DocuSign, Inc.

Good afternoon, ladies and gentlemen. Thank you for joining DocuSign's third quarter fiscal 2020 earnings conference call. As a reminder, this call is being recorded and will be available for replay from the investor relations section of the website following the call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, Please press star zero on your telephone keypad. I will now pass the call over to Ann Latchin, head of investor relations. Please go ahead.

Ann Latchin Thank you, operator. Good afternoon, everyone. Welcome to DocuSign's third quarter fiscal 2020 earnings conference call. On the call today, we have DocuSign's CEO, Dan Springer, and CFO, Mike Sheridan. The press release announcing our third quarter results was issued earlier today and is posted on our Investor Relations website. Before we get started, I'd like to let everyone know that we will be participating in the UBS Global TMT Conference on December 9th in New York and the Needham Growth Conference on January 15th, also in New York. As other events come up, we'll make additional announcements. Now let me remind everyone that some of our statements on today's call are forward-looking. We believe our assumptions and expectations related to these forward-looking statements are reasonable but they are subject to known and unknown risks and uncertainties that may cause our actual results or performance to be materially different. Please read and consider the risk factors in our filings with the SEC together with the content of this call. Any forward-looking statements are based on our assumptions and expectations to date. and many more. And except as required by law, we assume no obligation to update these statements in light of future events or new information. During this call, we will present GAAP and non-GAAP financial measures. Non-GAAP financial measures exclude stock-based compensation expenses, amortization of acquired intangible assets, amortization of debt discount and issuance costs from our notes, and as applicable, other special items. In addition, we provide non-GAAP, weighted average share counts, and information regarding free cash flows and billings. These non-GAAP measures are not intended to be considered in isolation from or substitute for or superior to our GAAP results. We encourage you to consider all measures when analyzing our performance. For information regarding our non-GAAP information, the most directly comparable GAAP measures, and a quantitative reconciliation of those figures, please refer to today's press release, which can be found again on our website and investors.docuSign.com. I'd now like to turn the call over to Dan. Dan?

Thanks, Annie, and good afternoon to everyone on the call. I'd like to start today with some brief updates on two areas of our business. One, our positive financial results for the third quarter and how we're driving demand for the DocuSign agreement cloud led by our core e-signature offering. A quick recap of our vision and strategy since going public last year and how we've continued to execute against that in this current Q3. I'll hand it over to Mike for a deeper discussion on our financials, after which we can open up for Q&A. So first, let me start with some comments on our third quarter. As many of you know, DocuSign's growth is driven by three primary factors. Increased adoption and use case expansion within our existing customer base, The acquisition of new customers and the development of new solutions that help companies modernize their systems of agreement. We believe our Q3 results reflect ongoing progress across all of those factors. With strong demand for the DocuSign Agreement Cloud, we grew revenue by 40% year-over-year to $250 million and billings by 36% year-over-year 269 million dollars. We acquired 25,000 new customers, approximately 5,000 of which were direct, bringing our total number of paying customers to 562,000 worldwide, of which roughly 69,000 are direct. We were again profitable on a non-GAAP basis with operating income of nearly 17 million dollars. and this is our eighth consecutive quarter of positive non-GAAP EPS. We also saw a solid uptick in our dollar net retention rate to 117%. These positive results showcase that demand for our agreement cloud suite remains strong as we head into our largest quarter of the year. I'd like to share how we are progressing on the vision and strategy we laid out when we went public last year and how we continue to execute in Q3. By now, you're probably familiar with our agreement cloud vision. It builds on top of our global e-signature leadership and helps companies automate and connect their agreement processes both before and after the signature takes place. We first discussed this during our IPO, and at that time, we reinforced the importance of our core e-signature business and clearly articulated the $25 billion opportunity, which is still only about 5% penetrated. We also showed how that TAM could potentially double with the expanded opportunity for the rest of the agreement cloud. Over the past 18 months, We've taken several steps to deliver on that vision. We acquired Spring CM in September last year, and we've integrated its technology and talent into our product line and operations. Our own product development team built and delivered several new agreement cloud solutions, and we partnered with specialist companies to resell select additional products that expand on our offering. We then brought all this together under the Agreement Cloud umbrella, our suite of more than a dozen products now and over 350 pre-built integrations that helps organizations connect and automate their agreement processes. We also collaborated with systems integrators like ATG, Simplus, and Spalding Ridge, who are building out Agreement Cloud practices and broadening our ability to drive success for our joint customers. And amid all of this, we have continued to enhance the functionality of our core e-signature offering with features like responsive signing, where the agreement automatically adapts its formatting to the size and type of the device that the signer is using. In Q3, We continue this momentum by announcing two new agreement cloud products. The first is DocuSign Negotiate. It helps companies that don't yet need full-blown CLM to simplify and accelerate the process of generating, redlining, and negotiating agreements. We just launched the initial version in November, and it's optimized specifically for the Salesforce ecosystem. is DocuSign CLM. This is the next generation of Spring CM's flagship product. It includes all the capabilities of DocuSign Negotiate, plus an end-to-end workflow builder, a centralized contract repository, and a clause library. It is targeted at upper mid-market and enterprise customers. While we're still in the early stages of our Agreement Cloud journey, We are pleased with our progress to date. By expanding our portfolio, we're motivating customers to automate more of their agreement processes, which in turn drives even more e-signature revenue. This virtuous cycle is illustrated by some interesting customer expansions we had in Q3. One of the global leaders in the ride-sharing space has used both DocuSign e-signatures and CLM in their sales, HR, and business operations for many years. Building on that success, the company expanded its use of CLM in Q3 to cover its departments for commercial transactions, emerging technology and legal. This significantly increased the size of our commercial relationship. Additionally, a large US credit union increased its e-signature usage by 300% this year. And in Q3, also made a commitment to use our API to integrate eSignature into its other systems. This company plans to expand eSignature to 10 additional business units next year and will also evaluate using DocuSign CLM for potential implementation. A mobile analytics company expanded its use of eSignature into HR, leveraging our integration with the recruiting software provider Greenhouse. This is a great example of how the agreement cloud's integrations drive departmental expansion, which in turn drives revenue from greater usage. So as I bring my remarks to a close, I want to reiterate that when we went public, we had a strong e-signature business and a vision to expand our offerings for the entire agreement process. We have executed on that vision and the customer response has been strong. Based on our progress, I believe we're in a unique position to create and be a leader in the next big platform category of Agreement Cloud. But just before I hand over to Mike, I also wanted to share two quick executive team updates. The first is that our Chief Product Officer, Ron Herson, will be taking a mid-career break to focus on a health issue in his family. Ron and I have talked about this transition at great length, and he's going to stay with us through the middle of next year. Even though we're incredibly sad to see him leave, we support his decision. We really appreciate his incredible impact during his six-year tenure, and we're proud of the team he's built to continue the innovation at DocuSign. Second update. is our creation of a new Chief Trust and Security Officer role, which former United Airlines CISO Emily Heath is taking on. Emily has an incredible pedigree in the InfoSec industry, and she will oversee information security, application and physical security, and trust services for the company out of our San Francisco office. We're thrilled to have someone of Emily's pedigree join us in this vital role. So that's it for me. Thanks for joining us today. And now Mike will walk you through the Q3 financial.