DocuSign, Inc.

Good afternoon, ladies and gentlemen. Thank you for joining DocuSign's first quarter fiscal 22 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. 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 Annie Leshin, head of investor relations. Please go ahead.

Thank you, Operator. Good afternoon, everyone. Welcome to DocuSign's first quarter fiscal 22 earnings conference call. On the call today, we have DocuSign CEO Dan Springer and CFO Cynthia Gaylord. The press release announcing our first quarter results was issued earlier today and is posted on our investor relations website along with our quarterly slides. We plan to post prepared remarks on the site beginning next quarter. Before we get started, I'd like to let everyone know that we plan to participate virtually in a few upcoming events. These include Evercore's PMT Conference on June 7th, Bank of America's 2021 Global Tech Conference on June 9th, and Baird's 2021 Global Consumer Tech and Services Conference on June 10th. 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. In particular, our expectations regarding the effects of the COVID-19 pandemic on our business, including the potential effects of the pandemic subsiding, are based on our best estimates at this time and are therefore subject to change. Please read and consider 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, 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'll present GAAP and non-GAAP financial measures. Non-GAAP financial measures exclude stock-based compensation, employer payroll tax on employee stock transactions, amortization of acquired intangible assets, amortization of debt discount and issuance costs from our notes, acquisition-related expenses, and, as applicable, other special items. we provide non-GAAP weighted average share count and information regarding free cash flows and billings. These non-GAAP measures are not intended to be considered in isolation from, a 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 financial information, the most directly comparable GAAP measures, and a quantitative reconciliation of those figures, please refer to today's earnings press release, which can be found on our website at investor.docuSign.com. And now I'd like to turn the call over to Dan. Dan?

Thanks, Annie. Good afternoon, everyone, and welcome to our first quarter earnings call for fiscal 2022. We have a lot to cover today, and I'd like to focus my comments on four key areas. Our strong Q1 fiscal year 22 results, more insight into the breadth of our customer journey, the international business landscape and how we see that evolving, and finally, the key investments we made in technology and people is important. But before I get to the financials, I want to share some observations on our market overall. Since the start of the pandemic, DocuSign has helped accelerate access to healthcare, government, education, small business lending, and many other services around the world. What began as an urgent need has now transformed into a strategic priority. And as a result, DocuSign has become an indispensable part of many organizations' business processes. Put another way, once businesses digitally transform their agreement processes, they simply don't go back. We believe this trend will only accelerate as the anywhere economy continues to emerge. In fact, just a few weeks ago, we were excited to welcome DocuSign's one millionth customer to the platform. This move to digital has manifested itself in a great start to the year for DocuPyte. We saw strong performance on all fronts, delivering a balance of growth and profitability at scale. Our revenue grew 58% year-over-year to $460 million for the quarter. International reached a milestone with over $100 million in revenue for the quarter. Non-GAAP operating margins an all-time high at 20% as our top-line growth outpaced our investment. And strong expansion across our existing customer base drove record-high dollar net retention of 125%. From any vantage point, these are exceptional results that reflect the continued demand and engagement we are seeing from our customers across all industries and use cases. I am particularly proud of the DocuSign team's ability to execute despite the vast majority of our 6,000 strong workforce still working remotely. As we've said consistently, e-signature is the on-ramp to DocuSign for most companies. This quarter was no exception as we saw new and existing customers adopt and expand at record rates with use cases and envelope volumes increasing significantly. Let me give you just a few examples. A large delivery service provider needed to capture, monitor, and report on new benefit structures for its workers. We helped the team leverage e-signature power form and DocuSign Insight analytics to create an entirely new and streamlined process. This saved them hundreds of hours of manual processing, created accurate and efficient management reporting, and it provided an extensible solution for future growth. One of our restaurant service customers needed a way to streamline and automate their agreement generation and signing processes as their industry began to reopen. We worked with them to improve turnaround time and increase sales productivity. Importantly, this dramatically decreased the time to complete agreements from two weeks down to just three days. And one of our leading grocery production customers was printing over a million pieces of paper a month as part of their manufacturing process. They started using e-signature templates and quickly took more than 100,000 sheets of paper out of circulation, a number that will only grow now that other business units can leverage the technology. Now, this expansion was not just domestic, but international as well. Q1, our business outside the U.S. contributed 21% to total revenue, and it continues to be the biggest future growth driver for us and the largest part of our camp. Today, this looks much like our North American business several years ago, customers growing and expanding in similar ways. Take one of our multinational telecom exam customers as an example. they were looking for a way to digitally transform their internal and external contracting processes and reduce their environmental impact. Using the DocuSign API, the company now has defined workflows for verification, validation, and the automatic archiving of the contract. This then deployed the solution in countries across Europe and Sub-Saharan Africa. In response to the pandemic, an international pharmaceutical customer, faced a huge increase in new users in a regulated industry where standard, advanced, and qualified e-signatures are required. Our teams worked together, and the results speak for themselves. Amid a 270% increase in new users, they sent 650% more envelopes and completed them 50% faster.