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What changed in DOCUSIGN, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of DOCUSIGN, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+380 added−361 removedSource: 10-K (2024-03-21) vs 10-K (2023-03-27)

Top changes in DOCUSIGN, INC.'s 2024 10-K

380 paragraphs added · 361 removed · 299 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

68 edited+25 added−10 removed33 unchanged
Biggest changeWe offer multiple editions of CLM, each tailored to meet the needs of customers with different organizational sizes and contracting complexity. • Gen for Salesforce allows sales representatives to automatically generate polished, customizable agreements with a few clicks from within Salesforce, and is optimized for small to mid-sized businesses who value a simplified solution that is easy to install and maintain. • Identify is a family of enhanced signer-identification options, such as for checking government-issued IDs. • Standards-Based Signatures support electronic signatures that utilize digital certificates, including those specified in the EU’s eIDAS regulations for advanced and qualified electronic signatures (also known as digital signatures). • Monitor uses advanced analytics to track DocuSign eSignature web, mobile and API account activity across the customer’s organization to provide near real-time visibility and strengthen security.
Biggest changeIt allows customers to build and maintain templates to generate custom, accurate and professional-looking agreements quickly by using a centralized template hub, an intuitive template builder, and dynamic merge fields and tables. • Identify is a family of enhanced signer-identification options, such as for checking government-issued IDs. • Standards-Based Signatures (“SBS”) support electronic signatures that utilize digital certificates, including those specified in the EU’s eIDAS regulations for advanced and qualified electronic signatures (also known as digital signatures). • Monitor uses advanced analytics to track DocuSign eSignature web, mobile and API account activity across the customer’s organization to provide near real-time visibility and strengthen security. • Notary combines our eSignature and ID verification tools to enable notaries public to conduct remote online notarization (“RON”) transactions.
We intend to invest further in collaborating with these partners, especially those that are creating DocuSign specific practices. ▪ Independent Software Vendors (“ISVs”) : We partner with a host of leading ISVs—including our strategic partners above as well as vertical oriented partners to help bring the power of DocuSign to customers around the world. ▪ Distributors and resellers : As part of our evolving go-to-market strategy, we have distribution partnerships with global industry leaders like Ingram Micro and AppDirect, enabling us to reach tens of thousands of resellers.
We intend to invest further in collaborating with these partners, especially those that are creating DocuSign specific practices. ▪ Independent Software Vendors (“ISVs”) : We partner with a host of leading ISVs—including our strategic partners above as well as vertical oriented partners to help bring the power of DocuSign to customers around the world. ▪ Distributors and resellers : As part of our evolving go-to-market strategy, we have distribution partnerships with global industry leaders like Ingram Micro enabling us to reach tens of thousands of resellers.
Additionally, we match funds given by our employees to qualifying non-profits. Our Competition Our primary global competitor for DocuSign eSignature is currently Adobe, which offers an electronic signature solution known as Adobe Acrobat Sign as well as other global software companies that have or may elect to include an electronic signature capability in their products.
Additionally, we match funds given by our employees to qualifying non-profits. Our Competition Our primary global competitor for eSignature is currently Adobe, which offers an electronic signature solution known as Adobe Acrobat Sign as well as other global software companies that have or may elect to include an electronic signature capability in their products.
We also believe the ability for prospects to easily try DocuSign eSignature from our website or when interacting with our product creates awareness that extends beyond the acquisition of new VSB customers. Customer Success & Customer Support We believe that our Customer Success and Customer Support efforts are critical to retaining and expanding our customer base.
We also believe the ability for prospects to easily try eSignature from our website or when interacting with our product creates awareness that extends beyond the acquisition of new VSB customers. Customer Success & Customer Support We believe that our Customer Success and Customer Support efforts are critical to retaining and expanding our customer base.
With DocuSign eSignature, every signed document is backed by a unique, auditable Certificate of Completion, automatically capturing key signing details to help authenticate the document. It includes party names, email addresses, public IP addresses, and a time-stamped record of individuals’ interactions with the document.
With eSignature, every signed document is backed by a unique, auditable Certificate of Completion, automatically capturing key signing details to help authenticate the document. It includes party names, email addresses, public IP addresses, and a time-stamped record of individuals’ interactions with the document.
These developers help expand DocuSign functionality to other systems, thus driving greater usage of our offerings. We intend to continue investing in our APIs and other forms of support to further drive this virtuous cycle of value creation between developers and DocuSign.
These developers help expand DocuSign functionality to other systems, thus driving greater usage of our platform and offerings. We intend to continue investing in our APIs and other forms of support to further drive this virtuous cycle of value creation between developers and DocuSign.
Food and Drug Administration’s 21 CFR Part 11 regulations. Different pricing structures apply to different DocuSign products. For example, for DocuSign eSignature, we price our subscriptions based on the functionality required by our customers and the quantity of Envelopes provisioned.
Food and Drug Administration’s 21 CFR Part 11 regulations. Different pricing structures apply to different products. For example, we price our eSignature subscriptions based on the functionality required by our customers and the quantity of Envelopes provisioned.
Diversity and Inclusion We believe that having diverse teams working in an inclusive environment will help us achieve better business results — across product innovation, customer experience and employee success.
Diversity, Equity and Inclusion We believe that having diverse teams working in an inclusive environment will help us achieve better business results — across product innovation, customer experience and employee success.
Our strategy aims to expand beyond the initial DocuSign eSignature use case to facilitate digital transformation across agreement workflows. At every step of this process, we also see an opportunity to expand across the organization—for example, going from sales into services, human resources, finance, and other functions—thereby increasing the overall number of agreement processes that are automated.
Our strategy aims to expand beyond the initial eSignature use case to facilitate digital transformation across agreement workflows. At every step of this process, we also see an opportunity to expand across the organization—for example, going from sales into services, human resources, finance, and other functions—thereby increasing the overall number of agreement workflows that are automated.
Our industry-specific DocuSign offerings include: • Rooms for Real Estate provides a way for brokers and agents to manage the entire real estate transaction digitally.
Our industry-specific DocuSign offerings include: • Real Estate: Rooms for Real Estate provides a way for real estate brokers, agents and customers to manage the entire real estate transaction digitally.
In addition, the use of our products is associated with decreased paper use for our customers and we specifically donate to forest-protection and other environmental impact causes. Since we launched DocuSign for Forests in 2019, we have donated over $2.6 million to date to organizations doing critical work to preserve the world’s forests.
In addition, the use of our products is associated with decreased paper use for our customers and we specifically donate to forest-protection and other environmental impact causes. Since we launched DocuSign for Forests in 2019, we have donated over $2.8 million to date to organizations doing critical work to preserve the world’s forests.
It enables the creation and editing of documents; custom approval processes and workflows for sharing and signing those documents; integration with zipForm and other providers to simplify the completion of paperless forms; and an API to ensure easy connection with Customer Relationship Management (“CRM”) systems, accounting software and other real estate related systems.
It enables the creation and editing of documents; custom approval processes and workflows for sharing and signing those documents; integration with zipForm and other providers to simplify the completion of paperless forms; and an API to ensure easy connection with Customer Relationship Management (“CRM”) systems, accounting software and other real estate related systems. • U.S.
We use our website, including our investor relations website at investor.docusign.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. DocuSign, Inc.| 2023 Form 10-K | 12
We use our website, including our investor relations website at investor.docusign.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. DocuSign, Inc.| 2024 Form 10-K | 12
These include broader digital demand generation campaigns; corporate communications and analyst relations; first-party events, such as DocuSign City Tours, our annual set of roadshows gathering customers, prospects, developers and partners; participation in third-party events, such as Salesforce’s Dreamforce; comprehensive customer evidence and advocacy programs; developer relations programs; cooperative marketing with strategic partners; and a comprehensive webinar series, among many other things.
These include broader digital demand generation campaigns; corporate communications and analyst relations; first-party events, such as our annual set of roadshows gathering customers, prospects, developers and partners; participation in third-party events, such as Salesforce’s Dreamforce; comprehensive customer evidence and advocacy programs; developer relations programs; cooperative marketing with strategic partners; and a comprehensive webinar series, among many other things.
With over 200,000 developer sandboxes created to enable product development and testing in isolated environments, and the majority of transactions on our DocuSign eSignature platform processed via our APIs today, we believe we have a strong developer community. Our easy-to-use and robust APIs allow developers to extend and integrate DocuSign products into their own applications.
With over 400,000 developer sandboxes created to enable product development and testing in isolated environments, and the majority of transactions on eSignature processed via our APIs today, we believe we have a strong developer community. Our easy-to-use and robust APIs allow developers to extend and integrate DocuSign products into their own applications.
Our Customers As of January 31, 2023, we had over 1.3 million paying customers globally, serving the needs of some of the largest enterprises and governmental organizations down to sole proprietors and individual end users. No single customer accounted for more than 10% of our revenues in fiscal 2023.
Our Customers As of January 31, 2024, we had over 1.5 million paying customers globally, serving the needs of some of the largest enterprises and governmental organizations down to sole proprietors and individual end users. No single customer accounted for more than 10% of our revenues in fiscal 2024.
We offer multiple editions and add-ons that can be combined to fit the needs of different organizational sizes, industries and regions. • CLM (“Contract Lifecycle Management”) orchestrates workflows across the entire agreement process.
We offer multiple editions and add-ons that can be combined to fit the needs of different organizational sizes, industries and regions. • CLM orchestrates workflows across the entire agreement process.
We believe the principal factors that drive competition between vendors in the future will include: • breadth and depth of innovative product functionality (including proprietary product differentiators); • breadth and depth of integrations with the applications and systems customers already use; • availability and reliability; • security; • ease of use and deployment; • brand awareness and reputation; • unit costs and total cost of ownership; • level of customer satisfaction; and • ability to address legal, regulatory and cultural matters associated with e-signature across jurisdictions.
We believe the principal factors that drive competition between vendors in the future will include: • breadth and depth of innovative product functionality (including proprietary product differentiators); • breadth and depth of integrations with the applications and systems customers already use; • availability and reliability; • security; • ease of use and deployment; DocuSign, Inc.| 2024 Form 10-K | 11 • brand awareness and reputation; • unit costs and total cost of ownership; • level of customer satisfaction; and • ability to address legal, regulatory, and cultural matters associated with e-signature across jurisdictions.
Once customers are onboarded, Customer Success continues to guide DocuSign, Inc.| 2023 Form 10-K | 9 them through their DocuSign journeys using motions such as health checks, account planning and renewal management. Customer Support also plays an important role in helping our customers by being available via telephone, email or the web to help answer general and technical questions.
Once customers are onboarded, Customer Success continues to guide them through their DocuSign journeys using motions such as health checks, account planning and renewal management. Customer Support also plays an important role in helping our customers by being available via telephone, email or the web to help answer general and technical questions.
We believe there is a substantial opportunity for us to increase our international customer base by leveraging and expanding investments in our technology, direct sales force and strategic partnerships around the world, as well as helping existing U.S.-based customers manage agreements across their international businesses. • Invest in innovation and expansion of our DocuSign products.
We believe there is a substantial opportunity for us to increase our international customer base by leveraging and expanding investments in our technology, direct sales force and strategic partnerships around the world, as well as helping existing U.S.-based customers manage agreements across their international businesses.
For example, as of March 2023 our DocuSign eSignature app had more than 636,000 ratings with an average score of 4.9 out of 5 stars on Apple's App Store. • Developer-friendly. Our extensive application programming interfaces (“APIs”) enable DocuSign products to be quickly embedded into or connected with an organization’s own apps, systems and processes.
For example, as of January 2024, our eSignature app had more than 700,000 ratings with an average score of 4.9 out of 5 stars on Apple's App Store. • Developer-friendly. Our extensive application programming interfaces (“APIs”) enable our products to be quickly embedded into or connected with an organization’s own apps, systems and processes.
DocuSign, Inc.| 2023 Form 10-K | 8 Sales Our go-to-market model involves a combination of direct sales, partner-assisted sales and digital self-service purchasing: Direct Sales: We sell subscriptions primarily through our direct sales force across our field offices around the world. Our account executives and account managers focus on new and existing enterprise and commercial customers.
Sales Our go-to-market model involves a combination of direct sales, partner-assisted sales, and digital self-service purchasing: Direct Sales: We sell subscriptions primarily through our direct sales force across our field offices around the world. Our account executives and account managers focus on new and existing enterprise and commercial customers.
We help organizations connect and automate agreement processes with our industry leading product offerings that span the entire agreement lifecycle to enhance the customer experience while enabling the digital transformation of agreements. In addition to what we do, we believe we are differentiated by how we do it: • Stringent security standards.
We help organizations connect and automate agreement workflows with our industry leading product offerings that span the entire agreement lifecycle to enhance the customer experience while enabling the digital transformation of agreements. In addition to what we do, we believe we are differentiated by how we do it: • Simple to use.
Partner-assisted Sales : ▪ Global partners : We have partnerships with some of the world’s foremost technology providers including Google, Microsoft, Oracle, Salesforce, SAP and ServiceNow—that help us sell into a far greater number of accounts than we could do alone.
DocuSign, Inc.| 2024 Form 10-K | 8 Partner-assisted Sales : ▪ Global partners : We have partnerships with some of the world’s foremost technology providers including Google, Microsoft, Oracle, Salesforce, SAP, and ServiceNow—that help us sell into a far greater number of accounts than we could do alone.
In addition to developing patents based on our own R&D efforts, we may purchase or license patents from third parties. DocuSign, Inc.| 2023 Form 10-K | 11 The software that we embed within our products, as well as software that we distribute, also is entitled to copyright and other IP protection.
In addition to developing patents based on our own R&D efforts, we may purchase or license patents from third parties. The software that we embed within our products, as well as software that we distribute, also is entitled to copyright and other IP protection.
For a number of use cases, such as buying a home, multiple Envelopes could be used. Our Technology, Infrastructure and Operations Our technology and product efforts are focused on improving and enhancing the features, functionality, performance, availability and security of our product offerings.
For a number of use cases, such as buying a home, multiple Envelopes could be used. DocuSign, Inc.| 2024 Form 10-K | 7 Our Technology, Infrastructure and Operations Our technology and product efforts are focused on improving and enhancing the features, functionality, performance, availability and security of our product offerings.
We focus on innovation in global security and privacy management, high availability, enterprise-class manageability, extensible identity proofing, digital transaction processing and integration into companies' systems and processes. This infrastructure supports over 1.3 million DocuSign eSignature customers, including some of the world’s largest companies, and underpins our product offerings.
We focus on innovation in global security and privacy management, high availability, enterprise-class manageability, extensible identity proofing, digital transaction processing and integration into companies' systems and workflows. This infrastructure supports over one billion people and 1.5 million customers, including some of the world’s largest companies, and underpins our product offerings.
In the year ended January 31, 2023, we derived 25% of our revenue from customers outside the U.S.
In the year ended January 31, 2024, we derived 26% of our revenue from customers outside the U.S.
Engagement with our Communities DocuSign is dedicated to corporate responsibility and putting our values into action. We believe that this engagement with our communities is an important aspect of our company culture and brings long-term value to our stockholders, while making the world a better place.
We believe that this engagement with our communities is an important aspect of our company culture and brings long-term value to our stockholders, while making the world a better place.
We offer applications for automating pre- and post-signature processes, including automatically generating an agreement from data in other systems, supporting negotiation workflow, verifying identities, enabling remote online notarization, collecting payment after signatures, and using artificial intelligence (“AI”) to analyze a collection of agreements for risks and opportunities.
This includes automatically generating an agreement from data in other systems, supporting negotiation workflows, verifying identities, enabling remote online notarization, collecting payment after signatures, and using artificial intelligence (“AI”) to analyze a collection of agreements for risks and opportunities.
Our largest and most advanced customers have hundreds of use cases deployed, but the vast majority of our customers have only deployed a few use cases. Thus, we believe there is strong potential to expand within our existing customer base. • Accelerate international expansion.
Our largest and most advanced customers have hundreds of use cases deployed, but the vast majority of our customers have only deployed a few use cases. Thus, we believe there is strong potential to expand within our existing customer base. • Drive new eSignature and CLM customer acquisition. We offer the world’s leading electronic signature product and CLM software.
Finally, fewer manual interactions during an agreement’s lifecycle means fewer opportunities for mishandling or improper access. • Minimized environmental impact. Environmental sustainability has been an important part of the DocuSign story since its inception. DocuSign eSignature not only reduces the use of paper, but also significant amounts of the waste, water, carbon, and wood required to make that paper.
Environmental sustainability has been an important part of the DocuSign story since its inception. eSignature not only reduces the use of paper, but also significant amounts of the waste, water, carbon, and wood required to make that paper.
By replacing manual, paper-driven processes with automated digital workflows, DocuSign can substantially reduce the time and labor necessary to complete agreements. In fiscal 2023, 78% of all transactions using DocuSign eSignature were completed in less than 24 hours and 43% within 15 minutes.
We believe customers benefit from working with us in many ways, including: • Doing business faster. By replacing manual, paper-driven processes with automated digital workflows, DocuSign can substantially reduce the time and labor necessary to complete agreements. In fiscal 2024, 76% of all transactions using eSignature were completed in less than 24 hours and 41% within 15 minutes.
Both Customer Success and Customer Support offer in-depth expertise, proven best practices, and repeatable delivery methodologies designed to enhance our customers’ overall DocuSign experience and ensure they achieve successful outcomes using our products. Human Capital Management At DocuSign, our values are reflected in six pillars: Trust, Customer Focus, Simplicity, Innovation, Unity, and Sustainability.
Both Customer Success and Customer Support offer in-depth expertise, proven best practices, and repeatable delivery methodologies designed to enhance our customers’ overall DocuSign experience and ensure they achieve successful outcomes using our products.
In some cases, these may be variants of a product like DocuSign eSignature, such as our DocuSign eSignature Life Sciences Modules for assisting with compliance with U.S. Food and Drug Administration regulations.
In some cases, these may be variants of a product like eSignature, such as our eSignature Life Sciences Modules for assisting with compliance with U.S. Food and Drug Administration regulations. In other cases, it may be a distinct product for an industry, such as Rooms for Real Estate, which includes task management, templates, and workflow for real estate transactions.
The key pillars to our diversity and inclusion strategy include: • Pipeline : We seek to increase the diversity of individual candidates applying to help us develop our products and our business. • Candidate Experience : We have developed specialized interview training in which employees learn how to interrupt bias and understand the importance of building diverse candidate slates and interviewer panels. • Education : Through management training, speaker series and online learning, we are actively raising awareness, cultivating an inclusive culture and building practical skills for mitigating bias. • Community : DocuSign’s Employee Resource Groups (“ERGs”) serve as culture carriers and provide employees a way for colleagues to connect, network and build cross team collaboration.
