DocuSign(US:DOCU)2021-12-05 16:00Financial Performance - Total revenue for the three months ended October 31, 2021, was $545.5 million, a 42.5% increase from $382.9 million in the same period of 2020[111] - Subscription revenue accounted for 97% of total revenue in the three months ended October 31, 2021, compared to 96% in the same period of 2020[102] - The company reported a net loss of $5.7 million for the three months ended October 31, 2021, an improvement from a net loss of $58.5 million in the same period of 2020[111] - Total revenue for the three months ended October 31, 2021, was $545.5 million, a 42% increase from $382.9 million in the same period in 2020[134] - Gross profit for the three months ended October 31, 2021, was $429.5 million, yielding a gross margin of 79%, up from 74% in the same period in 2020[133] - Non-GAAP gross profit for the three months ended October 31, 2021, was $449,419 thousand, up from $301,926 thousand in the same period of the previous year, representing a 48.9% increase[177] - Non-GAAP gross margin for the same period improved to 82%, compared to 79% in the prior year[177] - Free cash flow for the three months ended October 31, 2021, was $90,019 thousand, significantly higher than $38,050 thousand in the same period last year, indicating a 136.5% increase[179] - Non-GAAP net income for the three months ended October 31, 2021, was $121,094 thousand, compared to $46,125 thousand in the same period last year, marking a 162.5% increase[179] - Billings for the three months ended October 31, 2021, reached $565,239 thousand, up from $440,411 thousand in the same period last year, representing a 28.4% increase[179] - GAAP loss from operations for the three months ended October 31, 2021, was $(3,358) thousand, an improvement from $(48,470) thousand in the same period last year[177] Customer Growth - The number of customers increased to over 1.1 million as of October 31, 2021, up from nearly 820,000 a year earlier, including over 159,000 enterprise and commercial customers[112] - The number of customers with annual contract values exceeding $300,000 increased from approximately 30 in January 2013 to 785 as of October 31, 2021[105] - The company anticipates continued growth in customer spending as existing customers expand their use of the software suite across various use cases[116] Revenue Composition - International revenue represented 23% of total revenue for the three months ended October 31, 2021, compared to 20% in the same period of 2020[117] - Subscription revenue increased by $162.0 million, or 44%, in the three months ended October 31, 2021, and by $502.1 million, or 52%, in the nine months ended October 31, 2021, primarily due to new customer acquisitions and upsells[134] - Cost of subscription revenue increased by $14.7 million, or 21%, in the three months ended October 31, 2021, primarily driven by higher costs to support the growing customer base[137] Expenses and Investments - Operating expenses for the three months ended October 31, 2021, totaled $432.8 million, representing 79% of total revenue, compared to 87% in the same period in 2020[133] - Research and development expenses increased to $102.6 million, or 19% of total revenue, consistent with the same percentage in the prior year[138] - Selling and marketing expenses were $275.6 million, or 51% of total revenue, down from 55% in the same period in 2020[133] - Sales and marketing expenses increased by $65.7 million, or 31%, in the three months ended October 31, 2021, and $200.4 million, or 35%, in the nine months ended October 31, 2021, primarily due to investments in workforce and technology[141] - Research and development expenses increased by $29.2 million, or 40%, in the three months ended October 31, 2021, and $91.3 million, or 48%, in the nine months ended October 31, 2021, driven by workforce and technology investments[145] - General and administrative expenses rose by $4.4 million, or 9%, in the three months ended October 31, 2021, and $27.8 million, or 20%, in the nine months ended October 31, 2021, mainly due to workforce investments[146] Cash Flow and Liquidity - Cash, cash equivalents, restricted cash, and investments totaled $908.2 million as of October 31, 2021[111] - Cash provided by operating activities was $418.7 million for the nine months ended October 31, 2021, compared to $234.7 million for the same period in 2020, reflecting increased sales and cash collections[160] - Net cash used in investing activities was $157.7 million for the nine months ended October 31, 2021, primarily driven by net purchases of marketable securities[161] - Cash used in financing activities was $320.7 million for the nine months ended October 31, 2021, primarily due to net payments related to equity plans[163] - As of October 31, 2021, the company had $818.5 million in cash and cash equivalents and short-term investments, along with $89.5 million in long-term investments[150] - The company believes existing cash and marketable securities will be sufficient to meet working capital and capital expenditures needs over at least the next 12 months[155] Interest and Currency Risks - Interest expense decreased by $6.3 million in the three months ended October 31, 2021, and $18.2 million in the nine months ended October 31, 2021, primarily due to lower amortization expense[147] - A hypothetical 100 basis point increase in interest rates would result in an approximately $2.4 million decrease in the fair value of the company's investment portfolio[182] - The company has no exposure to changes in interest rates from debt obligations as of October 31, 2021, due to fixed-rate notes issued[183] - A strengthening or weakening of the U.S. dollar against other currencies may impact operating results expressed in U.S. dollars[184] - An immediate 10% increase or decrease in the U.S. dollar's value relative to other currencies is not expected to materially affect operating results[184] - The company has not engaged in hedging foreign currency transactions to date, but may consider it in the future[184]