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What changed in DOCUSIGN, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of DOCUSIGN, INC.'s 2022 and 2023 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 2023 report.

+409 added−436 removedSource: 10-K (2023-03-27) vs 10-K (2022-03-25)

Top changes in DOCUSIGN, INC.'s 2023 10-K

409 paragraphs added · 436 removed · 299 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

73 edited+19 added−47 removed19 unchanged
Biggest changeIt 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. • 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 DocuSign, Inc.| 2022 Form 10-K | 9 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.
Biggest changeDocuSign, 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.
We believe the principal factors that drive competition between vendors in the future will include: • breadth and depth of innovative product-suite 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; • 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.
Engagement in 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.
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.
These programs create qualified sales opportunities and raise awareness of our leadership position in the global electronic signature and agreement-technology spaces. In addition to account-based marketing aimed directly at our high-value customers and industry-specific marketing by our industry vertical teams, we also deploy a range of other marketing strategies and tactics.
These programs create qualified sales opportunities and raise awareness of our leadership position in the global electronic signature and agreement-technology spaces. In addition to account-based marketing aimed directly at our high-value customers and industry-specific marketing by our industry vertical teams, we also deploy a range of other marketing strategies and tactics across the globe.
The web-based sales engine provides direct access to account plans with functionality to suit the needs of small businesses, sole proprietors and individuals. Marketing To support the sales team in reaching our broad range of potential customers, our integrated marketing programs address the specific needs of our different market segments.
Our digital sales engine provides direct access to account plans with functionality to suit the needs of small businesses, sole proprietors and individuals. Marketing To support the sales team in reaching our broad range of potential customers, our integrated marketing programs address the specific needs of our different market segments.
In addition, we seek to protect our intellectual property rights by requiring our employees and independent contractors involved in development of intellectual property on our behalf to enter into agreements acknowledging that all works or other intellectual property generated or conceived by them on our behalf are our property, and assigning to us any rights, including intellectual property rights, that they may claim or otherwise have in those works or property, to the extent allowable under applicable law.
In addition, we seek to protect our IP rights by requiring our employees, independent contractors and business partners involved in development of IP on our behalf to enter into agreements acknowledging that all works or other IP generated or conceived by them on our behalf are our property, and assigning to us any rights, including IP rights, that they may claim or otherwise have in those works or property, to the extent allowable under applicable law.
We actively seek to protect our global IP rights and to deter unauthorized use of our IP and other assets. We have obtained patents in the U.S. and other countries. As we expand our product offerings into new areas, we also seek to extend our patent development efforts to patent such products.
We actively seek to protect our global IP rights and to deter unauthorized use of our IP and other assets. We have obtained patents in the U.S. and other countries. As we expand our product offerings into new areas, we also seek to extend our patent coverage to such products.
Our industry-specific DocuSign Agreement Cloud 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: • Rooms for Real Estate provides a way for brokers and agents to manage the entire real estate transaction digitally.
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.
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.
These include broader digital demand generation campaigns; corporate communications and analyst relations; first-party events, such as DocuSign Momentum, our annual gathering of 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 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.
We intend to invest further in collaborating with these partners, especially those that are creating their own Agreement Cloud practices. ▪ Independent Software Vendors (“ISVs”) : We partner with a host of leading ISVs—including our strategic partners above as well as vertical-oriented partners like Ellie Mae and Guidewire—to help bring the power of the DocuSign Agreement Cloud 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 and AppDirect, enabling us to reach tens of thousands of resellers.
Because of the fast pace of innovation and product development, our products are often obsolete before the patents related to them expire, and in some cases may be obsolete before the patents are granted.
Because of the fast pace of innovation and product development, our products may become obsolete before the patents related to them expire, and in some cases may become obsolete before the patents are granted.
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.| 2022 Form 10-K | 15
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 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. • Invest in innovation and expansion of our DocuSign products.
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.
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.
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) automates 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 (“Contract Lifecycle Management”) orchestrates workflows across the entire agreement process.
We believe our systems and processes also exceed industry practices for data protection, transmission and secure storage—including being certified for the globally recognized security standard, ISO 27001, among many other important privacy and security certifications. • Highly available .
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.
Research and Development Since inception, we have invested in research and development (“R&D”) to build the world’s leading electronic signature solution and our DocuSign Agreement Cloud. Our product and engineering team is responsible for the design, development, testing and certification of our products.
Research and Development Since inception, we have invested in research and development (“R&D”) to innovate our product offerings, including the world’s leading electronic signature solution. Our product and engineering team is responsible for the design, development, testing and certification of our products.
In addition, the use of our products is associated with decreased paper use for our customers DocuSign, Inc.| 2022 Form 10-K | 13 and we specifically donate to forest-protection and other environmental impact causes. Since we launched DocuSign for Forests in 2019, we have committed over $2.5 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 $2.6 million to date to organizations doing critical work to preserve the world’s forests.
