Docusign Q1 Results

Docusign up 6% after hours on strong results.

First Quarter Financial Highlights

-Total revenue was $469.1 million, an increase of 58% year-over-year. Subscription revenue was $451.9 million, an increase of 61% year-over-year. Professional services and other revenue was $17.1 million, an increase of 7% year-over-year.

-Billings were $527.4 million, an increase of 54% year-over-year.

-GAAP gross margin was 78% compared to 75% in the same period last year. Non-GAAP gross margin was 81% compared to 79% in the same period last year.

-125% Net Dollar Retention

-International Growth up 84%

-Free cash flow was $123.0 million compared to $32.8 million in the same period last year


Q2 - $479 to $485 - top line estimate of 42% revenue growth

Full Press Release:…




BEAT and GUIDANCE (numbers in M)

On 3/11/21 at Q4 earnings, they guided to revenue of 436, which was a 1% QonQ growth. They delivered 469, a 7.6% beat over the guidance.
They grew 9% QonQ, and 58% YoY.

Now they are guiding for Q2 to be at 485, a 3% QonQ growth, and 42% YoY.
Given their history of beats, let’s be conservative and see if they can deliver 500. Let’s leave it at that, right now pure speculation for fun.

They also raised their guidance for the FY2022 revenue from 1973 in last Q to 2039, (from 36% to 40% full year growth)


They ended Q1 with 988K customers, a 15% increase from 892K last Q. They added 96 thousand customers in the last Q, wow (11% more than last Q addition of 72 thousand)

How about Enterprise customers? 136 thousand versus 125 thousand last Q, they added 11 thousand enterprise customers.
Enterprise customers are at 14% of all customers, similar to last Q.

They also increased customers with 300K ACV from 599 to 673; 74 more customers this Q paying more than 300K, wow

That’s about it for the first look at Earnings. I will listen/read to the conf call and peruse the docs again. So far long DOCU at 6% of our portfolio


I agree this was a superb report and I might be forced into an about turn and re-enter.

I really did not think that the growth would re-accelerate or that the eSigning TAM had much more potential for them and without the emergence of SOA then I didn’t think that there was much of a moat. I sign with clients all the time and it’s arbitrary whether it is Docusign, Adobe or HelloSign. (We have none and we can use any and all of them).

SOA is where the TAM, moat and revenue runaway acceleration gets interesting for me and I will need to hear from the conf call what is going on with that as it has been a long time coming.

With these numbers and with progress on SOA I can see myself wanting to buy back in.




Ok I just went through the transcript and even though the numbers are great and international expansion is awesome and some of the use cases like eWitness is really compelling, frankly I was disappointed by:

  1. How little they discussed SOA or Agreement Cloud and CLM and still how little they wanted to highlight any substantial contribution in the near term

  2. The fact that they still had to grow headcount by 40%+ and are 6000. They are supposed to be a SaaS software business that sells and itself and is self serve by customers or is as light touch as possible. They are at $200,000 revenues per employee per year which is lower than pharmaceutical companies and even some management consulting /professional service firms. (Roche I think is at $400,000 in revenues per employee. Digital Turbine reaching $1m per employee with $1bn per year with 1000 employees).

Hmm - leaves me wondering what to make of this as it isn’t as clear cut as I had hoped.



FYI - here’s some data on average revenues per employee for SaaS companies, it’s a year old but you see the picture.

Docusign is getting to be quite large scale business and instead of adding leverage it seems to be going below average and is getting worse……



On the positive side, the earnings were great. Revenue is accelerating, DBNRR is at an all-time high, international growth was at 84%, gross margins at 81%.
Look at slides 11 and 12. Leverage, cash flow, and profitability are all going in the right direction. I’m not sure how much of the hiring is related to agreement cloud vs the core eSignature biz.

Docusign was wrongly pegged as just a covid stock. Now comes the price target increases and the stock could see a lot of upside.

On the negative, as mentioned above, CLM seems a ways off. CFO on CC “So, I would expect it to be a few years before it’s really a meaningful contributor. And when you think about kind of the results that we posted the last few quarters, they are primarily driven by eSignature. And just given the scale and the growth rate kind of on the core piece, it’s going to take a while for Agreement Cloud, even if it’s growing quickly within to really have be a meaningful contributor from a top-line perspective.”


It’s clear from the earning call that their entire focus revenue wise is on International expansion where the still low hanging fruit is. If you pay attention to the call they are super excited about the opportunity ahead, 21% of revenue is now International and highest growing segment. They need people to support expansion, localizing your business is not an easy task but once achieved you can use same team to upsell any additional services like CLM when that is ready. DocuSign is a great cash generating machine with huge runaway regardless when their contract management kicks in.

With their DBNER expansion rate and rate of getting new clients, I don’t see why they won’t be cranking 40% plus rev growth for the next couple of years.