In September 2023, we launched our first internal DEI and Experience report, which highlighted our three-pronged approach to DEI (A.I.M. - Act, Include, Mobilize), workforce and workplace milestones towards progress-representation and workplace inclusion, areas of continued focus, review of external partnerships and internal programs, spotlight our Employee Resource Groups (“ERGs”) and share what is next in our journey towards an inclusive and diverse DocuSign that fosters equitable experiences for all. • Pipeline : We seek to increase the diversity of individual candidates applying to help us develop our products and our business. • Candidate Experience : We have developed specialized interview training in which employees learn how to interrupt bias and understand the importance of building diverse candidate slates and interviewer panels. • Education : Through management training, speaker series, and online learning, we are actively raising awareness, cultivating an inclusive culture, and building practical skills for mitigating bias. • Community : DocuSign’s ERGs serve as culture carriers and provide employees a way for colleagues to connect, network and build cross team collaboration.
Our company operates co-location data centers in several locations and we also leverage public cloud infrastructure in certain select international locations as well as an increasing number of supporting services. Companies can also integrate DocuSign into their systems and processes using one of more than 400 pre-built connectors or custom integrations using our API.
Our company operates co-location data centers in several locations and we also leverage public cloud infrastructure for an increasing number of services. Companies can also integrate DocuSign into their systems and workflows using one of more than 900 active partner integrations.
Key DocuSign products include: • DocuSign eSignature , our anchor product, enables sending and signing of agreements on a wide variety of devices, from virtually anywhere in the world, securely.
We focus on meeting customer needs by providing them a variety of products and solutions to address their needs. Some key products include: • eSignature , our anchor product, enables sending and signing of agreements on a wide variety of devices, from virtually anywhere in the world, securely.
In addition, our mission is to redefine how the world comes together and agrees. We are committed to delivering against these values for our employees, customers and the communities in which we live and work. We have several initiatives and strategies in place that reflect this commitment to our core values and to our employees.
We are committed to delivering against these values for our employees, customers and the communities in which we live and work. We have several initiatives and strategies in place that reflect this commitment to our core values and to our employees. We are a global organization with an increasingly international footprint.
We believe that DocuSign has an important role in creating a low-carbon, sustainable future and our products can help our customers incorporate sustainability into their business operations. Our Growth Strategy We intend to drive the growth of our business by executing on the following strategies: • Drive new DocuSign eSignature customer acquisition.
We believe that DocuSign has an important role in creating a low-carbon, sustainable future and our products can help our customers incorporate sustainability into their business operations.
ITEM 1. BUSINESS Overview DocuSign is the global leader in the eSignature category. We offer products that address broader agreement workflows and digital transformation, including the world’s leading electronic signature product, enabling agreements to be signed electronically on a wide variety of devices, from virtually anywhere in the world, securely.
ITEM 1. BUSINESS Overview DocuSign offers products that address agreement workflows and digital transformation as part of its agreement management platform, enabling agreements to be signed electronically on a wide variety of devices, from virtually anywhere in the world, securely.
Our Products DocuSign enables businesses to address each aspect of the agreement process with our product offerings, which are tailored for each step in the agreement lifecycle and, in some cases, for particular market segments, industries or geographic regions. We focus on meeting customer needs by providing them a variety of products, features and functionality across our portfolio.
DocuSign, Inc.| 2024 Form 10-K | 6 Our Products DocuSign enables businesses to address each aspect of the agreement process with our product offerings, which are tailored for each step in the agreement lifecycle and, in some cases, for particular market segments, industries or geographic regions.
We believe our systems and processes meet and, in certain cases, exceed industry practices for data protection, transmission and secure storage including being certified for the globally recognized security standard, ISO 27001, among many other key privacy and security certifications. • Highly available.
Our systems and processes for data protection, transmission and secure storage are certified for the globally recognized security standard, ISO 27001, among many other key privacy and security certifications. • Scaled infrastructure.
As we expand our self-service capabilities, we intend to create a frictionless experience to allow customers to engage the way they prefer, enabling them to buy and manage their DocuSign relationship in a low-touch way.
We have created a frictionless digital onboarding experience to allow customers to engage the way they prefer, enabling them to buy and manage their DocuSign relationship in a low-touch way. Our goal is to enable a seamless and world class self-service experience. • Accelerate international expansion.
Our main infrastructure is powered by near real-time data synchronization across a ring of four geo-dispersed data centers in the United States (“U.S.”), and a similar ring of data centers in the European Union (“EU”).
Our main infrastructure is powered by near real-time data synchronization across a ring of four geo-dispersed data centers in the United States (“U.S.”), and a similar ring of data centers in the EU. This infrastructure has enabled us to deliver over 99.9% availability to our eSignature customers and users worldwide over the past 12 months.
We seek to meet the industry’s most rigorous security certification standards and use the strongest data encryption technologies that are commercially available.
This level of evidence and auditability exceeds what is possible with traditional ink-on-paper signatures. • Stringent security standards. We seek to meet the industry’s most rigorous security certification standards and use the strongest data encryption technologies that are commercially available.
Our digital self-service channel provides a cost-effective way to serve customers of all sizes, and an option for serving customers of all sizes. We offer subscriptions to our products, which include editions with varying functionality for different customers’ needs, as well as products and features specific to particular geographies or industries. We also focus on customer adoption, success and expansion.
We offer subscriptions to our products, which include editions with varying functionality for different customers’ needs, as well as products and features specific to particular geographies or industries. We also focus on customer adoption, success and expansion. This helps us deliver continued value and creates opportunities for increased usage.
Our flagship eSignature product is designed as an always-on, geographically redundant and distributed cloud solution that runs in SSAE 18 audited data centers in the U.S. and EU.
Our flagship eSignature product is designed as an always-on, geographically redundant and distributed cloud solution that runs in SSAE 18 audited data centers in the U.S. and EU. Recognizing that our customers often depend on DocuSign for their day-to-day operations, we have provided best-in-class availability, with over 99.9% eSignature availability to our customers and users over the past 12 months.
None of our employees is represented by a labor union with respect to his or her employment with us. We have not experienced any work stoppages and we consider our relations with our employees to be positive. Talent and Career Development We are a global and inclusive organization with an increasingly international footprint.
We had approximately 67% of our employees based in the U.S. and the remainder in international locations. None of our employees is represented by a labor union with respect to his or her employment with us. We have not experienced any work stoppages.
Our goal is to enable a seamless and world class self-service experience. • Expand our install base through new use cases and adoption of additional products, features and functionality. A company’s first exposure to DocuSign is often through the use of eSignature in accelerating the execution of DocuSign, Inc.| 2023 Form 10-K | 6 agreements.
Finally, we have acquired and may continue to acquire additional capabilities and make investments in key technologies. • Expand our install base through new use cases and adoption of additional products, features and functionality. A company’s first exposure to DocuSign is often through the use of eSignature in accelerating the execution of agreements.
Using DocuSign, organizations can centralize, standardize, and automate agreement processes—so employees have an easy way to use approved processes and templates, with audit trails generated automatically. Also, AI technologies can help employees identify risks within large sets of existing agreements that would otherwise be impractical for manual review.
Organizations that rely on manual, paper-based agreement processes may be prone to error and difficult to audit. Using DocuSign, organizations can centralize, standardize, and automate agreement workflows—so employees have an easy way to use approved processes and templates, with audit trails generated automatically.
Within a given organization, our technology can also be used broadly across business functions: generating contracts for sales, signing employment offers for human resources, and analyzing commercial agreements for legal, among many others. This broad potential applicability drives the total addressable market for DocuSign to approximately $50 billion according to our estimates.
Within a given organization, our technology is adopted across many business functions and for many use cases including: generating contracts for sales, signing employment offers for human resources, and analyzing commercial agreements for legal, among many others.
Organizations that use DocuSign services internally and externally can deliver a simpler, more streamlined experience for their own customers and employees. For example, DocuSign eSignature replaces the hassle and costs of faxing, printing, scanning, emailing, and other manual activities with a few clicks or taps—which can be done from practically anywhere, at any time.
For example, eSignature replaces the hassle and costs of faxing, printing, scanning, emailing, and other manual activities with a few clicks or taps—which can be done from practically anywhere, at any time. Our Contract Lifecycle Management (“CLM”) software consolidates and automates every step of the agreement process from generation through negotiation, signature, ongoing management and storage. • Reduced risk.
In other cases, it may be a distinct product for an industry, such as Rooms for Real Estate, which includes task management, templates, and workflow for real estate transactions. Finally, it may include a combination of additional capabilities and authorizations such as FedRAMP Moderate, which enables us to support various use cases within federal government agencies. • Globally adopted.
Finally, it may include a combination of additional capabilities and authorizations such as FedRAMP Moderate, which enables us to support various use cases within federal government agencies. • Globally adopted. Our expertise in electronic signature and other agreement technologies is truly global. This is key, given that different regions have different laws, standards and cultural norms.
DocuSign, Inc.| 2023 Form 10-K | 7 • DocuSign Federal and DocuSign CLM are Federal Risk and Authorization Management Program (“FedRAMP”)-authorized versions of DocuSign eSignature and CLM commercial products for the U.S. federal government agencies, running within dedicated data centers and system boundaries that offer heightened security in the storage, transmission and encryption of data. • Life Sciences Modules for 21 CFR Part 11 are add-ons for DocuSign eSignature that support compliance with the electronic signature practices established by the U.S.
Federal, State and Local Government customers: For federal civilian agency customers, DocuSign maintains a Federal Risk and Authorization Management Program (“FedRAMP”) Impact Level Moderate environment for eSignature and CLM commercial products, running within dedicated data centers and system boundaries that offer heightened security in the storage, transmission and encryption of data. For U.S.
DocuSign’s product offerings, including DocuSign eSignature, allow organizations to do business faster with less risk and lower costs, while providing better experiences for customers and employees.
DocuSign’s core product offerings, including the world’s leading electronic signature product , allow organizations to do business faster with less risk and at a lower cost, while providing a better experience for customers. DocuSign also offers contract lifecycle management software that automates pre- and post-signature workflows.
Our operations are based on stringent global industry security standards and we maintain compliance with ISO27K, PCI, and SSAE 18 standards. For example, DocuSign’s eSignature and CLM products are FedRAMP-authorized. In addition, we offer a range of options for authenticating users and proving their identities and have a robust digital transaction processing platform that captures signatures and tags.
In addition, we offer a range of options for authenticating users and proving their identities and have a robust digital transaction processing platform that captures signatures and tags. DocuSign is a Trust Service Provider (“TSP”) in the EU.
As of January 31, 2023, over 1.3 million customers and more than a billion users in over 180 countries use the DocuSign platform to accelerate and simplify the process of doing business. Our customers range from the largest global enterprises to sole proprietorships and nonprofits, across virtually all industries globally.
This allows organizations to reduce turnaround times and costs, largely eliminate errors, and deliver a streamlined customer experience. As of January 31, 2024, over 1.5 million customers and more than a billion users in over 180 countries use our products and solutions to accelerate and simplify the process of doing business.
Our other products also contribute to faster turnaround times, such as less time spent creating new agreements or less time spent finding completed agreements. By streamlining workflows, DocuSign enables businesses to save valuable time and resources, resulting in increased productivity and cost savings. • Better customer and employee experience.
Our eSignature product also saves customers time by allowing users to review and sign agreements quickly from mobile devices. Our other products also contribute to faster turnaround times, such as less time spent creating new agreements or less time spent finding completed agreements.
As of January 31, 2023, we had 7,336 employees, of which approximately 68% were in sales, marketing and customer success, 24% in engineering, product development and customer operations and 8% in general and administrative. We had approximately 67% of our employees based in the U.S. and the remainder in international locations.
As we continue to grow in new markets, we anticipate continuing to recruit in new geographies. As of January 31, 2024, we had 6,840 employees, of which approximately 52% were in sales, marketing and customer success, 30% in engineering, product development and customer operations, and 18% in general and administrative.
In the case of DocuSign, Inc.| 2023 Form 10-K | 5 DocuSign eSignature, this has led to the majority of transactions being driven through our APIs today. By integrating with the other systems our customers use to do business—as opposed to simply being a standalone app—we promote greater usage and engagement with our products. • Highly auditable.
Our platform has more than DocuSign, Inc.| 2024 Form 10-K | 4 900 active partner integrations with business systems where work gets done. In the case of eSignature, this has led to the majority of transactions being driven through our APIs today.
We expect to continue investing in research and development to enhance our products, as well as to develop new products that further augment DocuSign’s product offerings. In addition, we expect to continue to use partnerships to offer new integrations and, in some cases, products for resale.
DocuSign, Inc.| 2024 Form 10-K | 5 Our Growth Strategy We intend to drive the growth of our business by executing on the following strategies: • Invest in innovation and expansion of our products. We expect to continue investing in research and development to enhance our offerings, as well as to develop new solutions that further augment DocuSign’s product offerings.
Through our ERG program, employees DocuSign, Inc.| 2023 Form 10-K | 10 are able to participate in personal and professional learning and development and give back to the community through volunteering, donation drives and awareness campaigns. • Transparency : We publish employee diversity information by gender and race/ethnicity on our website to promote accountability and underscore our commitment to diversity.
Through our ERG program, employees are able to participate in external recruitment events to diversify our pipeline, personal and professional learning and development and give back to the community through volunteering, donation drives and awareness campaigns. Engagement with our Communities DocuSign is dedicated to corporate responsibility and putting our values into action.
For example, in Europe, we have offerings tailored for the EU’s electronic Identification, Authentication and Trust Services (”“eIDAS”) regulations, as well as for verifying European eIDs. We believe customers benefit from working with us in many ways, including: • Do business faster.
We assist multiple parties in different jurisdictions to complete agreements and other documents in a legally valid manner. For example, in Europe, we have offerings tailored for the European Union’s (“EU”) electronic Identification, Authentication and Trust Services (“eIDAS”) regulations, as well as for verifying European eIDs. • Highly auditable.
Our value proposition is simple to understand: eliminate the paper, automate processes, and connect to the applications and systems where work gets done. This allows organizations to reduce turnaround times and costs, largely eliminate errors, and deliver a streamlined customer experience.
Our value proposition is simple to understand: eliminate the paper-based processes, automate agreement workflows, and connect to the applications and systems where work gets done. DocuSign has over 900 active partner integrations, so businesses can easily integrate mission-critical business processes with agreement workflows.
This level of evidence and auditability exceeds what is possible with traditional ink-on-paper signatures. • Vertical offerings. We offer enhanced solutions tailored to particular industries, such as financial services, government, life sciences, and real estate.
By integrating with the other systems our customers use to do business—as opposed to simply being a standalone app—we promote greater usage and engagement with our products. • Vertical offerings. We offer enhanced solutions tailored to particular industries, such as financial services, government, life sciences, and real estate.
At DocuSign, we believe in empowering employees so that they can do challenging and meaningful work in an environment where each employee can be heard, exchange ideas openly, learn new skills and build lasting relationships. We offer a number of resources to eligible employees to help engage and develop our employees including career development coursework, frameworks and education assistance.
We value and embrace ideas, encouraging innovation and creativity at every level, while staying true to our mission and core values to drive positive change in everything we do. We offer a number of resources to eligible employees to help engage and develop our employees including career development coursework, frameworks and education assistance.
This infrastructure has enabled us to deliver over 99.9% availability to our DocuSign eSignature customers and users worldwide over the past 12 months. • Simple to use. A key reason for our customer loyalty is our products’ usability. Especially with DocuSign eSignature, we are widely known for our ease of use and customer satisfaction.
A key reason for our customer loyalty is our products’ ease of use. Our eSignature product allows users to send and sign an agreement from practically anywhere to any device, delivering greater efficiency and faster time to value for our customers. We are widely known for our ease of use and customer satisfaction.
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DocuSign has over 400 partner integrations with the world’s most used applications, so agreement processes can integrate with larger business processes and data where work happens. Every agreement has an agreement process: how it is prepared, signed, acted on, and managed. Traditional agreement processes are slow, expensive and error-prone because they involve many manual steps, disconnected systems, and paper signing.
Added
At the core of every business is a series of agreements and every agreement involves a workflow that guides how we create, commit, and manage agreements. However, traditional agreement processes are slow, expensive and error-prone as they involve many manual steps, disconnected systems, and paper signing.
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To address this opportunity, our sales and marketing strategy focuses on businesses at all scales, from global enterprise to local very small businesses (“VSBs”). We rely on our direct sales force and partnerships to sell to enterprises and commercial businesses.
Added
Our customer base is broad and diverse ranging from the largest global enterprises to very small businesses (“VSBs”) and nonprofits, across virtually all industries globally. The world’s leading brands trust DocuSign, including global leaders in energy, industrials, consumer goods, and multiple federal and state government agencies.
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This helps us deliver continued value and creates opportunities for increased usage. The Benefits of Using DocuSign DocuSign leverages our core strengths in eSignature to deliver easier, smarter and trusted agreements.
Added
The global reach and broad applicability of eSignature across business functions, combined with our offering of end-to-end contract lifecycle management applications represents an addressable market of approximately $50 billion, according to our estimates. To capitalize on this opportunity, our sales and marketing strategy focuses on attracting new businesses, as well as expanding our use cases within existing customers.
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Our expertise in electronic signature and other agreement technologies is truly global. This is key, given that different regions have different laws, standards and cultural norms. We assist multiple parties in different jurisdictions to complete agreements and other documents in a legally valid manner.
Added
We rely on our direct sales force and partnerships to sell to enterprises and commercial businesses. We also rely on a digital self-service channel to attract new customers in a more cost-effective manner, in particular those customers in segments or markets that may not be currently or easily serviced by our direct sales or partner efforts.
Removed
DocuSign’s ability to simplify and streamline workflows has contributed to our high net promoter score (“NPS”), as customers appreciate the time and cost savings they experience while using our products. • Reduced risk. Organizations that rely on manual, paper-based agreement processes may be prone to error and difficult to audit.
Added
As a result of our product-led-growth initiatives, we expect the portion of business that comes from our digital self-service channel to continue to increase. The Benefits of Using DocuSign DocuSign leverages our core strength in eSignature to deliver easier, smarter and more trusted agreements.
Removed
We offer the world’s leading e-signature solution, which has successfully streamlined the agreement process for our customers. Despite our success with DocuSign eSignature to date, we believe its market remains largely under-penetrated. • Expand self-serve capabilities. We believe all customers can leverage our products and do business in a more automated way.
Added
By streamlining workflows, DocuSign enables businesses to save valuable time and resources, resulting in increased productivity and cost savings. • Better customer and employee experience. Organizations that use DocuSign services internally and externally can deliver a simpler, more streamlined experience for their own customers and employees.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur ability to increase our revenue also depends on our ability to expand the sales of our products and solutions to, and renew subscriptions with, existing customers and their organizations. Our existing customers, especially our enterprise customers, must increase their use of our products and solutions by purchasing new products, additional subscriptions and our enhanced products and solutions.
Biggest changeOur existing customers, especially our enterprise customers, must increase their use of our products and solutions by purchasing new products, additional subscriptions and our enhanced products and solutions. We may also, from time to time, invest in products and functionalities to diversify our sales and marketing strategy.
