Summary
DocuSign reported total revenue of $469.1 million for FY2022 Q1, up 58% from the prior-year quarter. Billings, a non-GAAP measure the company defines as total revenue plus the change in contract liabilities and refund liability less contract assets and unbilled receivables, were $527.4 million, up 54% year over year. Subscription sales supplied the bulk of the top line, with the rest from professional services and other work. The customer base is still expanding quickly. DocuSign counted over 980,000 customers at April 30, 2021 against over 660,000 a year earlier, and enterprise and commercial customers grew to over 135,000 from over 85,000. International revenue was 21% of total revenue, up from 18%. DocuSign also reported 673 customers spending more than $300,000 in annual contract value, measured in billings, as of April 30, 2021.
Profitability improved on nearly every line. GAAP gross profit was $363.84 million, up 63.2% from the prior-year quarter, and GAAP gross margin was 77.6%, up 2.5 percentage points from 75.1%. The GAAP operating loss narrowed to $10.74 million from $41.85 million, lifting GAAP operating margin to -2.3% from -14.1%. The GAAP net loss narrowed to $8.35 million from $47.80 million, and GAAP diluted loss per share was $0.04 against $0.26. Non-GAAP net income per diluted share was $0.44 on 208 million shares, compared with $0.12 on 197 million shares. Non-GAAP operating margin was 20% versus 8%. Stock-based compensation and the related employer payroll taxes on employee stock transactions account for most of the gap between the two views.
Cash generation was much stronger. Operating cash flow was $135.60 million for the quarter, up 129.3% from $59.14 million. Free cash flow, which the company defines as operating cash flow less purchases of property and equipment, was $123.0 million compared with $32.8 million. Capital expenditures fell 52.3% to $12.60 million. The backlog expanded too. Deferred revenue was $829.84 million, up 50.2% from the prior-year quarter, and remaining performance obligations reached $1.20 billion, up 52.9%. Cash, cash equivalents, restricted cash and investments were $875.8 million at the end of the quarter.
Management pointed to the product work behind the numbers. DocuSign shipped new eSignature features such as Signing Insights, improved data verification, eWitness enhancements and an integration for Microsoft Teams. It introduced DocuSign Notary for remote online notarization in limited release and added a CLM 360 dashboard for tracking supplier agreements, along with Workday Financial Management and NetSuite Financials integrations. Gartner named the company a Leader in its 2021 Magic Quadrant for contract lifecycle management for the second year in a row, placing it highest among 15 vendors on ability to execute.
Guidance covers both the next quarter and the full fiscal year. For the quarter ending July 31, 2021, DocuSign targets a non-GAAP gross margin of 79% to 81%, a non-GAAP operating margin of 16% to 18% and 205 million to 210 million non-GAAP diluted weighted-average shares. For the full fiscal year ending January 31, 2022, it guides to the same non-GAAP gross margin and operating margin ranges and the same share count range, and includes a provision for income taxes. The company has not reconciled its non-GAAP guidance to the corresponding GAAP measures because stock-based compensation cannot be reasonably predicted.
The main risk is demand tied to the pandemic. DocuSign has gained as organizations shifted to remote, digital workflows, and management warned that if demand falls as the pandemic eases and businesses return to in-person operations, the business could suffer. DocuSign has posted operating losses in the past and said it may not reach profitability in the foreseeable future given the investments it plans to make. Other named risks include competition, the cost of expanding the direct sales force and international operations, integrating acquisitions such as Seal Software and Liveoak Technologies, hiring and retaining staff, and maintaining effective internal controls. The company had a $500.0 million credit facility that may be increased by an additional $250.0 million, with no borrowings outstanding as of April 30, 2021.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $469.1M | $430.9M | +8.9% | $297.0M | +57.9% |
| Gross profit | $363.8M | $329.3M | +10.5% | $223.0M | +63.2% |
| Gross margin | 77.6% | 76.4% | +1.1 pp | 75.1% | +2.5 pp |
| Research & development | $85.4M | $80.1M | +6.6% | $54.2M | +57.5% |
| Sales & marketing | $239.1M | $221.9M | +7.8% | $171.8M | +39.2% |
| General & administrative | $50.0M | $52.2M | -4.1% | $38.8M | +28.9% |
| Total operating expenses | $374.6M | $354.2M | +5.7% | $264.8M | +41.4% |
| Operating income (loss) | -$10.7M | -$24.9M | +56.9% | -$41.9M | +74.3% |
| Operating margin | -2.3% | -5.8% | +3.5 pp | -14.1% | +11.8 pp |
| Net income (loss) | -$8.4M | -$72.4M | +88.5% | -$47.8M | +82.5% |
| Net margin | -1.8% | -16.8% | +15.0 pp | -16.1% | +14.3 pp |
| Diluted EPS | -$0.04 | — | — | — | — |
| Customers | 980,000 | 890,000 | +10.1% | 660,000 | +48.5% |
Risks
DocuSign attributes a substantial increase in demand and FY2022 Q1 revenue up 57.9% versus the prior-year quarter to pandemic-driven remote, digital operations, but warns that growth may not continue as the pandemic lessens and businesses return to in-person work. It has already seen slower growth or declining spending in travel and hospitality, and may face volatility in customer demand, increased churn, late or non-payment, delayed purchasing, and pricing pressure.
