2025 reached $923.2 million, marking an 11% year-over-year increase[4] - GAAP net income per diluted share for Q4 FY2025 was $0.39, compared to $0.13 in the same period last year[4] - Non-GAAP net income per diluted share for Q4 FY2025 was $0.86, up from $0.76 in Q4 FY2024[4] - Gross profit for the three months ended January 31, 2025, was $616,041,000, compared to $564,479,000 in the prior year, reflecting an increase of 9%[30] - Net income for the three months ended January 31, 2025, was $83,491,000, significantly higher than $27,241,000 in the same period of 2024, marking a growth of 207%[30] - Non-GAAP net income for the year ended January 31, 2025, was $747,209 thousand, an increase from $622,887 thousand in 2024, which is a growth of 20.0%[43] Revenue Guidance - The company expects total revenue for Q1 FY2026 to be between $745 million and $749 million[9] - For FY2026, total revenue guidance is set between $3.129 billion and $3.141 billion[10] Cash and Investments - Cash, cash equivalents, restricted cash, and investments totaled $1.1 billion at the end of Q4 FY2025[4] - Cash and cash equivalents decreased to $648,623,000 as of January 31, 2025, from $797,060,000 in 2024, a decline of 19%[32] - Free cash flow for the year ended January 31, 2025, was $1,017,272,000, compared to $979,526,000 in 2024, showing an increase of 4%[35] Stock and Shareholder Returns - The company repurchased $161.7 million of common stock in Q4 FY2025, totaling $683.5 million for the fiscal year[4] Margins and Expenses - Docusign's non-GAAP gross margin for Q4 FY2025 was 82.3%, slightly down from 82.5% in the same period last year[4] - GAAP operating margin improved to 7.8% for the three months ended January 31, 2025, compared to 1.4% in the same period of 2024[42] - Non-GAAP operating margin for the year ended January 31, 2025, was 29.8%, up from 23.1% in 2024, showing an increase of 6.7 percentage points[42] - Total GAAP sales and marketing expenses for the three months ended January 31, 2025, were $301,288 thousand, a slight increase from $300,221 thousand in 2024[40] - Non-GAAP sales and marketing expenses as a percentage of revenue decreased to 31.5% for the year ended January 31, 2025, from 34.3% in 2024[40] Assets and Liabilities - Total assets as of January 31, 2025, amounted to $4,012,705,000, up from $2,971,290,000 in 2024, representing a growth of 35%[32] - Total liabilities increased to $2,010,013,000 as of January 31, 2025, compared to $1,841,551,000 in 2024, reflecting a rise of 9%[32] Contractual Obligations - Contract liabilities and refund liability at the end of the period for January 31, 2025, were $1,479,266,000, up from $1,343,792,000 at the end of January 31, 2024, marking an increase of 10.1%[46] - The company reported a total of $1,479,266,000 in contract liabilities at the end of the period, which is a key indicator of future revenue recognition[46] New Initiatives - Docusign launched its AI-powered agreement management platform, Docusign IAM, which is gaining traction with customers[2]