Advances in technology and the increasing sophistication of attackers have led to more frequent and effective cyberattacks, including advanced persistent threats by state-sponsored actors, cyberattacks relying on complex social engineering or “phishing” tactics, ransomware attacks and other methods including credential stuffing and account takeover attacks, denial or degradation of service attacks, malicious code (e.g., viruses and worms), ransomware, and many other techniques that may lead to the loss, theft or misuse of personal, corporate or financial information, fraudulent payments and identity theft.
Advances in technology and the increasing sophistication of attackers have led to more frequent and effective cyberattacks, including advanced persistent threats by state-sponsored actors, cyberattacks relying on complex social engineering or “phishing” tactics, ransomware attacks and other methods including credential stuffing and account takeover attacks, denial or degradation of service attacks, malicious code (e.g., viruses and worms), and many other techniques that may lead to the loss, theft or misuse of personal, corporate or financial information, fraudulent payments and identity theft.
If our security measures, or the security measures of our service providers, partners or customers, are compromised, our reputation could be damaged, our ability to attract and retain customers could be adversely affected, we could be subject to negative publicity, increased costs to remedy any problems and otherwise respond to any incident, monetary and other losses for us or our customers, identity theft for our customers, the inability to expand our business, additional scrutiny, restrictions, fines or penalties from regulatory or governmental authorities, loss of customers and customer confidence in our services, ongoing regulatory oversight, assessments and audits, exposure to civil litigation, and/or a breach of our contracts with third parties, all of which could expose us to significant liability and harm our business, financial condition, and operating results.
If our security measures, or the security measures of our partners, service providers, or customers, are compromised, our reputation could be damaged, our ability to attract and retain customers could be adversely affected, we could be subject to negative publicity, increased costs to remedy any problems and otherwise respond to any incident, monetary and other losses for us or our customers, identity theft for our customers, the inability to expand our business, additional scrutiny, restrictions, fines or penalties from regulatory or governmental authorities, loss of customers and customer confidence in our services, ongoing regulatory oversight, assessments and audits, exposure to civil litigation, and/or a breach of our contracts with third parties, all of which could expose us to significant liability and harm our business, financial condition, and operating results.
In the event that our data center arrangements are terminated, or if there are any lapses of service or damage to a data center, we could experience lengthy interruptions in our service as well as delays and additional expenses in arranging new facilities and services.
In the event that our data center and service arrangements are terminated, or if there are any lapses of service or damage to a data center, we could experience lengthy interruptions in our service as well as delays and additional expenses in arranging new facilities and services.
Our current international operations and future initiatives involve a variety of risks, including: ▪ changes in a specific country’s or region’s political or economic conditions, including the pace of the digital transformation of business in that country or region; ▪ the need to adapt and localize our products for specific countries, including providing customer support in different languages; ▪ greater difficulty collecting accounts receivable and longer payment cycles; ▪ potential changes in trade relations arising from U.S. policy initiatives; ▪ unexpected changes in laws and regulatory requirements, including but not limited to, taxes or trade laws; ▪ more stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe; ▪ differing labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to those in the U.S., including deemed hourly wage and overtime regulations in these locations; ▪ challenges inherent in efficiently managing an increased number of employees; ▪ difficulties in managing a business in new markets with diverse cultures, languages, and customs, as well as legal, alternative dispute and regulatory systems; ▪ increased travel, real estate, infrastructure and legal compliance costs associated with international operations; ▪ currency exchange rate fluctuations; ▪ limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; ▪ laws and business practices favoring local competitors or general preferences for local vendors; ▪ limited or insufficient intellectual property protection or difficulties enforcing our intellectual property; ▪ regional or global conflicts, including sanctions or other laws and regulations prohibiting or limiting operations in certain jurisdictions; DocuSign, Inc.| 2023 Form 10-K | 25 ▪ political instability or terrorist activities; ▪ exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S.
Our current international operations and future initiatives involve a variety of risks, including: ▪ changes in a specific country’s or region’s political or economic conditions, including the pace of the digital transformation of business in that country or region; ▪ the need to adapt and localize our products for specific countries, including providing customer support in different languages; ▪ greater difficulty collecting accounts receivable and longer payment cycles; ▪ potential changes in trade relations arising from U.S. policy initiatives; ▪ unexpected changes in laws and regulatory requirements, including but not limited to, taxes or trade laws; DocuSign, Inc.| 2024 Form 10-K | 25 ▪ more stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe; ▪ differing labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to those in the U.S., including deemed hourly wage and overtime regulations in these locations; ▪ challenges inherent in efficiently managing an increased number of employees; ▪ difficulties in managing a business in new markets with diverse cultures, languages, and customs, as well as legal, alternative dispute and regulatory systems; ▪ increased travel, real estate, infrastructure and legal compliance costs associated with international operations; ▪ currency exchange rate fluctuations; ▪ limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; ▪ laws and business practices favoring local competitors or general preferences for local vendors; ▪ limited or insufficient intellectual property protection or difficulties enforcing our intellectual property; ▪ regional or global conflicts, including sanctions or other laws and regulations prohibiting or limiting operations in certain jurisdictions; ▪ political instability or terrorist activities; ▪ exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S.
We may incur significant losses in the future for a number of reasons, including the other risks described in this “Risk Factors” section, and unforeseen expenses, difficulties, complications and delays and other unknown events. If we are unable to achieve and sustain profitability, the value of our business and common stock may significantly decrease.
We may incur significant losses in the future for a number of reasons, including the other risks described in this “Risk Factors” section, and unforeseen expenses, difficulties, complications and delays and other unknown events. If we are unable to achieve or sustain profitability in the future, the value of our business and common stock may significantly decrease.
We also cannot be sure that our existing general liability insurance coverage and coverage for errors or omissions will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims, or that insurers will not deny coverage as to any future claim.
We also cannot be sure that our existing general liability insurance coverage, our cybersecurity coverage, and coverage for errors or omissions will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims, or that insurers will not deny coverage as to any future claim.
In these cases, upon detection, we took prompt action to prevent any additional unauthorized access, put further security controls in place and worked with law enforcement agencies. These efforts may not completely eliminate potential risks from such incidents, however.
In these cases, upon detection, we took prompt action to prevent any additional unauthorized access, put further security controls in place and worked with law enforcement agencies. These efforts may not completely eliminate potential risks from such incidents.
Business and Industry Risks We derive a majority of our revenue from our DocuSign eSignature product, and slower or declining adoption of our DocuSign eSignature product, without a corresponding increase in the use of our other products and solutions, could cause our operating results to suffer.
Business and Industry Risks We derive a majority of our revenue from our eSignature product, and slower or declining adoption of our eSignature product, without a corresponding increase in the use of our other products and solutions, could cause our operating results to suffer.
Furthermore, our activities are subject to U.S. economic sanctions laws and regulations that prohibit the shipment of certain products and services without the required export authorizations, including to countries, governments and persons targeted by U.S. embargoes or sanctions.
Furthermore, our activities are subject to U.S. economic sanctions laws and regulations that prohibit the shipment or distribution of certain products and services without the required export authorizations, including to countries, governments and persons targeted by U.S. embargoes or sanctions.
We are particularly reliant on the UETA and the ESIGN Act, which together have solidified the legal landscape in the U.S. for use of electronic signatures and records by providing that electronic signatures and records carry the same weight and have the same legal effect as paper documents and wet ink signatures. ▪ The Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the Gramm Leach Bliley Act, and state laws relating to privacy and data security. ▪ Additionally, the FTC and many state attorney generals are interpreting federal and state consumer protection laws as imposing standards for the online collection, use, dissemination, and security of data.
We are particularly reliant on the UETA and the ESIGN Act, which together have solidified the legal landscape in the U.S. for use of electronic signatures and records by providing that electronic signatures and records carry the same weight and have the same legal effect as paper documents and wet ink signatures. ▪ The Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the Gramm-Leach-Bliley Act, and state laws relating to privacy and data security. ▪ Additionally, the FTC and many U.S. state attorney generals are interpreting federal and state consumer protection laws as imposing standards for the online collection, use, dissemination, and security of personal information.
New products, solutions or enhancements to our existing products and solutions could fail to attain sufficient market acceptance for many reasons, including: ▪ failure to predict market demand for particular features or functions, or to timely meet demand; ▪ defects, errors or failures in our products and solutions; ▪ negative publicity about their performance or effectiveness; ▪ changes in applicable legal or regulatory requirements, or increased legal or regulatory scrutiny, adversely affecting our products and solutions; ▪ delays in releasing our products and solutions to the market; ▪ negative customer perception of our sales-directed strategies; and ▪ introduction or anticipated introduction of competing products by our competitors.
New products, solutions or enhancements to our existing products and solutions could also fail to attain sufficient market acceptance for many reasons, including: ▪ failure to predict market demand for particular features or functions, or to timely meet demand; ▪ defects, errors or failures in our products and solutions; ▪ negative publicity about their performance or effectiveness; ▪ changes in applicable legal or regulatory requirements, or increased legal or regulatory scrutiny, adversely affecting our products and solutions; ▪ delays in releasing our products and solutions to the market; ▪ negative customer perception of our sales-directed strategies, including the pricing of new products or enhancements; and ▪ introduction or anticipated introduction of competing products by our competitors.
Although we continue to add to our suite of products and solutions for automating the agreement process, we expect that we will be substantially dependent on our DocuSign eSignature product to generate revenue for the foreseeable future.
Although we continue to add to our suite of products and solutions for automating the agreement process, we expect that we will be substantially dependent on our eSignature product to generate revenue for the foreseeable future.
We obtain and process a large amount of sensitive customer data. Any real or perceived improper use of, disclosure of, or access to such data could harm our reputation, as well as have an adverse effect on our business. We receive, store and process personal information and other data from and about our customers, employees, partners and service providers.
We obtain and process a large amount of sensitive customer data. Any actual or perceived improper use of, disclosure of, or access to such data could harm our reputation, as well as have an adverse effect on our business. We receive, store and process personal information and other data from and about our customers, employees, partners and service providers.
General Risks • Unfavorable conditions in our industry or the global economy or reductions in information technology spending. • Natural catastrophic events and man-made problems, including the effects of climate change. DocuSign, Inc.| 2023 Form 10-K | 13 Risk Factors Our business involves significant risks, some of which are described below.
General Risks • Unfavorable conditions in our industry or the global economy or reductions in information technology spending. • Natural catastrophic events and man-made problems, including the effects of climate change. DocuSign, Inc.| 2024 Form 10-K | 13 Risk Factors Our business involves significant risks, some of which are described below.
The implementation and transition to any new critical system, such as our new ERP system, may be disruptive to our business if they do not work as planned or if we experience issues related to such implementation or transition, which could have a material adverse effect on our operations and result in compromised internal reporting and processes.
The implementation and transition to any new critical system, such as the ERP system we implemented in 2023, may be disruptive to our business if they do not work as planned or if we experience issues related to such implementation or transition, which could have a material adverse effect on our operations and result in compromised internal reporting and processes.
Financial Risks, including Taxation • Any fluctuations in our financial results or failure to meet expectations of securities analysts or investors. • Our long and unpredictable sales cycles, which often require considerable time and expense. • The delay in reflecting downturns or upturns in sales contracts in our operating results due to recognition of subscription revenue. • Any failure to forecast our revenue accurately, or failure to match our expenditures with corresponding revenue. • Any inability to achieve or sustain profitability in the future. • Any operational challenges in connection with our current or future international operations. • A lack of additional capital or the availability to use it on reasonable terms to support business growth and objectives. • Any limits on business flexibility and access to capital due to substantial indebtedness. • Any limits on our ability to use our net operating loss carryforwards to offset future taxable income. • A lack of sufficient cash to service our debt.
Financial Risks, including Taxation • Any fluctuations in our financial results or failure to meet expectations of securities analysts or investors. • Our long and unpredictable sales cycles, which often require considerable time and expense. • The delay in reflecting downturns or upturns in sales contracts in our operating results due to recognition of subscription revenue. • Any failure to forecast our revenue accurately, or failure to match our expenditures with corresponding revenue. • Any inability to achieve or sustain profitability in the future. • Any operational challenges in connection with our current or future international operations. • A lack of additional capital or the availability to use it on reasonable terms to support business growth and objectives. • Any limits on business flexibility and access to capital due to substantial indebtedness. • Any limits on our ability to use our net operating loss carryforwards to offset future taxable income.
If bad actors gain improper access to our systems or databases or those of our partners and other third parties who have access to our data, they may be able to steal, publish, delete, copy, unlawfully or fraudulently use or modify data, including personal information and/or blackmail us to pay a ransom.
If bad actors gain improper access to our systems or databases or those of our partners, service providers, and other third parties who have access to our data, they may be able to steal, publish, delete, copy, unlawfully or fraudulently use or modify data, including personal information and/or blackmail us to pay a ransom.
Sales of subscriptions to our DocuSign eSignature product account for substantially all of our subscription revenue and are the source of substantially all of our professional services revenue.
Sales of subscriptions to our eSignature product account for substantially all of our subscription revenue and are the source of substantially all of our professional services revenue.
Successfully promoting and maintaining our brand will depend largely on the effectiveness of our marketing efforts, and our ability to provide reliable and useful solutions to meet the needs of our customers at competitive prices, maintain our customers’ trust, continue to develop new functionality and solutions and successfully differentiate our products and solutions from those of our competitors’.
Successfully promoting and maintaining our brand will depend largely on the effectiveness of our marketing efforts, and our ability to provide reliable and useful solutions to meet the needs of our customers at competitive prices, maintain our customers’ trust, continue to develop new functionality and solutions and successfully differentiate our products and solutions from those of our competitors.
Additionally, global events as well as geopolitical developments, including regional conflicts in Europe, fluctuating commodity prices, trade tariff developments and inflation have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which could amplify the volatility of currency fluctuations.
Additionally, global events as well as geopolitical developments, including regional conflicts in Europe and the Middle East, fluctuating commodity prices, trade tariff developments and inflation have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which could amplify the volatility of currency fluctuations.
A successful assertion by one or more states requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently do collect some taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest.
A successful assertion by one or more states or foreign jurisdictions requiring us to collect taxes where we presently do not do so, or to collect more taxes in a jurisdiction in which we currently do collect some taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest.
Natural catastrophic events and man-made problems such as power disruptions, computer viruses, data security breaches, regional or global conflicts, and terrorism may disrupt our business. We rely heavily on our network infrastructure and information technology systems, including our ERP system, for our business operations.
Natural catastrophic events and man-made problems such as power disruptions, computer viruses, data security breaches, regional or global conflicts, and terrorism may disrupt our business. We rely heavily on our network infrastructure and information technology systems, including our security-related or ERP systems, for our business operations.
In addition to the other risks described herein, factors that may affect our operating results or cause our financial results to fluctuate include the following: ▪ general economic, market and industry conditions, including resulting from regional or global conflicts and as a result of inflation, rising interest rates and increased debt and equity market volatility; ▪ fluctuations in demand for, or pricing of, our products and solutions, including due to the effects of global macro-economic conditions, and differing levels of demand for our products as our customers’ priorities, resources, financial conditions and economic outlook change; ▪ our ability to attract new customers; ▪ our ability to renew our subscriptions with, and expand sales of our products and solutions to, our existing customers; ▪ timing of revenue recognition; ▪ customer delays in purchasing decisions in anticipation of new products or product enhancements by us or our competitors; ▪ changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions, including cost-cutting measures or other effects of macro-economic conditions; ▪ the timing and success of new product and service introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation or new entrants among competitors, customers, or strategic partners ; ▪ our ability to control costs, including our operating expenses, and related impact to our operating margin; ▪ the timing of costs related to our go-to-market strategy including expansion of our sales capacity and marketing; DocuSign, Inc.| 2023 Form 10-K | 23 ▪ potential accelerations of prepaid expenses and deferred costs; ▪ the amount and timing of non-cash expenses, including stock-based compensation, impairments and other non-cash charges; ▪ the amount and timing of costs associated with recruiting, training and integrating new employees, and retaining existing employees; ▪ the amount and timing of costs associated with our restructuring plans; ▪ the time and costs related to litigation, including securities litigation and litigation and claims involving our former CEO; ▪ issues relating to acquisitions and partnerships with third parties; ▪ the impact of new accounting pronouncements; ▪ changes in laws and regulations that affect our business; ▪ significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products and solutions; and ▪ awareness of our brand on a global basis.
In addition to the other risks described herein, factors that may affect our operating results or cause our financial results to fluctuate include the following: ▪ general economic, market and industry conditions, including resulting from regional or global conflicts and as a result of inflation, volatile interest rates, actual or perceived instability in the global banking sector and increased debt and equity market volatility; ▪ fluctuations in demand for, or pricing of, our products and solutions, including due to the effects of global macro-economic conditions, and differing levels of demand for our products as our customers’ priorities, resources, financial conditions and economic outlook change; ▪ our ability to attract new customers; ▪ our ability to renew our subscriptions with, and expand sales of our products and solutions to, our existing customers; ▪ timing of revenue recognition; DocuSign, Inc.| 2024 Form 10-K | 23 ▪ customer delays in purchasing decisions in anticipation of new products or product enhancements by us or our competitors; ▪ changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions, including cost-cutting measures or other effects of macro-economic conditions; ▪ the timing and success of new product and service introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation or new entrants among competitors, customers, or strategic partners ; ▪ our ability to control costs, including our operating expenses, and related impact to our operating margin; ▪ the timing of costs related to our go-to-market strategy including expansion of our sales capacity and marketing; ▪ potential accelerations of prepaid expenses and deferred costs; ▪ the amount and timing of non-cash expenses, including stock-based compensation, impairments and other non-cash charges; ▪ the amount and timing of costs associated with recruiting, training and integrating new employees, and retaining existing employees; ▪ the amount and timing of costs associated with our restructuring plans; ▪ the time and costs related to litigation, including securities litigation and litigation and claims involving our former CEO; ▪ issues relating to acquisitions and partnerships with third parties; ▪ the impact of new accounting pronouncements; ▪ changes in laws and regulations that affect our business; ▪ significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products and solutions; and ▪ awareness of our brand on a global basis.
Our ability to use our net operating loss carryforwards to offset future taxable income may be subject to certain limitations. As of January 31, 2023 , we had accumulated net operating loss carryforwards and research tax credits in our federal, state and foreign jurisdictions with varying expiration dates.
Our ability to use our net operating loss carryforwards to offset future taxable income may be subject to certain limitations. As of January 31, 2024, we had accumulated net operating loss carryforwards and research tax credits in our federal, state and foreign jurisdictions with varying expiration dates.
We are subject to laws and regulations governing our use of our business data. For more information on these laws and regulations, see the risk factor “ We are subject to laws and regulations affecting our business, including those related to e-signature, marketing, advertising, privacy, data protection and information security.
