DocuSign, Inc.

Good afternoon, ladies and gentlemen. Thank you for joining DocuSign's third quarter fiscal year 23 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. I will now pass the call over to Heather Harwood, and Head of Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, and welcome to the DocuSign Q3 2023 Earnings Call. I'm Heather Harwood, DocuSign's Head of Investor Relations. Joining me on the call today are DocuSign's CEO, Alan Teegerson, and our CFO, Cynthia Gaylor. The press release announcing our third 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 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 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. 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 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. I'd now like to turn the call over to Alan. Alan?

Thanks, Taylor, and good afternoon, everyone. I'm happy to be here for my first earnings call as DocuSign's CEO. I'd like to begin by thanking Maggie Wilderotter for leading the team as interim CEO. Maggie set the stage for a smooth and seamless transition, And we're grateful to her for her leadership and for her continued stewardship as our board chair. There are three main points I'd like you to take away from today's call. First, we delivered solid third quarter results, exceeding the key operating metrics we laid out last quarter, despite the continued macro headwinds. Our results are a reflection, I think, of the continued signs of stabilization across the business. I'd like to commend our team for their unwavering commitment despite the considerable distraction. Second, as the global leader in the e-signature category, DocuSign is expanding across broader agreement-related workflows. We have challenges to address, but we have an exceptionally strong foundation and meaningful competitive advantage. Which leads me to my third point. I believe our future is bright. Along with the team, I'm personally energized by the opportunity and the work that lies ahead. I'm confident in our progress, and I believe we are unequivocally well positioned for the long term. Before I move on to discuss the future of our business, I want to share what compelled me to join DocuSign. I've followed the company for many years, and like our over 1 billion users, I find our value proposition distinctive and invaluable. We built a powerful brand that's recognized by decision makers well before we even engaged with them. That combination of affinity that DocuSign has with customers and users and our untapped market potential is very rare in the enterprise software space. DocuSign created and built the e-signature category, yet agreement processes are still at the early stages of moving from pen to paper to more automated ways of working. In fact, I believe we're just at the beginning of revolutionizing how businesses initiate, negotiate, and manage agreements. And we will lead that, as we did for eSignature. We provide solutions for customers of all sizes, industries, and functions. During my almost 12 years at Google, I first led the global SMB and mid-market business, and then the enterprise business in the Americas, including managing our relationships with our largest global partners. I've experienced firsthand how exceptionally powerful a broad, diversified customer base can be, and I'm excited to bring that experience to DocuSign. For my first 60 days, I've focused on gaining a deeper understanding of our business, meeting with employees across the company, as well as spending time with customers and partners. Through these conversations, I've started to identify some critical areas in which we can improve to strengthen our value proposition in addition to scaling the business by streamlining and creating efficiencies. I continue to see customers embrace and expand with our core e-signature offering. For example, this past quarter, one of the UK's largest healthcare providers expanded their use of e-signature. They began the journey as a customer during the pandemic, and they've now migrated their entire patient onboarding process and adopted our products across their HR, legal, joint ventures, and other departments. Key criteria in the recent competitive selection process included privacy and security of their customer data and the ability to utilize the advanced workflow features we offer. Notwithstanding our considerable strengths, I believe it's important to acknowledge where we have not executed as well. It's clear we did not pivot quickly enough and we were slow to make changes. As we experienced tremendous growth during the pandemic, We did not scale the team properly. We lost some innovation velocity. We didn't fully address the changing market dynamics nor mature our operations and systems sufficiently. We understand those gaps and we're committed to moving forward with more transparency. I think the good news is that the future is in our own hands. Let me turn to our focus going forward. We are committed to broadening the category. That starts with a more clearly defined product roadmap that leverages our core e-signature strength and our vision of delivering easier, smarter, trusted agreements. We see opportunities beyond the replacement of paper signatures to deliver innovative new experiences and to integrate more deeply with partner applications. If you think about it, many use cases don't require editing or completion of a static, unstructured, highly formatted traditional agreement. Instead, I think data capture for agreements should happen through digital forms on the web or in an app. The agreements themselves should be