Core Insights - Docusign experienced significant growth in fiscal 2025, launching its AI-powered Intelligent Agreement Management (IAM) platform, which has gained rapid traction with customers [2][6] - The company reported strong revenue growth and profitability in Q4, positioning itself well for future opportunities [2] Financial Highlights - Total revenue for Q4 was $776.3 million, a 9% year-over-year increase, with subscription revenue also increasing by 9% to $757.8 million [5] - For the fiscal year, total revenue reached $2.98 billion, an 8% year-over-year increase, with subscription revenue at $2.90 billion, also an 8% increase [5] - Billings for Q4 were $923.2 million, an 11% year-over-year increase, while total billings for the fiscal year were $3.1 billion, a 7% increase [5] - GAAP net income per diluted share for Q4 was $0.39, compared to $0.13 in the same period last year, and for the fiscal year, it was $5.08 compared to $0.36 [5] - Non-GAAP net income per diluted share for Q4 was $0.86, up from $0.76 year-over-year, and for the fiscal year, it was $3.55 compared to $2.98 [5] Operational Highlights - Docusign's IAM platform was globally released in December 2024, enhancing its offerings for sales and enterprise customers [6][10] - The company launched Docusign for Developers in November 2024, allowing partners to build integrations on IAM [7] - The IAM platform includes features such as Identity Wallet for secure identity management and AI-assisted contract review tools [8][10] Guidance - For the quarter ending April 30, 2025, Docusign expects total revenue between $745 million and $749 million, with subscription revenue between $729 million and $733 million [11] - For the fiscal year ending January 31, 2026, total revenue is expected to be between $3.129 billion and $3.141 billion [12] Cash Flow and Stock Repurchase - Net cash provided by operating activities for Q4 was $307.9 million, compared to $270.7 million in the same period last year [5] - Free cash flow for Q4 was $279.6 million, up from $248.6 million year-over-year [5] - The company repurchased $161.7 million in common stock during Q4 and $683.5 million for the fiscal year [5]

Core Viewpoint - DocuSign is set to release its fourth-quarter financial results on March 13, with expectations of increased earnings and revenue compared to the previous year [1]. Financial Performance - Analysts predict DocuSign will report quarterly earnings of 85 cents per share, up from 76 cents per share in the same quarter last year [1]. - The projected quarterly revenue is $761.64 million, an increase from $712.39 million a year earlier [1]. - In the third quarter of 2024, DocuSign reported revenue of $754.8 million, surpassing the consensus estimate of $745.26 million [2]. Stock Performance and Analyst Ratings - DocuSign shares rose 0.8% to close at $80.13 [3]. - JP Morgan upgraded the stock from Underweight to Neutral, raising the price target from $70 to $75 [5]. - JMP Securities maintained a Market Outperform rating with a price target of $124 [5]. - HSBC downgraded the stock from Hold to Reduce [5]. - Citigroup maintained a Buy rating and increased the price target from $87 to $113 [5]. - UBS maintained a Neutral rating and raised the price target from $60 to $100 [5].

Group 1 - Docusign will release its fourth quarter fiscal 2025 results on March 13, 2025, after market close [1] - A conference call to discuss the financial results will be held at 2:00 p.m. Pacific Standard Time [1] - A live webcast of the event will be available on the Docusign Investor Relations website [1] Group 2 - Docusign serves over 1.6 million customers and more than a billion people in over 180 countries [2] - The company specializes in intelligent agreement management, helping businesses unlock critical data trapped in documents [2] - Docusign is recognized as the leading company in e-signature and contract lifecycle management (CLM) [2]

Company Performance - DocuSign (DOCU) closed at $86.73, reflecting a -0.7% change from the previous day, underperforming compared to the S&P 500's 0.24% gain [1] - Over the last month, DocuSign's shares decreased by 4.4%, while the Computer and Technology sector gained 1.76% and the S&P 500 gained 2.37% [1] Earnings Projections - DocuSign is projected to report earnings of $0.84 per share, indicating a year-over-year growth of 10.53% [2] - The consensus estimate for quarterly revenue is $759.96 million, which represents a 6.68% increase from the previous year [2] Analyst Estimates - Recent changes to analyst estimates for DocuSign reflect near-term business trends, with positive revisions indicating optimism about the company's outlook [3] - The Zacks Rank system, which assesses these estimate changes, provides actionable ratings for investors [4] Zacks Rank and Valuation - DocuSign currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining steady over the past month [5] - The company's Forward P/E ratio is 23.81, which is a discount compared to the industry average of 29.86 [6] - DocuSign has a PEG ratio of 2.53, compared to the Internet - Software industry's average PEG ratio of 2.14 [6] Industry Overview - The Internet - Software industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 82, placing it in the top 33% of all industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]