We are subject to various evolving laws and regulations governing our use of our business data. For more information on these laws and regulations, see the risk factor “ We are subject to laws and regulations affecting our business, including those related to e-signature, marketing, advertising, privacy, data protection and information security.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: ▪ authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights and preferences determined by our board of directors that may be senior to our common stock; ▪ require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; ▪ specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our chief executive officer; ▪ establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; DocuSign, Inc.| 2023 Form 10-K | 35 ▪ establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; ▪ prohibit cumulative voting in the election of directors; ▪ provide that our directors may be removed for cause only upon the vote of sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock; ▪ provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and ▪ require the approval of our board of directors or the holders of at least sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock to amend our bylaws and certain provisions of our certificate of incorporation.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: ▪ authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights and preferences determined by our board of directors that may be senior to our common stock; ▪ require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; ▪ specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our chief executive officer; ▪ establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; ▪ establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; ▪ prohibit cumulative voting in the election of directors; ▪ provide that our directors may be removed for cause only upon the vote of sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock; ▪ provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and ▪ require the approval of our board of directors or the holders of at least sixty-six and two-thirds percent (66 2/3%) of our outstanding shares of common stock to amend our bylaws and certain provisions of our certificate of incorporation.
While we have DocuSign, Inc.| 2023 Form 10-K | 30 been issued patents in the U.S. and other countries and have additional patent applications pending, we may be unable to obtain patent protection for the technology covered in our patent applications.
While we have DocuSign, Inc.| 2024 Form 10-K | 30 been issued patents in the U.S. and other countries and have additional patent applications pending, we may be unable to obtain patent protection for the technology covered in our patent applications.
Any imposition by state governments or local governments of sales tax collection obligations on out-of-state sellers could also create additional administrative burdens for us, put us at a competitive disadvantage if they do not impose similar obligations on our competitors and decrease our future sales, which could have a material adverse impact on our business and operating results.
Any imposition by state or local governments or other jurisdictions of sales tax collection obligations on out-of-state or -jurisdiction sellers could also create additional administrative burdens for us, put us at a competitive disadvantage if they do not impose similar obligations on our competitors and decrease our future sales, which could have a material adverse impact on our business and operating results.
If the release of our new and enhanced products, solutions or functionalities do not meet customer needs or if our customers do not accept them, our business, operating results and financial condition would be harmed.
If the release of these or other new and enhanced products, solutions or functionalities do not meet customer needs or if our customers do not accept them, our business, operating results and financial condition would be harmed.
Despite significant efforts to create security barriers to such threats, it is virtually impossible for us, our service providers, our partners and our customers to entirely mitigate these risks.
Despite significant efforts to identify vulnerabilities and create security barriers to such threats, it is virtually impossible for us, our service providers, our partners and our customers to entirely mitigate these risks.
Any interruptions or delays in our service, whether or not caused by our products, whether as a result of third-party error, our own error, natural disasters and the effects of climate change, operational disruptions related to labor shortages or public health crises, including the COVID-19 pandemic, or security breaches, whether accidental or willful, could harm our relationships with customers and cause our revenue to decrease and/or our expenses to increase.
Any interruptions or delays in our service, whether or not caused by our products, whether as a result of third-party error, our own error, natural disasters and the effects of climate change, operational disruptions related to labor shortages, public health crises, or security breaches, whether accidental or willful, could harm our relationships with customers and cause our revenue to decrease and/or our expenses to increase.
Negative conditions in the general economy both in the U.S. and abroad, including conditions resulting from inflation, changes in interest rates, gross domestic product growth, financial and credit market fluctuations, political turmoil, natural catastrophes and the effects of climate change, public health crises, regional and global conflicts and terrorist attacks in the U.S., Europe, the Asia Pacific region or elsewhere, could cause a decrease in business investments, including spending on information technology, and negatively affect the growth of our business.
Negative conditions in the general economy both in the U.S. and abroad, including conditions resulting from inflation, changes in interest rates, actual or perceived instability in the global banking sector, gross domestic product growth, financial and credit market fluctuations, political turmoil, natural catastrophes and the effects of climate change, public health crises, regional and global conflicts and terrorist attacks in the U.S., Europe, the Asia Pacific region or elsewhere, could cause a decrease in business investments, including spending on information technology, and negatively affect the growth of our business.
While we implement bug fixes and upgrades as part of our regularly scheduled system maintenance, we may not be able to detect and correct defects or errors before implementing our products and solutions. Consequently, we or our customers may discover defects or errors after our products and solutions have been employed.
While we implement bug fixes and upgrades as part of our regularly scheduled system maintenance, we may not be able to reasonably anticipate and correct defects or errors before implementing our products and solutions. Consequently, we or our customers may discover defects or errors after our products and solutions have been employed.
Moreover, policing unauthorized use of our technologies, trade secrets and intellectual property may be difficult, expensive and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the U.S. and where mechanisms for enforcement of intellectual property rights may be weak.
Moreover, policing unauthorized use of our technologies, trade secrets and intellectual property may be difficult, expensive and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the U.S. and where mechanisms for enforcement of intellectual property rights may be less effective.
Even with current and planned disaster recovery arrangements, our disaster recovery planning may not account for all eventualities and our business could be harmed. In addition to third-party data centers and cloud providers, we also rely on our own technical operations infrastructure to support and serve our rapidly growing customer base.
Even with current and planned disaster recovery arrangements, our disaster recovery planning may not account for all eventualities and our business could be harmed. In addition to third-party data centers and cloud service providers, we also rely on our own technical operations infrastructure to support and serve our increasing customer base.
Our employees, service providers and third parties work more frequently on a remote or hybrid arrangement basis, which may involve relying on less secure systems and may increase the risk of cybersecurity related incidents. We cannot guarantee these private work environments and electronic connections to our work environment have the same robust security measures deployed in our physical offices.
Our employees, service providers and third parties often work on a remote or hybrid arrangement basis, which may involve relying on less secure systems and may increase the risk of cybersecurity related incidents. We cannot guarantee these private work environments and electronic connections to our work environment have the same robust security measures as those deployed in our physical offices.
If we do not address these risks successfully, our operating results could differ materially from our estimates and forecasts or the expectations of investors, causing our business to suffer and our stock price to decline. We have a history of operating losses and may not achieve or sustain profitability in the future.
If we do not address these risks successfully, our operating results could differ materially from our estimates and forecasts or the expectations of investors, causing our business to suffer and our stock price to decline. We have historically experienced operating losses and may not achieve or sustain profitability in the future.
In each of the years ended January 31, 2023, 2022, and 2021 total revenue generated from customers outside the U.S. was 25%, 23% , and 20% of our total revenue. As of January 31, 2023 , we have offices in 12 countries and approximately 33% of our full-time employees were located outside of the U.S.
In each of the years ended January 31, 2024, 2023, and 2022 total revenue generated from customers outside the U.S. was 26%, 25% , and 23% of our total revenue. As of January 31, 2024 , we have offices in 12 countries and approximately 33% of our full-time employees were located outside of the U.S.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under DocuSign, Inc.| 2024 Form 10-K | 27 the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock.
If our management team or independent registered public accounting firm were to furnish an adverse report, or if it is determined that we have a material weakness or significant deficiency in our internal control over financial reporting, investors could lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities or shareholder litigation.
If our management team or independent registered public accounting firm were to furnish an adverse report, or if it is determined that we have a material weakness or significant deficiency in our internal control over financial reporting, investors could lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could DocuSign, Inc.| 2024 Form 10-K | 33 decline, and we could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities or shareholder litigation.
Bribery Act, and similar laws and regulations in other jurisdictions; ▪ adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash; and ▪ exposure to regional or global public health issues, such as the COVID-19 pandemic, and to travel restrictions and other measures undertaken by governments in response to such issues.
Bribery Act, and similar laws and regulations in other jurisdictions; ▪ adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash; and ▪ exposure to regional or global public health issues, and to travel restrictions and other measures undertaken by governments in response to such issues.
As a result, our operating results could suffer due to: ▪ any decline in demand for our DocuSign eSignature product; ▪ the failure of our DocuSign eSignature product to maintain market acceptance; ▪ the market for electronic signatures failing to grow, or growing more slowly than we expect; ▪ new products and technologies from our competitors that replace or represent an improvement over our DocuSign eSignature product; ▪ new technological innovations or standards that our DocuSign eSignature product does not address; ▪ changes in regulations; ▪ sensitivity to our current or future pricing; ▪ our inability to release enhanced versions of our DocuSign eSignature product on a timely basis; and ▪ macro- and micro-economic factors, including inflation, rising interest rates, increased debt and equity market volatility and the impact of regional or global conflicts or other public health crises, including the COVID-19 pandemic.
As a result, our operating results could suffer due to: ▪ any decline in demand for our eSignature product; ▪ the failure of our eSignature product to maintain market acceptance; ▪ the market for electronic signatures failing to grow, or growing more slowly than we expect; ▪ new products and technologies from our competitors that replace or represent an improvement over our eSignature product; ▪ new technological innovations or standards that our eSignature product does not address; ▪ changes in regulations; ▪ sensitivity to our current or future pricing; ▪ our inability to release enhanced versions of our eSignature product on a timely basis; and ▪ macro- and micro-economic factors, including inflation, volatile interest rates, increased debt and equity market volatility, actual or perceived instability in the global banking sector, and the impact of regional or global conflicts or other public health crises.
Additional factors that may influence the length and variability of our sales cycle include: ▪ the effectiveness of our sales force; ▪ the discretionary nature of purchasing and budget cycles and decisions; ▪ the obstacles placed by customers’ procurement process; ▪ economic conditions, including inflation, rising interest rates and increased debt and equity market volatility, and other factors impacting customer budgets; ▪ the customer’s integration complexity; ▪ the customer’s familiarity with e-signature and agreement automation processes; ▪ the complexity of contracts with certain large business customers, including customers in the public sector or other highly regulated industries; ▪ customer evaluation of competing products during the purchasing process; ▪ the competitive market for our products and services; and ▪ evolving customer demands.
Additional factors that may influence the length and variability of our sales cycle include: ▪ the effectiveness of our sales force; ▪ the discretionary nature of purchasing and budget cycles and decisions; ▪ the obstacles placed by customers’ procurement process; ▪ economic conditions, including due to inflation, volatile interest rates, a potential U.S. government shutdown, increased debt and equity market volatility, and other factors impacting customer budgets; ▪ the customer’s integration complexity; ▪ the customer’s familiarity with e-signature and agreement automation processes; ▪ the complexity of contracts with certain large business customers, including customers in the public sector or other highly regulated industries; ▪ customer evaluation of competing products during the purchasing process; ▪ the competitive market for our products and services; and ▪ evolving customer demands.
The market price of our common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control or are related in complex ways, including: ▪ actual or anticipated fluctuations in our financial condition and operating results; ▪ customer demand for our solutions and the pace of the digital transformation of business; ▪ changes in senior management or key personnel; ▪ general economic, regulatory and market conditions, including inflation and interest rate fluctuations; ▪ variance in our financial performance from expectations of securities analysts; ▪ issuance of research reports by securities analysts, including publishing unfavorable reports; ▪ changes in the prices of subscriptions to our products and solutions; ▪ changes in our projected operating and financial results; ▪ changes in laws or regulations applicable to our products and solutions; ▪ announcements by us or our competitors of significant business developments, acquisitions or new offerings; ▪ our involvement in any litigation; ▪ future sales of our common stock or other securities by us or our stockholders; DocuSign, Inc.| 2023 Form 10-K | 34 ▪ the consummation, and the anticipated benefits, of our stock repurchase program; ▪ the trading volume of our common stock; ▪ changes in the anticipated future size and growth rate of our market; ▪ changes in the political climate in the U.S.; and ▪ terrorist attacks, natural disasters and the effects of climate change, regional and global conflicts, sanctions, laws and regulations that prohibit or limit operations in certain jurisdictions, public health crises (such as the COVID-19 pandemic) or other such events impacting countries where we have operations.
The market price of our common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control or are related in complex ways, including: ▪ actual or anticipated fluctuations in our financial condition and operating results; ▪ customer demand for our solutions and the pace of the digital transformation of business; ▪ changes in senior management or key personnel; ▪ general economic, regulatory and market conditions, including inflation and interest rate fluctuations; ▪ variance in our financial performance from expectations of securities analysts; ▪ issuance of research reports by securities analysts, including publishing unfavorable reports; ▪ changes in the prices of subscriptions to our products and solutions; ▪ changes in our projected operating and financial results; ▪ changes in laws or regulations applicable to our products and solutions; ▪ announcements by us or our competitors of significant business developments, acquisitions or new offerings; ▪ rumors and market speculation made by external parties that involve us or other companies in our industry; ▪ our involvement in any litigation; ▪ future sales of our common stock or other securities by us or our stockholders; ▪ the consummation, and the anticipated benefits, of our stock repurchase program; ▪ the trading volume of our common stock; ▪ changes in the anticipated future size and growth rate of our market; ▪ changes in the political climate in the U.S.; and ▪ terrorist attacks, natural disasters and the effects of climate change, regional and global conflicts, sanctions, laws and regulations that prohibit or limit operations in certain jurisdictions, public health crises or other such events impacting countries where we have operations.
Complying with laws and regulations, in particular those related to privacy and data protection, could also result in additional costs and liabilities to us or inhibit sales of our software. ” If we are not able to comply with these laws or regulations or if we become liable under these evolving laws DocuSign, Inc.| 2023 Form 10-K | 16 or regulations, we could be directly harmed, and we may be forced to implement new measures to reduce our exposure to this liability.
Complying with laws and regulations, in particular those related to privacy and data protection, could also result in additional costs and liabilities to us or inhibit sales of our software. ” If we are not able to comply with these laws or regulations or if we become liable under these evolving laws or regulations, we could be directly harmed, and we may be forced to implement new measures to reduce our exposure to this liability.
If we fail to perform timely maintenance or if customers are otherwise dissatisfied with the frequency and/or duration of our maintenance services and related system outages, our existing customers could elect to not renew their subscriptions, delay or withhold payment to us, or cause us to issue credits, make refunds or pay penalties, and potential customers may not adopt our products and solutions and our brand and reputation could be harmed.
If we fail to perform DocuSign, Inc.| 2024 Form 10-K | 22 timely maintenance or if customers are otherwise dissatisfied with the frequency and/or duration of our maintenance services and related system outages, our existing customers could elect to not renew their subscriptions, delay or withhold payment to us, or cause us to issue credits, make refunds or pay penalties, and potential customers may not adopt our products and solutions and our brand and reputation could be harmed.
In DocuSign, Inc.| 2023 Form 10-K | 31 addition, our customer agreements generally include a warranty that the proper use of DocuSign by a customer in accordance with the agreement and applicable law will be sufficient to meet the definition of an “electronic signature” as defined in the Electronic Signatures in Global and National Commerce Act (“ESIGN Act”) and eIDAS.
In addition, our customer agreements generally include a warranty that the proper use of DocuSign by a customer in accordance with the agreement and applicable law will be sufficient to meet the definition of an “electronic signature” as defined in the Electronic Signatures in Global and National Commerce Act (“ESIGN Act”) and eIDAS.
While we experienced an increase in paying customers and revenue in the past, in part due to macro-economic conditions, including the pandemic, there is no assurance that we will experience a continued increase in paying customers or that new or existing customers will utilize our products at similar levels as businesses continue to return to more normalized, hybrid or in-person work environments.
DocuSign, Inc.| 2024 Form 10-K | 17 While we experienced an increase in paying customers and revenue in the past, in part due to macro-economic conditions, including the pandemic, there is no assurance that we will experience a continued increase in paying customers or that new or existing customers will utilize our products at similar levels as businesses continue to return to more normalized, hybrid or in-person work environments.
We believe that future growth of our revenue depends on a number of factors, including our ability to: ▪ price our products and solutions effectively so that we are able to attract and retain customers; ▪ attract new customers, increase our existing customers’ use of our products and solutions and provide our customers with excellent customer support; DocuSign, Inc.| 2023 Form 10-K | 17 ▪ expand our DocuSign product offerings for our customers; ▪ effectively implement our sales strategies, including the expansion of self-serve capabilities; ▪ continue to introduce our products and solutions to new markets outside of the U.S.; ▪ mitigate and effectively manage the increased pace of the digital transformation of business and the costs of monitoring and complying with evolving governmental mandates; ▪ hire, retain, train, and integrate our employee base including our sales force, research and development teams and key employees; ▪ successfully identify and develop, acquire or invest in businesses, products or technologies that we believe could complement or expand our products and solutions; and ▪ increase global awareness of our brand.
We believe that future growth of our revenue depends on a number of factors, including our ability to: ▪ price our products and solutions effectively so that we are able to attract and retain customers; ▪ attract new customers, increase our existing customers’ use of our products and solutions and provide our customers with excellent customer support; ▪ expand our product offerings for our customers, including our ability to successfully implement such product offerings and ensure successful adoption of new or enhanced product offerings by our customers; ▪ effectively implement our sales strategies, including the expansion of self-serve capabilities; ▪ continue to introduce our products and solutions to new markets outside of the U.S.; ▪ mitigate and effectively manage the increased pace of the digital transformation of business and the costs of monitoring and complying with evolving governmental mandates; ▪ hire, retain, train, and integrate our employee base including our sales force, customer success, research and development teams and key employees; ▪ successfully identify and develop, acquire or invest in businesses, products or technologies that we believe could complement or expand our products and solutions; and ▪ increase global awareness of our brand.
The execution of this restructuring plan was substantially completed at the end of fiscal 2023. Additionally, in February 2023, in an effort to support our growth, scale and profitability objectives, we authorized an additional restructuring plan which included a restructuring and reduction of the current workforce by approximately 10%, primarily in our sales organization.
Additionally, in February 2023, in an effort to support our growth, scale and profitability objectives, we authorized an additional restructuring plan, which included a restructuring and reduction of the current workforce by approximately 10%. The execution of this restructuring plan was substantially completed at the end of the second quarter of fiscal 2024.
Our management and other personnel devote a substantial amount of time to compliance with these requirements and such compliance has increased, and will continue to increase, our legal, accounting and financial costs. DocuSign, Inc.| 2023 Form 10-K | 32 The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
Our management and other personnel devote a substantial amount of time to compliance with these requirements and such compliance has increased, and will continue to increase, our legal, accounting and financial costs. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
We may function as a HIPAA business associate for certain of our customers and, as such, are subject to applicable privacy and data security requirements. Failure to comply with HIPAA can result in significant civil monetary penalties and, in certain circumstances, criminal penalties and fines.
We may function as a HIPAA business associate for certain of our customers and, as such, are subject to applicable privacy and data security requirements. Failure to comply with applicable HIPAA requirements can result in significant civil monetary penalties and, in certain circumstances, criminal penalties and fines. Additionally, we are subject to various other laws and regulations affecting our business.
We may require additional capital to support business growth and objectives, and this capital might not be available to us on reasonable terms, if at all, and may result in stockholder dilution. We fund our operations through payments by our customers for use of our product offerings and related services.
