DocuSign, Inc.

Good afternoon, ladies and gentlemen. Thank you for joining DocuSign's fourth quarter and full year fiscal year 22 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. 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. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. And I will now pass the call over to Roger Martin, Vice President of Finance. Please go ahead.

Good afternoon and welcome to the DocuSign Q4 2020 earnings call. I'm Roger Martin, DocuSign's VP of Finance. Joining me on the call today are DocuSign CEO Dan Springer and our CFO, Cynthia Gaylor. The press release announcing our fourth quarter results was issued earlier today and is posted on our investor relations website. 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 pace of digital transformation and factors affecting customer demand, including as a result of the pandemic, are based on our best estimates at this time and are therefore subject to change. 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 accept 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, 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, fair value adjustments to strategic investments, impairment of lease-related assets, 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 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 gap measures, and a quantitative reconciliation of these figures, please refer to today's earnings press release, which can be found on our website at investor.docuSign.com. I'd like to turn the call over to Dan Springer. Dan?

Thank you, Roger. Good afternoon, everyone. We have a lot to share with you today as we'll cover our performance for the quarter and for the entire fiscal year. We'll talk in more detail about some important sales wins and recent innovations that continue to bring our vision for the agreement cloud to life. Finally, we'll look ahead to our focus areas for fiscal 23. I'd like to start by sharing a few observations about the quarter. Q4 total revenue grew 35% year-over-year to $581 million with an 18% non-GAAP operating margin. Billings grew 25% year-over-year in the quarter. International revenue grew 55% year-over-year. We added nearly 60,000 new customers in the quarter, and that's a 31% increase year-over-year. And we continue to see strong net dollar retention of 119% in Q4, which is at the high end of our historical range. Looking at the year, we grew revenue 45% to over $2 billion, and billings by 37% to over $2.35 billion. we added more than 280,000 new customers, ending the year with over 1.17 million customers in total. These results reflect our team's unwavering dedication amid the macro challenges and the needed shifts in our business coming out of COVID. They also showcase continued tailwinds for the digitization of agreement workflows for businesses of every shape and size. We recognize, of course, that fiscal year 22 had two distinct chapters that contribute to our growth story. During the peak of the pandemic, urgent need drove dramatic acceleration of purchases, and our sales focus was squarely set on meeting that elevated demand. This motion carried through the first half of fiscal year 22. In the second half of the year, there were more challenging macro conditions impacting our customers' priorities. We saw a diminished level of urgency in their buying patterns. customers turned their focus to investments and projects that were delayed during the heart of the pandemic. As we saw urgent demand wane, we had just begun to shift in our sales motion back to a demand generation mode of cross-sell, up-sell, and departmental expansion. While we excelled at demand generation for many years pre-COVID, ultimately, the shift in customer buying patterns coming out of the pandemic was quicker than we anticipated, and we didn't move fast enough as an organization. Our move from capturing high volumes of customer demand to reverting back to generating demand is now well underway. We expect this work will continue through fiscal year 2023 as we make tangible progress moving through the year. At over $2 billion in annual revenue, we believe we're still very early in the first 10% of the $50 billion agreement cloud market opportunity. Digital transformation remains a high priority for businesses at every scale in every industry. Given our strong brand, leading market position, and product differentiation, DocuSign is uniquely positioned to lead and capture that market opportunity with eSignature and the broader agreement cloud. As the pandemic subsides and people begin to return to the office, they are not returning to paper. eSignature is clearly here to stay, and the movement toward the broader agreement cloud will only continue to gain prominence. We are confident we have massive market space to grow. When we think about the opportunity this year presents, it falls into two main buckets. The ways we're helping our customers succeed on our platform and the innovation we're bringing to market. Last quarter, we doubled down on our global go-to-market methodology and began driving our field org to focus on expanding opportunities. As our customers scale their usage across departments and new use cases, our field approach is also evolving. To that end, we've been bolstering our field leadership with strong leaders. with GMs in EMEA, APJ, and LATAM, along with recent additions across North America in the commercial and SMB segments. And we're very close to finalizing a new North American enterprise sales leader as well. Importantly, we've begun a search for an executive to lead the global field organization that's success and