Sales Our go-to-market model involves a combination of direct sales, partner-assisted sales and web-based 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.
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.
Additionally, we match funds given by our employees to qualifying non-profits. We believe in promoting a culture of giving back and community support throughout our organization. As a company, we ensure that thousands of charitable organizations have the opportunity to use our products for free or at a discount every year.
We believe in promoting a culture of giving back and community support throughout our organization. As a company, we ensure that thousands of charitable organizations have the opportunity to use our products for free or at a discount every year.
By replacing manual, paper-driven processes with automated digital workflows, DocuSign can substantially reduce the time and labor necessary to complete agreements. In fiscal 2022, 79% of all transactions on our DocuSign eSignature platform were completed in less than 24 hours and 44% within 15 minutes.
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.
These DocuSign, Inc.| 2022 Form 10-K | 8 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 the DocuSign Agreement Cloud.
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.
Given that our offerings are designed to solve the needs of organizations of all sizes and across all industries and geographies, we sell to customer bases ranging from global enterprises to commercial businesses and nonprofits to small-to-medium-sized businesses (“SMBs”), VSBs and sole proprietors.
Given that our offerings are designed to solve the needs of organizations of all sizes and across all industries and geographies, we sell to customer bases ranging from global enterprises to sole proprietors.
There is no assurance that we will be able to obtain IP rights covering our own products, or that we will be able to obtain IP licenses from other companies on favorable terms or at all. For a discussion of IP-related risks, see "Risk Factors".
There is no assurance that we will be able to obtain IP rights covering our own products, or that we will be able to obtain IP licenses from other companies on favorable terms or at all. For a discussion of IP-related risks, see "Risk Factors". Corporate Information We were incorporated as DocuSign, Inc. in Washington in April 2003.
We expect to continue investing in research and development to enhance those products, as well as to develop new products that further augment the DocuSign Agreement Cloud. In addition, we expect to continue to use partnerships to offer new integrations and, in some cases, products for resale.
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.
We also believe the ability for prospects to easily try DocuSign eSignature from Docusign.com creates awareness that extends beyond the acquisition of new VSB customers. Customer support and success We believe that customer adoption, support and success are critical to serving and expanding our customer base.
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.
The DocuSign Agreement Cloud also includes several other applications for automating pre- and post-signature processes—for example, automatically generating an agreement from data in other systems, supporting negotiation workflow, verifying identities, assisting remote online notary, collecting payment after signatures, and using artificial intelligence (“AI”) to analyze a collection of agreements for risks and opportunities.
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.
Our value proposition is simple to understand: eliminate the paper, automate processes, and connect to other systems where work gets done. This allows organizations to reduce turnaround times and costs, largely eliminate errors, and deliver a streamlined customer experience. The DocuSign Agreement Cloud is our cloud software platform that automates and connects the entire agreement process.
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.
At every step of this digitalization 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 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.
We believe we compete favorably across these factors. For additional information, see “Risk Factors”. Intellectual Property We own and develop significant intellectual property (“IP”) and related IP rights around the world that support our products, services, R&D, and other activities and assets. Our IP portfolio includes patents, copyrights, trade secrets, trademarks and other rights.
We believe that we generally compete favorably on the basis of the factors listed above. Intellectual Property We own and develop significant intellectual property (“IP”) and related IP rights around the world that support our products, services, R&D, and other activities and assets. Our IP portfolio includes patents, copyrights, trade secrets, trademarks and other rights.
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 implement bias interrupters and understand the importance of building diverse slates of candidates and interviewers. • 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.
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.
These partnerships are multi-dimensional and involve joint investments, technology integrations, co-marketing agreements, membership in partner programs and go-to-market commitments. ▪ Systems integrators : We have strong partnerships with a number of global and regional systems integrators.
These partnerships are multi-dimensional and involve joint investments, technology integrations, co-marketing agreements, membership in partner programs and go-to-market commitments. ▪ Systems integrators : We have strong partnerships with a number of global and regional systems integrators. These relationships are important given that those firms act as strategic technology advisors to many large customers and prospects.
Different pricing structures apply to different DocuSign Agreement Cloud products. 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 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.
The information contained in, or accessible through, our website or any other websites referred to in this Annual Report on Form 10-K are not incorporated into this filing. Further, our references to website addresses are only as inactive textual references.
We merged with and into DocuSign, Inc., a Delaware corporation, in March 2015. Our website address is www.DocuSign.com. The information contained in, or accessible through, our website or any other websites referred to in this Annual Report on Form 10-K are not incorporated into this filing. Further, our references to website addresses are only as inactive textual references.
Our Customers As of January 31, 2022, we had over 1.1 million paying customers globally, serving the needs of some of the largest enterprises and governmental organizations down to sole proprietors and individual end users.
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.