We may require additional capital to support business growth and objectives, and this capital might not be available to us on reasonable terms, if at all, and may result in stockholder dilution. DocuSign, Inc.| 2024 Form 10-K | 26 We fund our operations through payments by our customers for use of our product offerings and related services.
Like other organizations providing valuable technology and services, we are subject to increasing cyberattacks from malicious third parties using a wide variety of tactics. The frequency and sophistication of such threats continues to increase and often becomes further heightened in connection with geopolitical tensions.
DocuSign, Inc.| 2024 Form 10-K | 15 Like other organizations providing valuable technology and services, we are subject to increasing cyberattacks from malicious third parties using a wide variety of tactics. The frequency and sophistication of such threats continues to increase and often becomes further heightened in connection with geopolitical tensions.
We intend to continue to incur significant expenses to support growth, further develop and enhance our products and solutions, expand our infrastructure and technology, increase our sales headcount and marketing activities, and grow our international operations and customer base.
We intend to continue to incur significant expenses to support growth, further develop and enhance our products and solutions, expand our infrastructure and technology, incentivize and enable our sales organization and marketing activities, and grow our international operations and customer base.
Additionally, while we believe our exposure from the recent conflict in Ukraine is limited, we could experience unanticipated disruptions to our business as a result of current or future regional and global conflicts, including sanctions or other laws and regulations prohibiting or limiting operations in certain jurisdictions, increased risks of potential cyberattacks, related impacts to our customers, or micro- or macro-economic effects on the global economy.
Additionally, while we believe our exposure from the recent conflicts in Ukraine and the Middle East is limited, we could experience unanticipated disruptions to our business as a result of current or future regional and global conflicts, including DocuSign, Inc.| 2024 Form 10-K | 37 sanctions or other laws and regulations prohibiting or limiting operations in certain jurisdictions, increased risks of potential cyberattacks, related impacts to our customers, or micro- or macro-economic effects on the global economy.
If we fail to forecast our revenue accurately, or if we fail to match our expenditures with corresponding revenue, our operating results could be adversely affected. DocuSign, Inc.| 2023 Form 10-K | 24 You should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance.
If we fail to forecast our revenue accurately, or if we fail to match our expenditures with corresponding revenue, our operating results could be adversely affected. You should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance.
In addition, we will need to appropriately scale DocuSign, Inc.| 2023 Form 10-K | 21 our internal business systems and our services organization, including customer support and professional services, to serve our growing customer base. Any failure of or delay in these efforts could cause impaired system performance and reduced customer satisfaction.
In addition, we will need to appropriately scale our internal business systems and our services organization, including customer support and professional services, to serve our growing customer base. Any failure of or delay in these efforts could cause impaired system performance and reduced customer satisfaction.
As we attempt to sell access to our products and solutions to new customers with existing products and solutions (or cross-sell additional products and solutions to existing customers), we must convince them that our products and solutions are superior to the solutions that their organizations have used in the past.
As we attempt to sell our products and solutions to new and existing customers, we must convince them that our products and solutions are superior to the solutions that their organizations have used in the past.
DocuSign, Inc.| 2023 Form 10-K | 28 Legal and Regulatory Risks We are subject to laws and regulations affecting our business, including those related to e-signature, marketing, advertising, privacy, data protection and information security. Our actual or perceived failure to comply with laws or regulations could harm our business.
Legal and Regulatory Risks We are subject to laws and regulations affecting our business, including those related to e-signature, marketing, advertising, privacy, data protection and information security. Our actual or perceived failure to comply with laws or regulations could harm our business.
Other states have passed comparable legislation, and some may pass similar legislation with potentially greater penalties, and more rigorous compliance requirements relevant to our business. ▪ The Health Insurance Portability and Accountability Act (“HIPAA”) in the U.S.
DocuSign, Inc.| 2024 Form 10-K | 28 Other states have passed comparable legislation, and some may pass similar legislation with potentially greater penalties, and more rigorous compliance requirements relevant to our business. ▪ The Health Insurance Portability and Accountability Act (“HIPAA”) in the U.S.
Our revenue grew from $2.1 billion in the fiscal year ended January 31, 2022 to $2.5 billion in the fiscal year ended January 31, 2023. We expect that, in the future, as our revenue increases, our revenue growth rate will decline as the scale of our business increases.
Our revenue grew from $2.5 billion in the fiscal year ended January 31, 2023 to $2.8 billion in the fiscal year ended January 31, 2024. We expect that, in the future, as our revenue increases, our revenue growth rate could decline as the scale of our business increases.
Our failure to improve our systems and processes or complete such system implementations or enhancements on a timely basis, or their failure to operate in the intended manner, could harm our business, financial condition, and operating results. Additionally, if the ERP system does not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected.
Our failure to improve our systems and processes or their failure to operate in the intended manner, could harm our business, financial condition, and operating results. Additionally, if the ERP system does not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected.
Our amended and restated certificate of incorporation, however, provides that the U.S. federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
Our amended and restated certificate of incorporation, however, provides that the U.S. federal district courts will be the exclusive forum for DocuSign, Inc.| 2024 Form 10-K | 36 resolving any complaint asserting a cause of action arising under the Securities Act.
For example, in May 2020, we acquired Seal Software Group Ltd., a DocuSign, Inc.| 2023 Form 10-K | 20 provider of contract analytics software, and in July 2020 we acquired Liveoak Technologies, Inc., a provider of a secure agreement-collaboration and identity verification platform.
For example, in May 2020, we acquired Seal Software Group Ltd., a provider of contract analytics software, and in July 2020 we acquired Liveoak Technologies, Inc., a provider of a secure agreement-collaboration and identity verification platform.
For example, we recently launched a new enterprise resource planning, or ERP system, which is designed to accurately maintain our financial records, enhance the flow of financial information, improve data management, and provide timely information to our management team.
For example, in fiscal 2023, we launched a new enterprise resource planning (“ERP”) system, which is designed to accurately maintain our financial records, enhance the flow of financial information, improve data management, and provide timely information to our management team.
The publication of our privacy policies and other documentation that provide commitments about data privacy and security can subject us to potential actions if they are found to be non-compliant, deceptive, unfair, or otherwise misrepresent our actual practices, which could materially and adversely affect our business, financial condition and results of operations.
The publication of our privacy notices and other related documentation that provide commitments about data privacy and security can subject us to potential actions if they are found to be non-compliant, deceptive, unfair, or otherwise DocuSign, Inc.| 2024 Form 10-K | 16 misrepresent our actual practices, which could materially and adversely affect our business, financial condition and results of operations.
Future restrictions on the collection, use, sharing or disclosure of data or additional requirements for the express or implied consent of our customers, partners or end consumers for the use and disclosure of such information could require us to incur additional costs or modify our products and solutions, possibly in a material manner, and could limit our ability to develop new functionality.
For example, changes in the regulatory landscape relating to new and evolving technologies, such as generative AI, and future restrictions on the collection, use, sharing or disclosure of data, or additional requirements for the express or implied consent of our customers, partners or end consumers for the use and disclosure of such information could require us to incur additional costs or modify our products and solutions, possibly in a material manner, and could limit our ability to develop new functionality.
Different pricing structures apply to our DocuSign product offerings. For DocuSign eSignature, we price our subscriptions based on the functionality required by our customers and the quantity of Envelopes provisioned.
DocuSign, Inc.| 2024 Form 10-K | 21 Different pricing structures apply to our DocuSign product offerings. For DocuSign eSignature, we price our subscriptions based on the functionality required by our customers and the quantity of Envelopes provisioned.
If the number of analysts that cover us declines or if analysts do not publish research or reports about our business, delay publishing reports about our business or publish negative reports about our business, regardless of accuracy, our stock price and trading volume could decline.
If the number of analysts that cover us declines or if analysts do not publish research or reports about our business, delay publishing reports DocuSign, Inc.| 2024 Form 10-K | 35 about our business or publish negative reports about our business, regardless of accuracy, our stock price and trading volume could decline.
DocuSign, Inc.| 2023 Form 10-K | 14 The market in which we participate is evolving and highly competitive, which may negatively affect our ability to add new customers, retain existing customers and grow our business. Our products and solutions address a market that is evolving and highly competitive.
The market in which we participate is evolving and highly competitive, which may negatively affect our ability to add new customers, retain existing customers and grow our business. Our products and solutions address a market that is evolving and highly competitive.
Risks Related to our Common Stock • Any volatility in the market price of our common stock. • Any future sales of our common stock in the public market may cause our common stock price to decline. • Securities analysts publishing unfavorable or inaccurate research about us, or not publishing research.
Risks Related to our Common Stock • Any volatility in the market price of our common stock. • Securities analysts publishing unfavorable or inaccurate research about us, or not publishing research.
However, if other banks and financial institutions wind down and liquidate, enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our DocuSign, Inc.| 2023 Form 10-K | 26 existing cash, cash equivalents and investments may be threatened and could have a material adverse effect on our business and financial condition.
For example, if banks or financial institutions wind down and liquidate, enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened and could have a material adverse effect on our business and financial condition.
While we have security measures in place designed to protect our production, development and other systems, maintain the integrity of customer, company, partner and employee information, and prevent data loss, misappropriation and other security breaches and incidents, we have faced security incidents in the past.
While we have security measures in place designed to protect our production and development environment and other systems, maintain the integrity of customer, company, partner and employee information, and prevent data loss, misappropriation and other security breaches and incidents, we have faced security incidents in the past that did not have a material impact on our operations.
As we increase our international sales and business and sales to the public sector, we may engage with business partners and third-party intermediaries to market our products and solutions and to obtain necessary permits, licenses, and other regulatory approvals.
As we increase our international sales and business and sales to the public sector internationally, we may engage with business partners and third-party intermediaries to market our products and solutions and to obtain necessary permits, DocuSign, Inc.| 2024 Form 10-K | 34 licenses, and other regulatory approvals.
Legal and Regulatory Risks • Any actual or perceived failure to comply with laws and regulations affecting our business. • Legal proceedings against us by third parties for various claims, including any current or future legal proceedings. • Any failure to adequately protect our proprietary rights, including intellectual property rights.
Legal and Regulatory Risks • Any actual or perceived failure to comply with laws and regulations affecting our business. • Legal proceedings against us by third parties for various claims, including any current or future legal proceedings. • Any failure to adequately protect our proprietary rights, including intellectual property rights. • The implementation of AI in our business and challenges with properly governing its use.
Failure to establish and maintain relationships with partners that can provide complementary technology offerings and software integrations could limit our ability to grow our business. Our products and solutions seamlessly integrate with hundreds of other software applications, including Salesforce, Google and Microsoft.
Failure to establish and maintain relationships with partners that can provide complementary technology offerings and software integrations could limit our ability to grow our business. DocuSign, Inc.| 2024 Form 10-K | 20 Our products and solutions seamlessly integrate with hundreds of other software applications, including Google, Microsoft, Oracle, Salesforce, SAP, and ServiceNow.
Government demand and payment for our offerings are affected by public sector budgetary cycles and funding authorizations, and funding reductions or delays, including as a result of macro-economic factors, including inflation, rising interest rates, regional or global conflicts and public health crises, may adversely affect public sector demand for our products and solutions.
Government demand and payment for our offerings are affected by public sector budgetary cycles and funding authorizations, and funding reductions or delays, including as a result of macro-economic factors, including inflation, volatile interest rates, a potential U.S. government shutdown, actual or perceived instability in the global banking sector, regional or global conflicts and public health crises, may adversely affect public sector demand for our products and solutions.
DocuSign, Inc.| 2023 Form 10-K | 33 Foreign governments also regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our ability to distribute our products and solutions or could limit our end-customers’ ability to implement our products and solutions in those countries.
Foreign governments also regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted, and may in the future enact, sanctions and laws that could limit our ability to distribute our products and solutions or could limit our end-customers’ ability to implement our products and solutions in those countries.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeDocuSign, Inc. and Mary Agnes Wilderotter. In the demand, Mr. Springer alleges that he was wrongfully terminated as CEO; asserts related claims against DocuSign and Ms. Wilderotter, including defamation, withholding promised compensation and breach of contract; and seeks unspecified damages and other relief.
Biggest changeSpringer delivered a demand for arbitration before JAMS, a private alternative dispute resolution firm, captioned Daniel D. Springer v. DocuSign, Inc. and Mary Agnes Wilderotter. In the demand, Mr. Springer alleges that he was wrongfully terminated as Chief Executive Officer; asserts related claims against DocuSign and Ms.
As amended, the suit purports to allege claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, based on allegedly false and misleading statements about our business and prospects during the course of the COVID-19 pandemic.
As amended, the suit purports to allege claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, based on allegedly false and misleading statements about our business and prospects during the course of the COVID-19 pandemic.
Securities Litigation and Related Derivative Litigation On February 8, 2022, a putative securities class action was filed in the U.S. District Court for the Northern District of California, captioned Weston v. DocuSign, Inc., et al., Case No. 3:22-cv-00824, naming DocuSign and certain of our current and former officers as defendants. An amended complaint was filed on July 8, 2022.
Securities Litigation and Related Derivative Litigation On February 8, 2022, a putative securities class action was filed in the U.S. District Court for the Northern District of California, captioned Weston v. DocuSign, Inc., et al., Case No. 3:22-cv-00824, naming DocuSign and certain of our then-current and former officers as defendants. An amended complaint was filed on July 8, 2022.
The Delaware suit (Potteti) was voluntarily dismissed on September 1, 2022, and then re-filed in the Delaware Court of Chancery on September 22, 2022, under the caption Pottetti v. Springer, et al., Case No. C.A. 2022-0852-PAF.
The Delaware suit (Pottetti) was voluntarily dismissed on September 1, 2022, and then re-filed in the Delaware Court of Chancery on September 22, 2022, under the caption Pottetti v. Springer, et al., Case No. C.A. 2022-0852-PAF.
The suits name the Company as a nominal defendant and, depending on the particular case, the members of our board of directors or, in certain instances, current or former officers, as defendants.
The suits name the Company as a nominal defendant and, depending on the particular case, the members of our board of directors or, in certain instances, then-current or former officers, as defendants.
Collectively, these lawsuits purport to assert claims for, among other things, breach of fiduciary duty, aiding and abetting such breach, corporate waste, unjust enrichment, and under Sections 10(b) and 21D of the Securities Exchange Act of 1934. The complaints seek to recover unspecified damages and other relief on the Company’s behalf.
Collectively, these lawsuits purport to assert claims for, among other things, breach of fiduciary duty, aiding and abetting such breach, corporate waste, gross mismanagement, unjust enrichment, and under Sections 10(b) and 21D of the Securities Exchange Act of 1934. The complaints seek to recover unspecified damages and other relief on the Company’s behalf.
DocuSign, Inc.| 2023 Form 10-K | 38 DocuSign Civil Litigation On October 25, 2022, an action was filed in the Delaware Court of Chancery, captioned Daniel D. Springer v. Mary Agnes Wilderotter and DocuSign, Inc., Civil Action No. 2022-0963-LWW, concerning Mr. Springer’s resignation from our board of directors. Mr.
DocuSign Civil Litigation On October 25, 2022, an action was filed in the Delaware Court of Chancery, captioned Daniel D. Springer v. Mary Agnes Wilderotter and DocuSign, Inc., Civil Action No. 2022-0963-LWW, concerning Mr. Springer’s resignation from our board of directors. Mr.
Springer, the Company offered to stipulate to entry of judgment in favor of Mr. Springer as to his disputed resignation and his status as a member of our Board. Following our offer, on January 11, 2023, the Chancery Court issued an order declaring and confirming that (i) Mr. Springer has not resigned from the Board and (ii) Mr.
Springer, the Company offered to stipulate to entry of judgment in favor of Mr. Springer as to his disputed resignation and his status as a member of our board of directors. Following our offer, on January 11, 2023, the Chancery Court issued an order declaring and confirming that (i) Mr.
The cases were filed on May 17, 2022, in the U.S. District Court for the District of Delaware, captioned Potteti v. Springer, et al., Case No. 1:22-cv-00652; on May 19, 2022 in the U.S. District Court for the Northern District of California, captioned Lapin v. Springer, et al., Case No. 3:22-cv-02980; on May 20, 2022, in the U.S.
Springer, et al., Case No. 1:22-cv-00652; on May 19, 2022 in the U.S. District Court for the Northern District of California, captioned Lapin v. Springer, et al., Case No. 3:22-cv-02980; on May 20, 2022, in the U.S. District Court for the Northern District of California, captioned Votto v.
The Delaware Court of Chancery issued an order on September 30,2022 staying the action in light of the securities class action and no response to the complaint will be due unless and until the stay is lifted.
The Delaware Court of Chancery issued an order on September 30, 2022 staying the action in light of the securities class action and no response to the complaint will be due unless and until the stay is lifted. We anticipate seeking a stay of the newly filed Delaware suit (Roy) on similar terms.
District Court for the Northern District of California, captioned Votto v. Springer, et al., Case No. 3:22-cv-02987; and on September 20, 2022 in the U.S. District Court for the Northern District of California, captioned Fox v. Springer, et al., Case No. 3:22-cv-05343. Each case is allegedly brought on the Company’s behalf.
Springer, et al., Case No. 3:22-cv-02987; on September 20, 2022 in the U.S. District Court for the Northern District of California, captioned Fox v. Springer, et al., Case No. 3:22-cv-05343; and on March 7, 2024 in the Delaware Court of Chancery, captioned Roy v. Alhadeff, et al., Case No. C.A. 2024-0223-JTL. Each case is allegedly brought on the Company’s behalf.
Springer is currently a member of the Board. Mr. Springer subsequently filed a motion seeking payment of his attorneys’ fees. DocuSign has opposed this motion, which remains pending before the Chancery Court. In addition, on January 26, 2023, Mr. Springer delivered a demand for arbitration before JAMS, a private alternative dispute resolution firm, captioned Daniel D. Springer v.
Springer has not resigned from the board of directors and (ii) Mr. Springer is currently a member of the board of directors. Mr. Springer subsequently filed a motion seeking payment of his attorneys’ fees. DocuSign has opposed this motion, which remains pending before the Delaware Court of Chancery. In addition, on January 26, 2023, Mr.
DocuSign, Inc., et al., Case No. 3:22-cv-00851, filed in the Eastern District of New York and subsequently transferred to the Northern District of California, was voluntarily dismissed on February 14, 2022. Four putative shareholder derivative cases have been filed containing allegations based on or similar to those in the securities class action (Weston).
An earlier action alleging similar claims against the same defendants, captioned Collins v. DocuSign, Inc., et al., Case No. 3:22-cv-00851, filed in the Eastern District of New York and subsequently transferred to the Northern District of California, was voluntarily dismissed on February 14, 2022.
As amended, the suit is purportedly brought on behalf of purchasers of our securities between June 4, 2020 and June 9, 2022. We moved to dismiss the amended complaint on September 16, 2022. An earlier action alleging similar claims against the same defendants, captioned Collins v.
