DocuSign, Inc.

Good afternoon, ladies and gentlemen. Thank you for joining JocuSign's second quarter fiscal year 24 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, Head of Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon and welcome to DocuSign's Q2 Fiscal Year 2024 Earnings Call. I'm Heather Harwood, DocuSign's Head of Investor Relations. Joining me on today's call are DocuSign's CEO, Alan Teegerson, and our CFO, Blake Grayson. The press release announcing our second quarter fiscal year 2024 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.docuscience.com. I'd now like to turn the call over to Alan. Alan?

Thanks, Heather, and good afternoon, everyone. We closed out the first half of the year strong by delivering solid second quarter financial results. We continue to drive momentum in our business by making progress against our key initiatives and delivering enhancements to our product portfolio. Exiting the quarter, I feel energized having recently come off our momentum events where we visited eight cities spanning five continents. We met with thousands of partners and customers who were excited to hear about our dual track plans to improve agreement workflows. In the near term, we're focused on the agreement management layer. We're taking something that's quite complex for our customers and making it easier and more delightful. And over time, we're building the intelligence layer that will unlock agreement data. We presented our future vision, publicly shared our product roadmap, and received tremendous validation after showcasing product demonstrations aligned to these two priorities over the quarter. Let me share some highlights from this quarter's financial results. Q2 total revenue came in at $688 million, up 11% versus prior year, and Q2 non-GAAP operating margin came in at 25%. While we are pleased with our results, like many others, we're seeing continued macro pressures tempering expansion rates. However, we remain focused on what we can control, executing against our initiatives to drive innovation and operational efficiency, further setting the foundation for growth while navigating an uncertain environment. Now, I want to highlight our pace of innovation driven by our delivery of new features and products. The progress we're making demonstrates how we're expanding upon our leadership in eSignature. As I said, we're thinking about our roadmap on two horizons. In the short term, we're looking to ship new features and functionality that differentiate DocuSign and streamline agreement workflows, bringing in new customers, and continuing to deliver value to existing customers. To that end, we continue to expand our identity verification portfolio, announcing the global launch of line misdetection for ID verification. Liveness detection technology leverages AI-powered biometric checks to prevent identity spoofing, which results in more accurate verification without the signee being present. ID verification is already helping our customers. Our data shows that it has reduced time to sign by about 60%. Later this year, we expect to expand our functionality with a wallet feature that will enable frequent users to save their profile, driving improved efficiency and convenience. These add-ons will be available for all of our plans, including our standard plan, representing an important differentiator for DocuSign's product offering for all customer types. As I've stated in the past, the value of an agreement is in the data, and every step of the workflow will benefit when it's automated, intelligent, and seamlessly integrated into core business systems. Webforms is delivering on that vision. During the quarter, we shipped and announced more and increasingly sophisticated capabilities to our web forms offering. In July, web forms became available on DocuSign's FedRAMP, a moderate environment which unlocks new possibilities for our federal, state, and local government customers to digitize their forms. We will also soon ship advanced reporting capabilities, enabling users to unlock data from their agreements to uncover actionable insights and drive data-driven decisions. This quarter, we also announced that DocuSign Monitor is now available to our CLM customers. Monitor provides a comprehensive and holistic multi-product view of user activity on one dashboard for both CLM and eSignature, ensuring organizations can quickly and easily detect, investigate, and respond to suspicious activity before incidents occur. For our customers, it's a powerful reassurance. Losing even one high-value agreement can have a significant business impact. We are seeing large marquee organizations across industries, including tech and finance, select DocuSign CLM to transform how they automate their end-to-end agreement processes across their entire enterprise. As an example, we closed one of our largest CLM deals ever this quarter. This customer, which is a leading residential solar company, turned to our CLM solution to help automate over 1,200 of their agreement templates. Leveraging our document generation and workflow management capabilities, CLM helps them automate the agreement process across teams, adding simplicity and security. While CLM today represents a small contribution to our overall business, we saw solid year-on-year growth, which is a reflection of our leading market position. We are encouraged by the wins, and we have just begun