The company derives a majority of revenue from e-signature solutions and substantially all subscription revenue is from e-signature subscriptions. Slower or declining adoption of e-signature without a corresponding increase in other products, such as DocuSign CLM, Payments, and ID Verification, could harm operating results.
The company has faced past security incidents, including a March 2017 phishing attack that accessed a list of email addresses and an April 2020 brute force password attack that exfiltrated a portion of source code from an isolated testing environment. It also warns that remote work during COVID-19 increases cybersecurity risk and that future incidents could lead to regulatory actions, litigation, indemnity obligations, and customer loss.
DocuSign is subject to evolving laws on e-signature, privacy, data protection, marketing, and information security, including GDPR, CCPA, FedRAMP, and eIDAS. Failure to comply could result in fines, enforcement actions, bans on processing EU personal data, or documents executed through its products being rendered unenforceable, harming customer trust.
The market is highly competitive, with Adobe identified as the primary global e-signature competitor and additional competition in CLM, payments, and identity verification. Many competitors have longer operating histories, greater resources, stronger brand recognition, and broader distribution, and could reduce prices or introduce competing products.
Sales cycles for enterprise and commercial customers are generally three to nine months and can be substantially longer for DocuSign CLM and advanced offerings. The timing of revenue recognition is difficult to predict, and the company expends significant sales and marketing and contract negotiation costs before a sale occurs.
As of April 30, 2021, DocuSign had $78.3 million principal outstanding under its 2023 Notes, $690.0 million under its 2024 Notes, and $500.0 million available under its credit facility. The debt may limit flexibility and access to capital, and the company may lack sufficient cash to settle conversions or repurchase notes upon a fundamental change.
Success depends on management and key employees, and competition for software developers and skilled sales and operations professionals is intense, particularly in the San Francisco Bay Area and Seattle. The company notes management changes, including Cynthia Gaylor becoming CFO in September 2020, and relies on at-will employment for senior management and key employees.
Revenue grew from $974.0 million in FY2020 to $1.5 billion in FY2021, and the company expects its revenue growth rate to decline as scale increases. Rapid growth has placed significant demands on management and operational and financial resources, and failure to manage growth could harm results.
Because subscription revenue is recognized over contracts typically one year in length but up to three years or longer, downturns or upturns in sales contracts are not immediately reflected in operating results. A shortfall in new or renewed contracts in any quarter may not significantly reduce that quarter's revenue but could negatively affect future quarters.
International revenue represented 21% of total revenue in the three months ended April 30, 2021, and approximately 30% of full-time employees were located outside the United States as of April 30, 2021. Expansion creates risks including compliance with privacy and data security rules, currency fluctuations, tax complexities, and local labor regulations.
DocuSign has acquired SpringCM, Seal Software, and Liveoak Technologies and may pursue more acquisitions. Acquisitions could divert management attention, disrupt operations, dilute stockholders, or fail to realize anticipated benefits if integration is unsuccessful.
SaaS KPIs
All quarters →Total Customers
Free Cash Flow
Non-GAAP Operating Margin
Billings
Non-GAAP Gross Margin
Enterprise and Commercial Customers
Summary, forecast, risks and KPIs are extracted from DOCUSIGN, INC.'s SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.