As amended, the suit is purportedly brought on behalf of purchasers of our securities between June 4, 2020 and June 9, 2022. Our motion to dismiss the case at the pleading stage was denied by the U.S. District Court on April 18, 2023 and the suit is now proceeding.
Removed
DocuSign has engaged legal counsel to defend the matter, and on March 10, 2023, submitted a motion to dismiss several of the causes of action asserted in the demand. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II - OTHER INFORMATION
Added
DocuSign, Inc.| 2024 Form 10-K | 40 Five putative shareholder derivative cases have been filed containing allegations based on or similar to those in the securities class action (Weston). The cases were filed on May 17, 2022, in the U.S. District Court for the District of Delaware, captioned Pottetti v.
Added
Wilderotter, including defamation, withholding promised compensation and breach of contract; and seeks unspecified damages and other relief. The arbitration hearing for this case took place from March 11-15, 2024, and a final order from the arbitrator is expected on or before June 30, 2024. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II - OTHER INFORMATION

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeData for the S&P 500 Index and the S&P 500 Information Technology Index assume reinvestment of dividends. DocuSign, Inc.| 2023 Form 10-K | 39 The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock. Recent Sales of Unregistered Equity Securities None.
Biggest changeThe comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our common stock. DocuSign, Inc.| 2024 Form 10-K | 42 Recent Sales of Unregistered Equity Securities None. Use of Proceeds None.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2023.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item is incorporated by reference to the definitive Proxy Statement for our 2024 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2024.
The program has no expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason by our board of directors. No repurchases occurred under the program during the three months ended January 31, 2023.
The program has no expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason by our board of directors. No repurchases occurred under the program during the three months ended January 31, 2024.
Use of Proceeds None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers In March 2022, our board of directors authorized and approved a stock repurchase program of up to $200.0 million of our outstanding common stock.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers In March 2022, our board of directors authorized and approved a stock repurchase program of up to $200.0 million of our outstanding common stock.
The actual number of stockholders is greater than the number of holders of record and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Dividend Policy We have never declared or paid any cash dividend on our common stock.
The actual number of stockholders is greater than the number of holders of record and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Dividend Policy DocuSign, Inc.| 2024 Form 10-K | 41 We have never declared or paid any cash dividend on our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK Market Price of our Common Stock Our common stock is traded on The Nasdaq Global Select Market under the symbol DOCU. Holders of our Common Stock As of February 28, 2023, there were 78 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK Market Price of our Common Stock Our common stock is traded on The Nasdaq Global Select Market under the symbol DOCU. Holders of our Common Stock As of February 29, 2024, there were 84 holders of record of our common stock.
As of January 31, 2023, the approximate dollar value of shares that may yet be purchased under the stock repurchase program was $137.0 million. See Note 11 of this Annual Report on Form 10-K for additional information related to stock repurchases. ITEM 6. Reserved DocuSign, Inc.| 2023 Form 10-K | 40
As of January 31, 2024, the approximate dollar value of shares that may yet be purchased under the stock repurchase program was $291.5 million. See Note 1 0 of this Annual Report on Form 10-K for additional information related to stock repurchases. ITEM 6. Reserved
The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Index and the S&P 500 Information Technology Index. The graph assumes $100 was invested in our common stock at the market close on April 27, 2018, the date our stock commenced trading on the Nasdaq Global Select Market.
The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the S&P 500 Index and the S&P 500 Information Technology Index for the five years ended January 31, 2024.
Added
The graph assumes $100 was invested on January 31, 2019, in our common stock and in each of the S&P 500 Index and the S&P 500 Information Technology Index. Data for the S&P 500 Index and the S&P 500 Information Technology Index assume reinvestment of dividends.
Added
In September 2023, our board of directors authorized an increase to our existing stock repurchase program for an additional amount of up to $300.0 million of our outstanding common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

72 edited+14 added−12 removed55 unchanged
Biggest changeDocuSign, Inc.| 2023 Form 10-K | 52 Reconciliation of gross profit (loss) and gross margin: Year Ended January 31, (in thousands) 2023 2022 2021 GAAP gross profit $ 1,979,827 $ 1,640,762 $ 1,088,989 Add: Stock-based compensation 72,674 58,499 42,658 Add: Amortization of acquisition-related intangibles 9,613 11,670 11,052 Add: Employer payroll tax on employee stock transactions 2,184 7,524 5,904 Add: Lease-related impairment and lease-related charges 1,090 — — Non-GAAP gross profit $ 2,065,388 $ 1,718,455 $ 1,148,603 GAAP gross margin 79 % 78 % 75 % Non-GAAP adjustments 3 % 4 % 4 % Non-GAAP gross margin 82 % 82 % 79 % GAAP subscription gross profit $ 2,016,100 $ 1,693,611 $ 1,121,405 Add: Stock-based compensation 46,916 31,152 20,793 Add: Amortization of acquisition-related intangibles 9,613 11,670 11,052 Add: Employer payroll tax on employee stock transactions 1,393 3,703 2,862 Add: Lease-related impairment and lease-related charges 447 — — Non-GAAP subscription gross profit $ 2,074,469 $ 1,740,136 $ 1,156,112 GAAP subscription gross margin 83 % 83 % 81 % Non-GAAP adjustments 2 % 2 % 3 % Non-GAAP subscription gross margin 85 % 85 % 84 % GAAP professional services and other gross loss $ (36,273) $ (52,849) $ (32,416) Add: Stock-based compensation 25,758 27,347 21,865 Add: Employer payroll tax on employee stock transactions 791 3,821 3,042 Add: Lease-related impairment and lease-related charges 643 — — Non-GAAP professional services and other gross loss $ (9,081) $ (21,681) $ (7,509) GAAP professional services and other gross margin (49) % (76) % (45) % Non-GAAP adjustments 37 % 45 % 35 % Non-GAAP professional services and other gross margin (12) % (31) % (10) % Reconciliation of income (loss) from operations and operating margin: Year Ended January 31, (in thousands) 2023 2022 2021 GAAP loss from operations $ (88,031) $ (61,884) $ (173,855) Add: Stock-based compensation 533,100 408,542 286,877 Add: Amortization of acquisition-related intangibles 20,706 24,770 25,618 Add: Employer payroll tax on employee stock transactions 12,921 42,192 34,042 Add: Acquisition-related expenses — 387 7,962 Add: Restructuring and other related charges 28,335 — — Add: Executive transition costs 2,634 — — Add: Lease-related impairment and lease-related charges 7,181 5,099 — Non-GAAP income from operations $ 516,846 $ 419,106 $ 180,644 GAAP operating margin (3) % (3) % (12) % Non-GAAP adjustments 24 % 23 % 24 % Non-GAAP operating margin 21 % 20 % 12 % DocuSign, Inc.| 2023 Form 10-K | 53 Reconciliation of net income (loss): Year Ended January 31, (in thousands, except per share data) 2023 2022 2021 GAAP net income (loss) $ (97,454) $ (69,976) $ (243,267) Add: Stock-based compensation 533,100 408,542 286,877 Add: Amortization of acquisition-related intangibles 20,706 24,770 25,618 Add: Employer payroll tax on employee stock transactions 12,921 42,192 34,042 Add: Acquisition-related expenses — 387 7,962 Add: Amortization of debt discount and issuance costs 4,970 5,098 28,001 Add: Loss on extinguishment of debt — — 33,752 Add: Tax expense related to intercompany IP transfer (1) — — 9,294 Add: Restructuring and other related charges 28,335 — — Add: Executive transition costs 2,634 — — Add: Lease-related impairment and lease-related charges 7,181 5,099 — Less: Fair value adjustments to strategic investments 3,689 (5,270) — Add: Income Tax effect of non-GAAP adjustments (2) (97,158) — — Non-GAAP net income $ 418,924 $ 410,842 $ 182,279 (1) Represents net change in tax liabilities related to an intercompany IP transfer (2) Represents the income tax adjustment using our estimated non-GAAP tax rate of 20%.
Biggest changeDocuSign, Inc.| 2024 Form 10-K | 55 Reconciliation of gross profit (loss) and gross margin: Year Ended January 31, (in thousands) 2024 2023 2022 GAAP gross profit $ 2,189,261 $ 1,979,827 $ 1,640,762 Add: Stock-based compensation 79,996 72,674 58,499 Add: Amortization of acquisition-related intangibles 8,857 9,613 11,670 Add: Employer payroll tax on employee stock transactions 2,262 2,184 7,524 Add: Lease-related impairment and lease-related charges 721 1,090 — Non-GAAP gross profit $ 2,281,097 $ 2,065,388 $ 1,718,455 GAAP gross margin 79 % 79 % 78 % Non-GAAP adjustments 4 % 3 % 4 % Non-GAAP gross margin 83 % 82 % 82 % GAAP subscription gross profit $ 2,226,803 $ 2,016,100 $ 1,693,611 Add: Stock-based compensation 51,660 46,916 31,152 Add: Amortization of acquisition-related intangibles 8,857 9,613 11,670 Add: Employer payroll tax on employee stock transactions 1,464 1,393 3,703 Add: Lease-related impairment and lease-related charges 505 447 — Non-GAAP subscription gross profit $ 2,289,289 $ 2,074,469 $ 1,740,136 GAAP subscription gross margin 83 % 83 % 83 % Non-GAAP adjustments 2 % 2 % 2 % Non-GAAP subscription gross margin 85 % 85 % 85 % GAAP professional services and other gross loss $ (37,542) $ (36,273) $ (52,849) Add: Stock-based compensation 28,336 25,758 27,347 Add: Employer payroll tax on employee stock transactions 798 791 3,821 Add: Lease-related impairment and lease-related charges 216 643 — Non-GAAP professional services and other gross loss $ (8,192) $ (9,081) $ (21,681) GAAP professional services and other gross margin (50) % (49) % (76) % Non-GAAP adjustments 39 % 37 % 45 % Non-GAAP professional services and other gross margin (11) % (12) % (31) % Reconciliation of income (loss) from operations and operating margin: Year Ended January 31, (in thousands) 2024 2023 2022 GAAP income (loss) from operations $ 31,634 $ (88,031) $ (61,884) Add: Stock-based compensation 611,835 533,100 408,542 Add: Amortization of acquisition-related intangibles 19,375 20,706 24,770 Add: Employer payroll tax on employee stock transactions 13,682 12,921 42,192 Add: Restructuring and other related charges 30,381 28,335 — Add: Lease-related impairment and lease-related charges 4,460 7,181 5,099 Add: Executive transition costs — 2,634 — Add: Acquisition-related expenses — — 387 Non-GAAP income from operations $ 711,367 $ 516,846 $ 419,106 GAAP operating margin 1 % (3) % (3) % Non-GAAP adjustments 25 % 24 % 23 % Non-GAAP operating margin 26 % 21 % 20 % DocuSign, Inc.| 2024 Form 10-K | 56 Reconciliation of net income (loss): Year Ended January 31, (in thousands, except per share data) 2024 2023 2022 GAAP net income (loss) $ 73,980 $ (97,454) $ (69,976) Add: Stock-based compensation 611,835 533,100 408,542 Add: Amortization of acquisition-related intangibles 19,375 20,706 24,770 Add: Employer payroll tax on employee stock transactions 13,682 12,921 42,192 Add: Amortization of debt discount and issuance costs 5,175 4,970 5,098 Add: Fair value adjustments to strategic investments 22 3,689 (5,270) Add: Restructuring and other related charges 30,381 28,335 — Add: Lease-related impairment and lease-related charges 4,460 7,181 5,099 Add: Executive transition costs — 2,634 — Add: Acquisition-related expenses — — 387 Add: Income Tax effect of non-GAAP adjustments (1) (136,023) (97,158) — Non-GAAP net income $ 622,887 $ 418,924 $ 410,842 (1) Represents the income tax adjustment using our estimated non-GAAP tax rate of 20%.
Our enterprise and commercial customers may start with just one use case and gradually implement additional use cases across their organization once they see the benefits of our software platform. Several of our largest enterprise customers have deployed our products for hundreds of use cases across their organizations.
Our enterprise and commercial customers may start with just one use case and gradually implement additional use cases across their organization once they see the benefits of our products. Several of our largest enterprise customers have deployed our software platform for hundreds of use cases across their organizations.
At that time, we would make adjustments to these potential future reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. Our estimate of the potential outcome of any uncertain tax position is subject to management's assessment of relevant risks, facts and circumstances existing at that time.
At that time, we would make adjustments to these potential future reserves when facts and circumstances change, such as the closing of a tax audit or when the refinement of an estimate is appropriate. Our estimate of the potential outcome of any uncertain tax position is subject to management's assessment of relevant risks, facts and circumstances existing at that time.
The period of benefit for commissions paid for the acquisition of the initial subscription contract is determined by considering our customer life and the technological life of our software platform and related significant features. The period of benefit for commissions on renewal subscription contracts is determined by considering the average contractual term for our renewal contracts.
The period of benefit for commissions paid for the acquisition of the initial subscription contract is determined by considering our customer life and the technological life of our software platform and related significant features. The period of benefit for commissions on renewal subscription contracts is determined by considering the weighted average contractual term for our renewal contracts.
Cash Flows from Financing Activities For the year ended January 31, 2023, cash used in financing activities of $98.3 million was primarily driven by $63.0 million used to repurchase 1.1 million shares of common stock at an average of $55.52 per share through our stock repurchase program which commenced in fiscal 2023, and $35.2 million payments for tax withholding on share settlements, net of proceeds associated with our equity plans.
For the year ended January 31, 2023, cash used in financing activities of $98.3 million was primarily driven by $63.0 million used to repurchase 1.1 million shares of common stock at an average of $55.52 per share through our stock repurchase program which commenced in fiscal 2023, and $35.2 million payments for tax withholding on share settlements, net of proceeds associated with our equity plans.
Cash Flows from Investing Activities For the year ended January 31, 2023, cash used in investing activities of $191.2 million was primarily driven by $109.8 million net purchases of marketable securities and $77.7 million purchases of property and equipment as we continued to invest in data center build outs to support our growing operations and capitalized software development projects.
For the year ended January 31, 2023, cash used in investing activities of $191.2 million was primarily driven by $109.8 million net purchases of marketable securities and $77.7 million purchases of property and equipment as we continued to invest in data center build outs to support our growing operations and capitalized software development projects.
Refer to Note 8 , Note 9 and Note 10 to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for more information. We do not have any special purpose entities and we do not engage in off-balance sheet financing arrangements.
Refer to Not e 7 , Not e 8 and Note 9 to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for more information. We do not have any special purpose entities and we do not engage in off-balance sheet financing arrangements.
We have experienced increased demand across multiple regions and are expanding our sales and marketing resources to capitalize on the potential growth of these markets. Additionally, we expect to continue to develop and enhance our strategic partnerships in key international markets as we grow internationally.
We have experienced increased demand across multiple regions and are focusing our sales and marketing resources to capitalize on the potential growth of these markets. Additionally, we expect to continue to develop and enhance our strategic partnerships in key international markets as we grow internationally.
We expect to continue to incur operating losses for the foreseeable future due to the investments we intend to make and may require additional capital resources to execute strategic initiatives to grow our business. We typically invoice our customers annually in advance.
We may continue to incur operating losses in the foreseeable future due to the investments we intend to make and may require additional capital resources to execute strategic initiatives to grow our business. We typically invoice our customers annually in advance.
We define commercial customers to include both mid-market companies, which includes companies outside the Global 2000 that have greater than 250 employees, and medium-sized businesses, or SMBs, which are companies with between 10 and 249 employees, in each case excluding any enterprise customers. We define VSBs as companies with fewer than 10 employees.
We define commercial customers to include both mid-market companies, which includes companies outside the Global 2000 that have greater than 250 employees, and medium-sized businesses (“SMBs”) which are companies with between 10 and 249 employees, in each case excluding any enterprise customers. We define VSBs as companies with fewer than 10 employees.
DocuSign, Inc.| 2023 Form 10-K | 49 Critical Accounting Policies and Estimates W e prepare our financial statements in accordance with generally accepted accounting principles (“GAAP”). Preparing these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis.
DocuSign, Inc.| 2024 Form 10-K | 52 Critical Accounting Policies and Estimates W e prepare our financial statements in accordance with generally accepted accounting principles (“GAAP”). Preparing these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis.
DocuSign, Inc.| 2023 Form 10-K | 50 We recognize compensation expense net of forfeitures that are estimated at the time of grant based on historical experience and our expectations regarding future pre-vesting termination behavior of employees and revise in subsequent periods if actual forfeitures differ from those estimates.
DocuSign, Inc.| 2024 Form 10-K | 53 We recognize compensation expense net of forfeitures that are estimated at the time of grant based on historical experience and our expectations regarding future pre-vesting termination behavior of employees and revise in subsequent periods if actual forfeitures differ from those estimates.
As of January 31, 2023, we had $1.0 billion in cash and cash equivalents and short-term investments. We also had $186.0 million in long-term investments that provide additional capital resources. We finance our operations primarily through payments by our customers for use of our product offerings and related services and through debt financing.
As of January 31, 2024, we had $1.0 billion in cash and cash equivalents and short-term investments. We also had $122.0 million in long-term investments that provide additional capital resources. We finance our operations primarily through payments by our customers for use of our product offerings and related services and through debt financing.
Sales and Marketing Expense Sales and marketing expense consists primarily of personnel costs, including sales commissions. These expenses also include expenditures related to advertising, marketing, promotional events and brand awareness activities, as well as allocated overhead costs. We expect sales and marketing expense to continue to increase in absolute dollars as we enhance our product offerings and implement marketing strategies.
These expenses also include expenditures related to advertising, marketing, promotional events and brand awareness activities, as well as allocated overhead costs. We expect sales and marketing expense to continue to increase in absolute dollars as we enhance our product offerings and implement marketing strategies. Research and Development Expense Research and development expense consists primarily of personnel costs.
DocuSign, Inc.| 2023 Form 10-K | 51 Non-GAAP Financial Measures and Other Key Metrics To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance.
DocuSign, Inc.| 2024 Form 10-K | 54 Non-GAAP Financial Measures and Other Key Metrics To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance.
We generally have standalone value for our professional services and recognize revenue based on standalone selling price as services are performed or upon completion of services for fixed fee contracts. Other revenue includes amounts derived from sales of on-premises solutions.
We price professional services on a time and materials basis and on a fixed fee basis. We generally have standalone value for our professional services and recognize revenue based on standalone selling price as services are performed or upon completion of services for fixed fee contracts. Other revenue includes amounts derived from sales of on-premises solutions.
We generate substantially all our revenue from sales of subscriptions, which accounted for 97%, 97% and 95% of our revenue in the years ended January 31, 2023, 2022 and 2021. Our subscription fees include the use of our products and access to customer support.
We generate substantially all our revenue from sales of subscriptions, which accounted for 97% of our revenue in each of the years ended January 31, 2024, 2023 and 2022. Our subscription fees include the use of our products and access to customer support.