dynamically generated, and the metadata should be automatically captured to enable personalization for future interactions. With our new web forms offering, which is currently in early beta, we're enabling our customers to transition from a PDF-centric experience to guided web-native experiences. We're also continuing to innovate on the CLM front. further solidifying our vision, customer validation, and execution within the CLM space. Most recently, DocuSign was named a leader in the Gartner 2022 Magic Quadrant for CLM for the third consecutive year. We placed highest of all vendors on the ability to execute access and second highest on the completeness of vision access. These products directly support each other. We're encouraged by how existing e-signature customers continue to embrace our CLM capabilities to enhance and speed their workflows. For example, this past quarter, we expanded our relationship with one of the largest ride-sharing organizations. Our team identified key areas of expansion using our signature and CLM product to support their evolving business needs. They expanded their e-signature footprint and are now more streamlined in their internal processes. thanks to our CLM offering. Over the next few quarters, we'll expand our work here and augment the roadmap to broaden the power of managing workflows throughout the agreement lifecycle. While we're not seeing dramatic shifts recently in the competitive landscape, it is important to recognize that today's market is more competitive, particularly for the basic sign use cases, which further highlights the importance of an innovative and differentiated product portfolio like DocuScience. I want to touch on our plans to improve operations and sales productivity. While we are continuing to lead with innovation, we are staying hyper-focused on making the customer experience more seamless and integrated, particularly with our go-to-market motion. I think that starts with bolstering our self-service initiatives. I was deeply involved in enabling self-serving for every stage of the order cycle for customers of all sizes at Google. And I know the power of a frictionless experience. I'm confident we can achieve both improved customer experiences and greater go-to-market efficiency as we move in this direction. We already have over 1 million customers who self-serve. Inbound traffic to our website continues to grow, and we have a highly recognized and trusted brand. So we have a lot to work with. We also want to create stronger efficiencies in our direct sales and field efforts. and strengthen our partner ecosystem. So I'm pleased that sales attrition is continuing to moderate, and we're seeing stabilization in the field. Moving forward, we're focused on improving funnel conversion, consolidating and streamlining our teams, strengthening our focus on customer success and retention, and implementing new incentive structures, all with the goal of driving efficiency and accountability. We're also leaning in on simplifying our pricing and packaging strategy, recently began rolling out new product bundles, enable customers to more easily access useful and differentiated productivity features, which in turn further the customer ROI and improve retention, and then bring the customer a richer experience. We know that customers who use more than three features are more likely to expand their footprint with us. That'll be critical for more profitable growth at scale. We already have an industry-leading partner ecosystem This represents a significant opportunity to expand customer value and distribution reach through our network of ISVs, resellers, system integrators, and developers. By reimagining how we engage that ecosystem, we expect to create a platform that will see stronger revenue contribution from our partners and help unlock and fuel international expansion opportunities in particular. I personally visited customers and teams in four of our key European markets last week. which reaffirmed that one of our most significant growth opportunities will come from international markets. During the trip, I had the pleasure to meet with one of the world's leading communications carriers. They've been a customer for seven years now. Our comp team identified key areas to drive growth with expanded use cases, which accelerated adoption, which in turn led to an early renewal expansion. We're excited to grow our footprint in their ecosystem as they continue to leverage our products to digitize their customer experience and reduce operating expenses while helping to create a more sustainable future. Lastly, internally, our operational focus has been on streamlining our processes, upgrading our internal systems, and modernizing more of our own workflows to improve efficiency and scalability. As an example, we just closed our first quarter on our new ERP system, which has been a key dependency for automating more of our operations. In summary, I believe we're acting with urgency to recalibrate the business and leverage our strong foundation to adapt to the evolving business landscape and the changing and challenging macro environment. These efforts will take time, and they represent a continued evolution for DocuSign. However, I am fully confident that the opportunity is here for DocuSign, and it's within our reach with a clear strategy, focus, and execution. Thank you for your time today. I'm thrilled to be leading DocuSign, and I'm committed to being transparent with all of you about our progress as we move forward. Now, I'll hand it over to Cynthia, who will take you through our Q3 financial results and outlook. Cynthia.