to tap into the potential for this market. More broadly, we continue to make meaningful progress towards our vision of smart agreements. Before we discuss our final update, it's worth grounding this portion with a reminder of what's generally true in the market. Individual solutions work, but customers suffer when putting together solutions combining different product categories like CLM, e-signature, workflow management, document storage, and so on. Today, only the largest enterprises with resources and IT sophistication and link these solutions together and only at significant expense. This depresses the overall consumption and size of market. We are on a multi-quarter path to evolve our offerings towards a platform capable of coordinating broader processes at a fraction of current complexity. Our goal is to unlock the market for intelligent agreement management for millions of businesses, automating billions of hours of manual work, and improving business outcomes. Today, we're already monetizing AI directly through our CLM Plus product and indirectly through its use in our products, such as Search. Our next step on that journey is with AI Labs. With AI Labs, we are co-innovating with our customers. We provide a sandbox where customers can share a select subset of agreements, try new features we're testing. Our customers get early access to developing technology and we receive early feedback that we will incorporate into our products. By working with our customers in the development phase, we're further reinforcing the trusted position we've earned over the last 20 years. Next, let me provide an update on the progress we're making with our go-to-market capabilities, balancing scale with efficiency. As we evolve how DocuSign goes to market, integrating our digital direct and partner selling motions to leverage an omnichannel approach. I'd like to provide an update on the progress we're making in our self-serve product-led growth channel. The PLG and self-serve capabilities are one of our most important areas of investment. In addition to our continued focus on delivering against our product roadmap, we're improving our customer experience by making DocuSign products much easier to try and buy. With such a diversified customer base, it's critical that we deliver delightful self-service experiences not just for growth, but also for scale and efficiency. We made good traction over the quarter, noting higher traffic conversion rates of new customers on our website. We've also unlocked expansion opportunities for customers directly within their product experience, resulting in relative strength through our digital channel. We expanded relationships within our partner ecosystem, which is an important part of our omnichannel approach to drive reach and scale. In Q2, we launched pay-as-you-go offering for ISV partners. It enables ISVs to embed DocuSign e-signature in their agreement workflows on a consumption basis. Over the course of the next few months, we will have been featured partners in some of the most important technical conferences, most notably at Google Next, Dreamforce, Deutsche Telekom's Digital X, and Microsoft Ignite. One of the key pillars of our omni-channel is strengthening our direct sales productivity. This was the second consecutive quarter of a higher than anticipated rate of on-time renewals, which is a positive sign of increasing go-to-market execution. It's contributed favorably to our billing's outperformance for the quarter, which Blake will touch on in the financial update. In our international business, expansion remains the largest part of our addressable market, and we are making progress. This past quarter, one of Australia's largest banks expanded their relationship with us, Customers since 2020, they use our solutions to streamline both internal and customer-facing business processes in an effort to remove friction, reduce cost, and deliver better experiences. The upside potential in our international business is large. And as I had commented on previously, we met with hundreds of our international customers through DocuSign's momentum events. The excitement about our product roadmap was contagious, and we look forward to growing our presence globally. We are shaping the future of the agreement category and building on our global scale and trusted market position. The future of agreements is not about attaching yourself to a legacy document format. As we continue our product evolution by adding intelligence and unlocking the data trapped in agreements, we're increasing productivity, reducing friction, and saving our customers time. This is a fundamental shift in the agreement space. I'm confident in our competitive advantage as DocuSign is the largest player focused solely on improving the agreement process. Moreover, there's no other company focused on the full end-to-end agreement process for companies of every size, from S&Bs up to the world's largest enterprises. In closing, I want to thank DocuSign's employees worldwide for their collective power in driving our success. I'm proud of the tremendous job the team has done navigating the dynamic environment. I'd now like to welcome Blake Grayson, who, as you know, joined us in mid-June as our CFO. Blake has proven to be a valuable addition to our team, and I look forward to our continued partnership. Let me turn it over to Blake to review our financial performance.