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin and non-GAAP net income : We define these non-GAAP financial measures as the respective GAAP measures, excluding expenses related to stock-based compensation, employer payroll tax on employee stock transactions, amortization of acquisition-related intangibles, amortization of debt discount and issuance costs, acquisition-related expenses, loss on extinguishment of debt, fair value adjustments to strategic investments, executive transition costs, lease-related impairment and lease-related charges, restructuring and other related charges, tax impact related to an intercompany IP transfer and, as applicable, other special items.
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin and non-GAAP net income : We define these non-GAAP financial measures as the respective GAAP measures, excluding expenses related to stock-based compensation, employer payroll tax on employee stock transactions, amortization of acquisition-related intangibles, amortization of debt discount and issuance costs, acquisition-related expenses, fair value adjustments to strategic investments, executive transition costs, lease-related impairment and lease-related charges, restructuring and other related charges and, as applicable, other special items.
We believe that our sources of liquidity, including our cash, cash equivalents and investments, and expected future operating cash flows, and borrowing capacity available to us from our credit facility, are adequate to meet the potential cash commitments for the foreseeable future, including upcoming maturities in the next 12 months related to our 2023 Notes and 2024 Notes as well as other lease obligations.
We believe that our sources of liquidity, including our cash, cash equivalents and investments, and expected future operating cash flows, and borrowing capacity available to us from our credit facility, are adequate to meet the potential cash commitments for the foreseeable future, including upcoming maturities in the next 12 months related to our lease obligations.
We believe there is significant expansion opportunity with our customers following their initial adoption of our software platform. Increasing International Revenue Our international revenue represented 25%, 23% and 20% of our total revenue in each of the years ended January 31, 2023, 2022, and 2021, respectively.
We believe there is significant expansion opportunity with our customers following their initial adoption of our software platform. Increasing International Revenue Our international revenue represented 26%, 25% and 23% of our total revenue in each of the years ended January 31, 2024, 2023, and 2022.
For example, in Europe, we offer Standards-Based Signature (“SBS”) technology tailored for eIDAS. SBS supports signatures that involve digital certificates, including those specified in the EU’s eIDAS regulations for advanced and qualified electronic signatures.
For example, in Europe, we offer SBS technology tailored for the EU’s eIDAS regulations. SBS supports signatures that involve digital certificates, including those specified in the EU’s eIDAS regulations for advanced and qualified electronic signatures.
The increase was primarily due to the expansion of existing customers and the addition of new customers, as well as an increase in sales to our mid-market and enterprise customers through our direct and indirect go-to-market initiatives.
The increase was primarily due to the expansion of revenue from existing customers and the addition of new customers, as well as an increase in sales to our commercial and enterprise customers through our direct and indirect go-to-market initiatives.
In January 2021 we entered into a $500.0 million credit facility, which may be increased by an additional $250.0 million subject to customary terms and conditions. The credit facility is available for five years until January 11, 2026 to optimize our capital structure and strengthen our balance sheet.
In January 2021 we entered into a $500.0 million credit facility, as amended in May 2023, which may be increased by an additional $250.0 million subject to customary terms and conditions. The credit facility is available until January 11, 2026 to optimize our capital structure and strengthen our balance sheet.
While we generated positive cash flows from operations in the recent years, we have generated losses from operations in the past as reflected in our accumulated deficit of $1.6 billion as of January 31, 2023.
While we generated positive cash flows from operations in the recent years, we have generated losses from operations in the past as reflected in our accumulated deficit of $1.7 billion as of January 31, 2024.
DocuSign, Inc.| 2023 Form 10-K | 42 We believe there is a substantial opportunity for us to increase our international customer base by leveraging and expanding investments in our technology, direct sales force and strategic partnerships around the world, as well as helping existing U.S.-based customers manage agreements across their international businesses.
We believe there is a substantial opportunity for us to increase our international customer base by leveraging and expanding investments in our technology, direct sales force and strategic partnerships around the world, as well as helping existing U.S.-based customers manage agreements across their international businesses.
Further details of these transactions are described in Note 8 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K. We were in compliance with all debt covenants at January 31, 2023.
Further details of these transactions are described in Not e 7 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K. We were in compliance with all debt covenants at January 31, 2024.
There were no outstanding borrowings under the credit facility as of January 31, 2023. In September 2018, we issued and sold $575.0 million in aggregate principal amount of 0.5% Convertible Senior Notes due 2023 (the “2023 Notes”), of which $37.1 million remains unpaid as of January 31, 2023 .
There were no outstanding borrowings under the credit facility as of January 31, 2024. In September 2018, we issued and sold $575.0 million in aggregate principal amount of 0.5% Convertible Senior Notes due 2023 (the “2023 Notes”).
Estimating a non-GAAP tax rate of 20%, the income tax effect of non-GAAP adjustments was $79.7 million for the year ended January 31, 2022 and $32.9 million for the year ended January 31, 2021.
Estimating a non-GAAP tax rate of 20%, the income tax effect of non-GAAP adjustments was $79.7 million for the year ended January 31, 2022.
As of January 31, 2023, we had a total of over 1.3 million customers, including over 211,000 enterprise and commercial customers, compared to over 1.1 million customers and over 170,000 enterprise and commercial customers as of January 31, 2022. We define enterprise customers as companies generally included in the Global 2000.
As of January 31, 2024, we had a total of over 1.5 million customers, including approximately 242,000 enterprise and commercial customers, compared to over 1.3 million customers and approximately 211,000 enterprise and commercial customers as of January 31, 2023. We define enterprise customers as companies generally included in the Global 2000.
We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment, for operational expenses, investment in our business and to make acquisitions.
Free cash flow : We define free cash flow as net cash provided by operating activities less purchases of property and equipment. We believe free cash flow is an important liquidity measure of the cash that is available (if any), after purchases of property and equipment, for operational expenses, investment in our business and to make acquisitions.
Obligations and Commitments Our principal contractual obligations and commitments consist of obligations under the Notes (including principal and coupon interest), operating leases, as well as noncancelable contractual commitments that primarily relate to cloud infrastructure support and sales and marketing activities .
Obligations and Commitments Our principal contractual obligations and commitments consist of operating leases, as well as noncancelable contractual commitments that primarily relate to cloud infrastructure support and sales and marketing activities .
The number of our customers with greater than $300,000 in annualized contract value has increased from 852 customers as of January 31, 2022 to 1,080 customers as of January 31, 2023. Each of our customer types has a different purchasing pattern.
The number of our customers with greater than $300,000 in annualized contract value was 1,060 customers as of January 31, 2024 compared to 1,080 customers as of January 31, 2023. Each of our customer types has a different purchasing pattern.
Investing for Growth We believe that our market opportunity is large, and we plan to invest to support further growth. This includes optimizing our go-to-market efforts to focus on attractive growth opportunities and investing in research and development to drive product innovation and meet customer needs at scale. We also continue to assess and evaluate strategic acquisitions and investments.
This includes optimizing our go-to-market efforts to focus on attractive growth opportunities and investing in research and development to drive product innovation and meet customer needs at scale. We also continue to assess and evaluate strategic acquisitions and investments.
As we focus on infrastructure and technology that best serve our customers across industries, we will prioritize initiatives that accelerate our product capabilities. We believe these collective activities will lead to continued expansion within our current customers’ organizations and attract new customers.
As we focus on infrastructure and technology that best serve our customers across industries, we will prioritize initiatives that accelerate our product capabilities and expand our product solutions. We believe these collective activities will help us retain and expand within our current customers’ organizations and attract new customers.
In January 2021, we issued and sol d $690.0 million in aggregate principal amount of 0% Convertible Senior Notes due 2024 (the “2024 Notes”).
In January 2021, we issued and sol d $690.0 million in aggregate principal amount of 0% Convertible Senior Notes due 2024 (the “2024 Notes”). We fully settled the outstanding principal of the 2023 Notes and 2024 Notes and during the year ended January 31, 2024.
Subscriptions generally range from one to three years, and substantially all our multi-year customers pay in annual installments, one year in advance. We also generate revenue from professional and other non-subscription services, which consists primarily of fees associated with providing new customers deployment and integration services. Other revenue includes amounts derived from sales of on-premises solutions.
Subscriptions generally range from one to three years, and substantially all our multi-year customers pay in annual installments, one year in advance. DocuSign, Inc.| 2024 Form 10-K | 43 We also generate revenue from professional and other non-subscription services, which consists primarily of fees associated with providing new customers deployment and integration services.
Components of Results of Operations Revenue We derive revenue primarily from the sale of subscriptions and, to a lesser extent, professional services. Subscription Revenue Subscription revenue consists of fees for the use of our software platform and our technical infrastructure and access to customer support, which includes phone or email support. We typically invoice customers annually in advance.
DocuSign, Inc.| 2024 Form 10-K | 45 Components of Results of Operations Revenue We derive revenue primarily from the sale of subscriptions and, to a lesser extent, professional services. Subscription Revenue Subscription revenue consists of fees for the use of our software platform and our technical infrastructure and access to customer support, which includes phone or email support.
We recognize subscription revenue ratably over the term of the contract subscription period beginning on the date access to our software platform is provided. Professional Services and Other Revenue Professional services revenue includes fees associated with new customers requesting deployment and integration services. We price professional services on a time and materials basis and on a fixed fee basis.
We typically invoice customers annually in advance. We recognize subscription revenue ratably over the term of the contract subscription period beginning on the date access to our software platform is provided. Professional Services and Other Revenue Professional services revenue includes fees associated with new customers requesting deployment and integration services.
Operating Expenses Our operating expenses consist of sales and marketing, research and development and general and administrative expenses. As our revenues continue to increase, our operating expenses as a percentage of revenue may increase or decrease at different rates, driven by the timing of revenue recognition, the timing of hiring, our investments in growth and other factors.
As our revenues continue to increase, our operating expenses as a percentage of revenue may increase or decrease at different rates, driven by the timing of revenue recognition, the timing of hiring, our investments in growth and other factors. Sales and Marketing Expense Sales and marketing expense consists primarily of personnel costs, including sales commissions.
Research and Development Expense Research and development expense consists primarily of personnel costs. These expenses also include non-personnel costs, such as subcontracting, consulting and professional fees for third-party development resources, as well as allocated overhead costs. Our research and development efforts focus on maintaining and enhancing existing functionality and adding new functionality.
These expenses also include non-personnel costs, such as subcontracting, consulting and professional fees for third-party development resources, as well as allocated overhead costs. Our research and development efforts focus on maintaining and enhancing existing functionality and adding new functionality. We expect research and development expense to increase in absolute dollars as we invest in the enhancement of our software platform.
Cost of Professional Services and Other Revenue Cost of professional services and other revenue consists primarily of personnel costs for our professional services delivery team, travel-related costs and allocated overhead costs. DocuSign, Inc.| 2023 Form 10-K | 43 Gross Profit and Gross Margin Gross profit is total revenue less total cost of revenue.
Cost of Professional Services and Other Revenue Cost of professional services and other revenue consists primarily of personnel costs for our professional services delivery team, travel-related costs and allocated overhead costs. Gross Profit and Gross Margin Gross profit is total revenue less total cost of revenue. Gross margin is gross profit expressed as a percentage of total revenue.
DocuSign, Inc.| 2023 Form 10-K | 48 Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended January 31, (in thousands) 2023 2022 Net cash provided by (used in): Operating activities $ 506,759 $ 506,467 Investing activities (191,197) (162,909) Financing activities (98,256) (394,621) Effect of foreign exchange on cash, cash equivalents and restricted cash (3,784) (5,594) Net change in cash, cash equivalents and restricted cash $ 213,522 $ (56,657) Cash Flows from Operating Activities Cash provided by operating activities increased to $506.8 million for the year ended January 31, 2023 from $506.5 million for the year ended January 31, 2022.
DocuSign, Inc.| 2024 Form 10-K | 51 Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended January 31, (in thousands) 2024 2023 Net cash provided by (used in): Operating activities $ 979,526 $ 506,759 Investing activities 44,612 (191,197) Financing activities (946,039) (98,256) Effect of foreign exchange on cash, cash equivalents and restricted cash 199 (3,784) Net change in cash, cash equivalents and restricted cash $ 78,298 $ 213,522 Cash Flows from Operating Activities Cash provided by operating activities was $979.5 million for the year ended January 31, 2024.
Executive Overview of Fiscal 2023 Results Overview DocuSign is the global leader in the eSignature category. We offer products that address broader agreement workflows and digital transformation, enabling agreements to be signed electronically on a wide variety of devices, from virtually anywhere in the world, securely.
Executive Overview of Fiscal 2024 Results Overview DocuSign offers products that address agreement workflows and digital transformation as part of its agreement management platform, enabling agreements to be signed electronically on a wide variety of devices, from virtually anywhere in the world, securely.
We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2023, we determined the projected non-GAAP tax rate to be 20%. Free cash flow : We define free cash flow as net cash provided by operating activities less purchases of property and equipment.
We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2023 and fiscal 2024, we have determined the projected non-GAAP tax rate to be 20%.
Sales and Marketing Year Ended January 31, 2023 vs 2022 (in thousands) 2023 2022 Sales and marketing $ 1,242,711 $ 1,076,527 15 % Percentage of revenue 49 % 51 % Sales and marketing expenses decreased as a percentage of revenue due to savings on personnel costs from the restructuring plan implemented during the third quarter of fiscal 2023 and shifts in the allocation of resources for our go-to-market initiatives.
Sales and Marketing Year Ended January 31, 2024 vs 2023 (in thousands) 2024 2023 Sales and marketing $ 1,168,137 $ 1,242,711 (6) % Percentage of revenue 42 % 49 % Sales and marketing expenses decreased $74.6 million, or 6%, in the year ended January 31, 2024, primarily driven by savings on personnel costs from the restructuring plans implemented during the third quarter of fiscal 2023 and the first quarter of fiscal 2024 as well as shifts in the allocation of resources for our go-to-market initiatives.
Computation of free cash flow: Year Ended January 31, (in thousands) 2023 2022 2021 Net cash provided by operating activities $ 506,759 $ 506,467 $ 296,954 Less: Purchases of property and equipment (77,654) (61,396) (82,395) Non-GAAP free cash flow $ 429,105 $ 445,071 $ 214,559 Net cash (used in) provided by investing activities $ (191,197) $ (162,909) $ 81,229 Net cash used in financing activities $ (98,256) $ (394,621) $ (58,976) Computation of billings: Year Ended January 31, (in thousands) 2023 2022 2021 Revenue $ 2,515,915 $ 2,107,213 $ 1,453,047 Add: Contract liabilities and refund liability, end of period 1,191,269 1,049,106 800,940 Less: Contract liabilities and refund liability, beginning of period (1,049,106) (800,940) (522,201) Add: Contract assets and unbilled accounts receivable, beginning of period 18,273 21,021 15,082 Less: Contract assets and unbilled accounts receivable, end of period (16,615) (18,273) (21,021) Add: Contract assets and unbilled accounts receivable contributed by acquisitions — — 6,589 Less: Contract liabilities and refund liability contributed by acquisitions — — (9,344) Non-GAAP billings $ 2,659,736 $ 2,358,127 $ 1,723,092 DocuSign, Inc.| 2023 Form 10-K | 54
Computation of free cash flow: Year Ended January 31, (in thousands) 2024 2023 2022 Net cash provided by operating activities $ 979,526 $ 506,759 $ 506,467 Less: Purchases of property and equipment (92,391) (77,654) (61,396) Non-GAAP free cash flow $ 887,135 $ 429,105 $ 445,071 Net cash provided by (used in) investing activities $ 44,612 $ (191,197) $ (162,909) Net cash used in financing activities $ (946,039) $ (98,256) $ (394,621) Computation of billings: Year Ended January 31, (in thousands) 2024 2023 2022 Revenue $ 2,761,882 $ 2,515,915 $ 2,107,213 Add: Contract liabilities and refund liability, end of period 1,343,792 1,191,269 1,049,106 Less: Contract liabilities and refund liability, beginning of period (1,191,269) (1,049,106) (800,940) Add: Contract assets and unbilled accounts receivable, beginning of period 16,615 18,273 21,021 Less: Contract assets and unbilled accounts receivable, end of period (20,189) (16,615) (18,273) Non-GAAP billings $ 2,910,831 $ 2,659,736 $ 2,358,127 DocuSign, Inc.| 2024 Form 10-K | 57
Periodically, we evaluate these factors and review whether events or changes in circumstances have occurred that could impact the period of benefit. Any future changes in circumstances around our customer life and average contractual terms of renewal contracts may materially change the periods of benefit and therefore the amortization amounts recognized in our consolidated statement of operations and comprehensive loss.
Any future changes in circumstances around our customer life and weighted average contractual terms of renewal contracts may materially change the periods of benefit and therefore the amortization amounts recognized in our consolidated statement of operations and comprehensive income (loss).
DocuSign, Inc.| 2023 Form 10-K | 45 Cost of Revenue and Gross Margin Year Ended January 31, 2023 vs 2022 (in thousands) 2023 2022 Cost of revenue: Subscription $ 426,077 $ 343,661 24 % Professional services and other 110,011 122,790 (10) % Total cost of revenue $ 536,088 $ 466,451 15 % Gross margin: Subscription 83 % 83 % — pts Professional services and other (49) % (76) % 27 pts Total gross margin 79 % 78 % 1 pts Cost of subscription revenue increased $82.4 million, or 24% in the year ended January 31, 2023, primarily driven by higher costs to support our growing customer base.
DocuSign, Inc.| 2024 Form 10-K | 48 Cost of Revenue and Gross Margin Year Ended January 31, 2024 vs 2023 (in thousands) 2024 2023 Cost of revenue: Subscription $ 459,905 $ 426,077 8 % Professional services and other 112,716 110,011 2 % Total cost of revenue $ 572,621 $ 536,088 7 % Gross margin: Subscription 83 % 83 % — pts Professional services and other (50) % (49) % (1) pts Total gross margin 79 % 79 % — pts Cost of subscription revenue increased $33.8 million, or 8%, in the year ended January 31, 2024, primarily driven by higher costs to support our growing customer base.
Cash provided by operating activities is primarily driven by the timing of customer collections. In the year ended January 31, 2023, we experienced a decrease in amounts billed to customers and recognized as contract liabilities, partially offset by increased collections of accounts receivable.
Cash provided by operating activities was $506.8 million for the year ended January 31, 2023. Cash provided by operating activities increased slightly due to increases in collections of accounts receivable and higher revenues, partially offset by a decrease in amounts billed to customers and recognized as contract liabilities.
We continue to invest in a variety of customer programs and initiatives, which, along with expanded customer use cases, have helped increase our subscription revenue over time. We expect subscription revenue to continue to increase as existing customers increase their usage across their organizations while we offer new functionality, develop new products and attract new customers.
We continue to invest in a variety of customer programs and initiatives, which, along with expanded customer use cases, have helped increase our subscription revenue over time.