sales. This supports our goal of scaling our business to $5 billion and beyond. As part of this change, once we have secured and onboarded our new leader, Lauren will transition from DocuSign. Now, it's hard to think of a sales executive as having more impact on a company than Lauren has had here in his 14 years. From director to North American leader to CRO, he has really built the sales organization here. And as noted above, he's leading the way as we expand the sales leadership team for our next level of scale. He'll be staying with the company this year, and he remains focused on delivering for our customers and for driving our growth. Lorne will be a big part of helping us to transition to the new sales and success leader in the coming months. We're already encouraged from the results we're seeing from these efforts, as we are upselling eSignature to more departments and use cases, cross-selling our key add-ons like identity verification, notary, and monitor, as well as cross-selling our CLM products. For example, Last quarter, we expanded our relationship with one of the world's largest insurance and financial services companies, implementing new use cases for remote online notary for affidavit citizenship verification and claims recovery, and DocuSign Verify for loans and cash-out statements. By deepening their adoption of the DocuSign Agreement Cloud, they shared that the efficiency gained by their employees and independent agents enabled them to realize tremendous savings in both time and operational expense, all while improving the self-service customer experience and maintaining strict regulatory compliance. We're hearing the same story across our key verticals with new customers as well. Last quarter, one of the largest pharmacy chains in the U.S. adopted e-signature and our AI-powered CLM products as part of their ongoing digital transformation initiative. The Agreement Cloud was the answer to replacing the manual processes across their agreement systems. which were described to us as painful and time-consuming. From that initial order, we're now seeing 75 different use cases across departments and an opportunity to deliver nearly 10 million envelopes annually. Around the world, DocuSign's value prop is just as strong. Last quarter, for example, we welcomed Westpac New Zealand, part of Australia's Westpac group, to the agreement cloud. Like so many customers who start with DocuSign eSignature, our exceptional employee and customer experience opens the door to more use cases. For Westpac New Zealand, this led to the adoption of CLM, GenPlus Send, and a significant API integration, all within the first year of our relationship. The second big opportunity this fiscal year is our continued innovation to drive stickiness and deepen our roots as a multi-product company. More users are engaging with DocuSign every day as we work to make it even easier for them to adopt more of the advanced capabilities of the Agreement Cloud, eliminating paper, automating manual processes, and connecting customers to the other systems they already use. A great example is the new DocuSign eSignature app for Zoom that enables organizations to reimagine their customer agreement process with virtual face-to-face signing experiences that our customers' customers really love. Through this new partnership, our customers can now securely share, review, and complete agreements right from Zoom. In the next few weeks, we'll launch a new e-signature capability called Joint Agreements for businesses with a network model. Joint Agreements allows for a single customer experience with co-management of agreements between multiple parties behind the scenes. This makes things easier for every party involved. We believe Joint Agreements will inspire large financial services firms to encourage the use of DocuSign by their networks, which often number in the tens of thousands of advisors or agents. Next month, we're also planning to launch an important new feature called Delayed Routing for DocuSign eSignature. This allows users to add timing delays during the routing process of an envelope. This fine-tuning of the agreement process has become an increasingly popular customer ask, especially for situations where regulations require a delay, like some franchising agreements that require a one-week delay for a review before they can be signed. In total, fiscal 22 results were very strong, and I'm proud of how we as a team are moving to adapt and recalibrate to address the rapidly shifting market dynamics that we're facing post-COVID. Despite the temporal headwinds, we're continuing to focus on winning both new customers and existing customer expansions, and on driving continued innovation. As a clear market leader, we've got long-term momentum on our side, a vision that's unchanged, and a massive TAMP. The changes we're making to our go-to-market strategy will indeed take a few quarters to play out, but we believe we're still just scratching the surface of our long-term opportunity and our better position than ever for future success. Before handing it over to Cynthia to walk you through our Q4 results and the fiscal year 2023 outlook in more detail, I want to take a moment to thank the DocuSign team and our customers. Together, you're inspiring us to continue pioneering. Just this week, DocuSign was named one of Fast Company's top 10 most innovative enterprise companies. It's great to see others recognize our work, but more importantly, it's a true testament to our hardworking team and the positive impact our customers are helping us make on the world. With that, Cynthia, over to you.