DocuSign, Inc.| 2023 Form 10-K | 44 Discussion of Results of Operations The following table summarizes our historical consolidated statements of operations data: Year Ended January 31, (in thousands) 2023 As % of Revenue 2022 As % of Revenue Revenue: Subscription $ 2,442,177 97 % $ 2,037,272 97 % Professional services and other 73,738 3 69,941 3 Total revenue 2,515,915 100 2,107,213 100 Cost of revenue: Subscription 426,077 17 343,661 16 Professional services and other 110,011 4 122,790 6 Total cost of revenue 536,088 21 466,451 22 Gross profit 1,979,827 79 1,640,762 78 Operating expenses: Sales and marketing 1,242,711 49 1,076,527 51 Research and development 480,584 19 393,362 19 General and administrative 316,228 13 232,757 11 Restructuring and other related charges 28,335 1 — — Total operating expenses 2,067,858 82 1,702,646 81 Loss from operations (88,031) (3) (61,884) (3) Interest expense (6,389) (1) (6,443) — Interest income and other income, net 4,539 — 1,413 — Loss before provision for income taxes (89,881) (4) (66,914) (3) Provision for income taxes 7,573 — 3,062 — Net loss $ (97,454) (4) % $ (69,976) (3) % For a comparison of our results of operations for the fiscal years ended January 31, 2022 and 2021, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended January 31, 2022, filed with the SEC on March 25, 2022.
DocuSign, Inc.| 2024 Form 10-K | 47 Discussion of Results of Operations The following table summarizes our historical consolidated statements of operations data: Year Ended January 31, (in thousands) 2024 As % of Revenue 2023 As % of Revenue Revenue: Subscription $ 2,686,708 97 % $ 2,442,177 97 % Professional services and other 75,174 3 73,738 3 Total revenue 2,761,882 100 2,515,915 100 Cost of revenue: Subscription 459,905 17 426,077 17 Professional services and other 112,716 4 110,011 4 Total cost of revenue 572,621 21 536,088 21 Gross profit 2,189,261 79 1,979,827 79 Operating expenses: Sales and marketing 1,168,137 42 1,242,711 49 Research and development 539,488 20 480,584 19 General and administrative 419,621 15 316,228 13 Restructuring and other related charges 30,381 1 28,335 1 Total operating expenses 2,157,627 78 2,067,858 82 Income (loss) from operations 31,634 1 (88,031) (3) Interest expense (6,844) — (6,389) (1) Interest income and other income, net 68,889 2 4,539 — Income (loss) before provision for income taxes 93,679 3 (89,881) (4) Provision for income taxes 19,699 — 7,573 — Net income (loss) $ 73,980 3 % $ (97,454) (4) % For a comparison of our results of operations for the fiscal years ended January 31, 2023 and 2022, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended January 31, 2023, filed with the SEC on March 27, 2023.
Professional services and other revenue accounted for the remainder of total revenue. We anticipate continuing to invest in customer success through our professional services offerings as we believe it plays an important role in accelerating our customers’ adoption of our products, which helps drive customer retention and expansion.
We anticipate continuing to invest in customer success through our professional services offerings as we believe it plays an important role in accelerating our customers’ adoption of our products, which helps drive customer retention and expansion. We offer subscriptions to our products to businesses at all scales, from global enterprise down to local, VSBs.
Revenue Year Ended January 31, 2023 vs 2022 (in thousands) 2023 As % of Revenue 2022 As % of Revenue Revenue: Subscription $ 2,442,177 97 % $ 2,037,272 97 % 20 % Professional services and other 73,738 3 69,941 3 5 % Total revenue $ 2,515,915 100 % $ 2,107,213 100 % 19 % Subscription revenue increased $404.9 million, or 20%, in the year ended January 31, 2023.
Revenue Year Ended January 31, 2024 vs 2023 (in thousands) 2024 As % of Revenue 2023 As % of Revenue Revenue: Subscription $ 2,686,708 97 % $ 2,442,177 97 % 10 % Professional services and other 75,174 3 73,738 3 2 % Total revenue $ 2,761,882 100 % $ 2,515,915 100 % 10 % Subscription revenue increased $244.5 million, or 10%, in the year ended January 31, 2024.
VSBs tend to become customers quickly with very little to no direct sales or customer support interaction and generate smaller average contract values, while commercial and enterprise customers typically involve longer sales cycles, larger contract values and greater expansion opportunities for us.
VSBs typically become customers by quickly utilizing our digital and self-serve channels and generate smaller average contract values, while commercial and enterprise customers typically involve longer sales cycles, larger contract values and greater expansion opportunities for us.
Restructuring and Other Related Charges Restructuring and other related charges consist primarily of costs associated with restructuring plans approved by our Board of Directors.
We expect general and administrative expense to increase in absolute dollars to support the overall growth of our operations. Restructuring and Other Related Charges Restructuring and other related charges consist primarily of costs associated with restructuring plans approved by our board of directors.
DocuSign, Inc.| 2023 Form 10-K | 46 Research and Development Year Ended January 31, 2023 vs 2022 (in thousands) 2023 2022 Research and development $ 480,584 $ 393,362 22 % Percentage of revenue 19 % 19 % Research and development expenses increased $87.2 million, or 22%, in the year ended January 31, 2023, primarily due to investments in workforce and technology support to accommodate growth.
Research and Development Year Ended January 31, 2024 vs 2023 (in thousands) 2024 2023 Research and development $ 539,488 $ 480,584 12 % Percentage of revenue 20 % 19 % Research and development expenses increased $58.9 million, or 12%, in the year ended January 31, 2024, primarily due to investments in our workforce and product innovation.
General and Administrative Year Ended January 31, 2023 vs 2022 (in thousands) 2023 2022 General and administrative $ 316,228 $ 232,757 36 % Percentage of revenue 13 % 11 % General and administrative expenses increased $83.5 million, or 36%, in the year ended January 31, 2023, primarily due to investments in workforce and technology support to accommodate the operations and growth in our business.
DocuSign, Inc.| 2024 Form 10-K | 49 General and Administrative Year Ended January 31, 2024 vs 2023 (in thousands) 2024 2023 General and administrative $ 419,621 $ 316,228 33 % Percentage of revenue 15 % 13 % General and administrative expenses increased $103.4 million, or 33%, in the year ended January 31, 2024, primarily due to investments in workforce and information technology.
DocuSign, Inc.| 2023 Form 10-K | 41 Financial Results for the Year Ended January 31, 2023 (in thousands) Year Ended January 31, 2023 Total revenue $ 2,515,915 Total costs and expenses 2,603,946 Total stock-based compensation expense 538,726 Loss from operations (88,031) Net loss (97,454) Cash provided by operating activities 506,759 Capital expenditures (77,654) Cash, cash equivalents, restricted cash and investments were $1.2 billion as of January 31, 2023.
Financial Results for the Year Ended January 31, 2024 (in thousands) Year Ended January 31, 2024 Total revenue $ 2,761,882 Total costs and expenses 2,730,248 Total stock-based compensation expense 616,847 Income from operations 31,634 Net income 73,980 Cash provided by operating activities 979,526 Capital expenditures (92,391) Cash, cash equivalents, restricted cash and investments were $1.2 billion as of January 31, 2024.
DocuSign’s product offerings, including DocuSign eSignature, allow organizations to do business faster with less risk and lower costs, while providing better experiences for customers and employees. As a result, over 1.3 million customers and more than a billion users worldwide utilize DocuSign products to create, upload and send documents for multiple parties to sign electronically.
DocuSign’s core product offerings, including the world’s leading electronic signature product, allow organizations to do business faster with less risk and at a lower cost, while providing a better experience for customers. As a result, over 1.5 million customers and more than a billion users worldwide utilize our platform to accelerate and simplify the process of doing business.
We expect research and development expense to increase in absolute dollars as we invest in the enhancement of our software platform. General and Administrative Expense General and administrative expense consists primarily of employee-related costs for those employees providing administrative services such as legal, human resources, information technology related to internal systems, accounting and finance.
General and Administrative Expense General and administrative expense consists primarily of employee-related costs for those employees providing administrative services such as legal, human resources, information technology related to internal systems, accounting and finance. These expenses also include certain third-party consulting services, certain facilities costs, allocated overhead costs and lease-related charges.
Significant increases consisted of: • $41.4 million in stock-based compensation expense and $31.4 million in personnel costs due to higher average headcount and annual salary increases; and • $10.4 million due to higher information technology costs.
Increases primarily consisted of: • $34.2 million in stock-based compensation expense and $15.1 million in personnel costs due to annual merit increases; and • $11.9 million due to higher information technology costs to drive product innovation.
Key Factors Affecting Our Performance We believe that our future performance will depend on many factors, including the following: Growing Customer Base We are highly focused on continuing to acquire new customers to support our long-term growth.
Key Factors Affecting Our Performance We believe that our future performance will depend on many factors, including the following: Investing for Growth We believe that our market opportunity is large, and we plan to invest to support further growth.
Interest Expense and Loss on Extinguishment of Debt Interest expense consists primarily of contractual interest expense, amortization of discount and amortization of debt issuance costs on our Notes. The loss on extinguishment of debt consists of the difference between the fair value and the net carrying value of our Notes at settlement.
Interest Expense Interest expense consists primarily of contractual interest expense and amortization of debt issuance costs on our Convertible Senior Notes due 2023 and our Convertible Senior Notes due 2024 (collectively, the “Notes”).
We have invested, and expect to continue to invest in our go-to-market efforts involving a combination of direct sales, partner-assisted sales and digital self-service purchasing.
DocuSign, Inc.| 2024 Form 10-K | 44 Growing Customer Base We are highly focused on continuing to acquire new customers to support our long-term growth. We have invested, and expect to continue to invest in our go-to-market efforts involving an omnichannel approach that consists of direct sales, partner-assisted sales and digital self-service purchasing.
Provision for Income Taxes Our provision for income taxes consists primarily of income taxes in certain foreign jurisdictions where we conduct business, and tax benefits arising from deductions for stock-based compensation. We have a valuation allowance against our U.S. consolidated group and certain foreign deferred tax assets.
Provision for Income Taxes Our provision for income taxes consists primarily of income taxes in certain foreign jurisdictions where we conduct business and U.S. income taxes from a tax law change related to mandatory capitalization of research and development expenses for tax years starting January 1, 2022.
For the year ended January 31, 2022, cash provided by investing activities of $162.9 million was primarily driven by $93.4 million net purchases of marketable securities and $61.4 million purchases of property and equipment as we continued to invest in data center build outs to support our growing operations and capitalized software development projects.
The increase was partially offset by purchases of property and equipment of $92.4 million as we continue to support operations at our data centers and invest in capitalized software development projects.
There were no restructuring and other related charges in the year ended January 31, 2022. DocuSign, Inc.| 2023 Form 10-K | 47 Liquidity and Capital Resources Our principal sources of liquidity were cash, cash equivalents and investments as well as cash generated from operations.
The increase in the provision for income taxes in the current year is a result of higher pre-tax income and limitations on net operating losses allowed to reduce taxable income. DocuSign, Inc.| 2024 Form 10-K | 50 Liquidity and Capital Resources Our principal sources of liquidity were cash, cash equivalents and investments as well as cash generated from operations.
We offer more than 400 off-the-shelf, prebuilt integrations with the applications that many of our customers already use—including those offered by Google, Microsoft, Oracle, Salesforce, SAP, and ServiceNow—so that they can create, sign, send and manage agreements from directly within these applications.
We have an omnichannel go-to-market approach that consists of direct sales, partners to sell to our customers, and digital self-serve. We offer more than 900 active partner integrations with the applications that many of our customers already use so that they can create, commit, and manage agreements directly within these applications.
For the year ended January 31, 2022, cash used in financing activities of $394.6 million was primarily driven by $316.7 million payments for tax withholding on share settlements, net of proceeds associated with our equity plans. We also used $77.9 million for repayments of our 2023 Notes.
Cash Flows from Financing Activities For the year ended January 31, 2024, cash used in financing activities of $946.0 million was primarily driven by the maturity of the Notes, stock repurchase program, and payments related to our equity plans. We fully repaid the 2023 Notes and 2024 Notes during fiscal 2024 for $727.0 million.
Significant increases consisted of: • $29.2 million in personnel costs and $15.8 million in stock-based compensation expense primarily due to higher average headcount and annual salary increases; • $20.8 million in operating costs to support our platform and the growth in our revenue, including a $13.7 million increase in hosting costs and an $8.8 million increase in subscription reseller fees; • $10.1 million due to higher information technology costs; and • $5.7 million in depreciation and amortization, which reflects the impact of higher data center costs and capitalized software assets.
Increases primarily consisted of: • $13.3 million in operating costs to support our platform and revenue growth, including increases in hosting costs as well as processing and authentication costs; • $7.1 million due to higher information technology costs; and • $6.9 million in depreciation on our capitalized software projects.
Significant increases consisted of: • $33.4 million in stock-based compensation expense and $17.6 million in personnel costs due to higher average headcount and annual salary increases; • $23.4 million in professional fees due to increases in consultant fees to support the implementation of a new enterprise resource planning system, and legal and other fees; and • $7.8 million due to higher information technology costs.
Increases primarily consisted of: • $55.6 million in stock-based compensation expense driven by charges due to executive new hire grants and transitions and annual merit increases; • $27.8 million in personnel costs driven by annual salary increases to align with the increasing cost of labor; and • $11.4 million due to higher information technology costs.
We expect to maintain this valuation allowance for the foreseeable future or until it becomes more likely than not that the benefit of these U.S. and foreign deferred tax assets will be realized by way of expected future taxable income.
We have a valuation allowance against our U.S. consolidated group and certain foreign deferred tax assets and will release the valuation allowance when there is sufficient positive evidence to support a conclusion that it is more likely than not the deferred tax assets will be realized.
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We offer subscriptions to our products to businesses at all scales, from global enterprise down to local VSBs.
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Other revenue includes amounts derived from sales of on-premises solutions. Professional services and other revenue accounted for the remainder of total revenue in each of the years ended January 31, 2024, 2023 and 2022.
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We rely on our direct sales force and partnerships to sell to enterprises and commercial businesses, and our digital self-service channel to sell to all customers, but it’s primarily used by VSBs, which is the most cost-effective way to reach our smallest customers.
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DocuSign, Inc.| 2024 Form 10-K | 46 Operating Expenses Our operating expenses consist of sales and marketing, research and development, general and administrative, and restructuring and other related charges.
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Gross margin is gross profit expressed as a percentage of total revenue.
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Depending on our operating results in the future, we may release the valuation allowance associated with the U.S. deferred tax assets within the next year. The timing and amount of the valuation allowance release could vary based on our assessment of all available evidence.
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These expenses also include certain third-party consulting services, certain facilities costs, allocated overhead costs and impairment of operating lease right-of-use assets and other lease-related charges. We expect general and administrative expense to increase in absolute dollars to support the overall growth of our operations.
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Release of all, or a portion, of the valuation allowance would result in the recognition of certain deferred tax assets and may result in a material decrease to income tax expense for the period the release is recorded.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeHowever, we carry the Notes at face value less unamortized discount on our balance sheet and present the fair value for required disclosure purposes only. Foreign Currency Exchange Risk Our reporting currency is the U.S. dollar, and the functional currency of each of our subsidiaries is either its local currency or the U.S. dollar, depending on the circumstances.
Biggest changeForeign Currency Exchange Risk Our reporting currency is the U.S. dollar, and the functional currency of each of our subsidiaries is either its local currency or the U.S. dollar, depending on the circumstances. The assets and liabilities of each of our subsidiaries are translated into U.S. dollars at exchange rates in effect at each balance sheet date.
Gains or losses due to remeasurements of transactions denominated in foreign currencies are included in “Interest income and other income, net” in our consolidated statements of operations and comprehensive loss. We have not engaged in the hedging of foreign currency transactions to date, although we may choose to do so in the future.
Gains or losses due to remeasurements of transactions denominated in foreign currencies are included in “Interest income and other income, net” in our consolidated statements of operations and comprehensive income (loss). We have not engaged in the hedging of foreign currency transactions to date, although we may choose to do so in the future.
Our market risk exposure is primarily the result of fluctuations in foreign currency exchange and interest rates. Interest Rate Risk As of January 31, 2023, we had cash, cash equivalents and investments totaling $1.2 billion, which consisted primarily of bank deposits, money market funds, commercial paper, corporate notes and bonds and U.S. Treasury and government agency securities.
Our market risk exposure is primarily the result of fluctuations in foreign currency exchange and interest rates. Interest Rate Risk As of January 31, 2024, we had cash, cash equivalents and investments totaling $1.2 billion, which consisted primarily of bank deposits, money market funds, commercial paper, corporate notes and bonds and U.S. Treasury and government agency securities.
We do not believe that an immediate 10% increase or decrease in the relative value of the U.S. dollar to other currencies would have a material effect on our operating results. DocuSign, Inc.| 2023 Form 10-K | 55
We do not believe that an immediate 10% increase or decrease in the relative value of the U.S. dollar to other currencies would have a material effect on our operating results. DocuSign, Inc.| 2024 Form 10-K | 58
Interest-earning instruments carry a degree of interest rate risk. Our investment portfolio is composed of highly rated securities and limits the amount of credit exposure to any one issuer. A hypothetical 100 basis point increase in interest rates would result in an approximate $3.8 million decrease of the fair value of our investment portfolio as of January 31, 2023.
Interest-earning instruments carry a degree of interest rate risk. Our investment portfolio is composed of highly rated securities and limits the amount of credit exposure to any one issuer. A hypothetical 100 basis point increase in interest rates would result in an approximate $2.6 million decrease of the fair value of our investment portfolio as of January 31, 2024.
A strengthening or weakening of the U.S. dollar against the other currencies may negatively or positively affect our operating results as expressed in U.S. dollars. Foreign currency translation adjustments are accounted for as a component of “Accumulated other comprehensive loss” within “Stockholders’ equity”.
Operations accounts are translated using the average exchange rate for the relevant period. A strengthening or weakening of the U.S. dollar against the other currencies may negatively or positively affect our operating results as expressed in U.S. dollars. Foreign currency translation adjustments are accounted for as a component of “Accumulated other comprehensive loss” within “Stockholders’ equity”.
We had no exposure to changes in interest rates from debt obligations at January 31, 2023 as our 2023 Notes and 2024 Notes (the “Notes”) were issued at fixed rates of 0.5% and 0.0%, respectively. The fair value of the Notes changes when the market price of our stock fluctuates or interest rates change.
We had no exposure to changes in interest rates from the Notes as of January 31, 2024 since the Notes were extinguished during fiscal 2024.
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The assets and liabilities of each of our subsidiaries are translated into U.S. dollars at exchange rates in effect at each balance sheet date. Operations accounts are translated using the average exchange rate for the relevant period.
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Additionally, our revolving credit facility, which is undrawn as of January 31, 2024, can be borrowed based on floating interest rate indexes, thus exposing us to potential interest rate fluctuations should we decide to access the facility.

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