Recognizing that our customers often depend on DocuSign for their day-to-day operations, we are committed to providing best-in-class availability. As such, we have delivered over 99.99% DocuSign eSignature availability to our customers and users worldwide ov er the past 12 months , and we have required no downtime or maintenance windows.
Recognizing that our customers often depend on DocuSign for their day-to-day operations, we are committed to providing best-in-class availability, with over 99.9% DocuSign eSignature availability to our customers and users over the past 12 months.
Finally, we have acquired and may continue to acquire additional capabilities and make investments in key technologies, such as our acquisitions of Seal Software (May 1, 2020) and Liveoak Technologies (July 6, 2020). • Strengthen and foster our developer community .
Finally, we have acquired and may continue to acquire additional capabilities and make investments in key technologies. • Strengthen and foster our developer community.
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, real estate, life sciences, and government. In some cases, these may be variants of a product like DocuSign eSignature—for example, our additional DocuSign eSignature options for assisting with compliance with U.S.
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.
Our DocuSign eSignature services are 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. We offer near real-time secure data replication and encrypted archival.
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.
We had approximately 69% 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 and we consider our relations with our employees to be positive.
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.
ITEM 1. BUSINESS Overview DocuSign offers the world’s leading electronic signature product, enabling an agreement to be signed electronically on a wide variety of devices, from virtually anywhere in the world, securely.
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.
Our go-to-market strategy leverages our direct sales force and partnerships to sell to enterprises and commercial businesses, and our web-based self-service channel to sell to VSBs, which is the most cost-effective way to reach our smallest customers.
Our go-to-market strategy leverages our direct sales force, digital motions and partnerships to sell to enterprises and commercial businesses, and our digital self-service channel to sell primarily to VSBs, which is the most cost-effective way to reach our smallest customers. We also employ tailored go-to-market strategies by industry verticals. We focus on bringing value to every function inside those verticals.
Our Products The DocuSign Agreement Cloud enables businesses to address each aspect of the agreement process, with solutions tailored for each step in the agreement lifecycle and, in some cases, for particular market segments, industries or geographic regions. We therefore focus on assembling the right mix of DocuSign Agreement Cloud products to address the specific needs of individual customers.
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.
For example, a biotech startup in San Francisco will have a different set of DocuSign Agreement Cloud products than a multinational European consumer packaged goods company. Key DocuSign Agreement Cloud 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.
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.
By expanding within an organization, we believe we can generate large amounts of incremental revenue through the addition of new users and Envelopes, plan upgrades, expansions, and additional offerings to other departments or business units. • Partner-assisted Sales : ▪ Global partners : We have partnerships with some of the world’s foremost technology providers—including Google, Microsoft, Oracle, Salesforce and SAP—that help us sell into a far greater number of accounts than we could do alone.
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.
We measure our employee satisfaction yearly through our fall engagement survey. At DocuSign, we believe in empowering employees so that they can do the work of their lives: we want everyone to be able to do challenging and meaningful work in an environment where each employee can be heard, exchange ideas openly, learn new skills and build lasting relationships.
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 also have partnerships with solution providers such as Deutsche Telekom and others that have expertise in specific vertical and regional markets, enabling us to add further value directly to those markets. • Web-based Sales : Through a strong presence that allows us to scale with low acquisition costs to individual users and small businesses around the world, we drive free 30-day trial and self-service solutions directly on our website.
Digital Sales: Through a strong presence that allows us to scale with low acquisition costs to individual users and small businesses around the world, we drive free 30-day trial and self-service solutions directly on our website, in our mobile applications and through use of our product itself.
For example, in fiscal 2021, we launched our Understanding Bias and Demonstrating Allyship workshop. • Community : DocuSign’s Employee Resource Groups provide employees a way to meet colleagues outside peer groups, 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 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.
Our Competition Our primary global competitor for DocuSign eSignature is currently Adobe, which began to offer an electronic signature solution following its acquisition of EchoSign in 2011 (now known as Adobe Sign). Other global software companies 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 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.
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. 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.
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 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 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.
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 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.
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.
For example, DocuSign eSignature replaces the hassle 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. As a result, we believe DocuSign drives the kind of experience and satisfaction that leads people to say they cannot imagine doing business any other way.
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.
This is true for every size of organization, in every industry, across every business function, worldwide. 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.
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.
Organizations that rely on manual, paper-based agreement processes may be prone to error and difficult to audit. Using the DocuSign Agreement Cloud, 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.
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.
No single customer accounted for more than 10% of our revenues in fiscal 2022. Sales, Marketing and Customer Success Our sales and marketing teams are focused on driving adoption and expanded use of DocuSign’s products by customers and prospects across North America, Europe, the Middle East, Africa, Australia, Southeast Asia, Japan and Latin America.
Sales, Marketing and Customer Success Our sales and marketing teams are focused on driving adoption and expanded use of DocuSign’s products by customers and prospects across the globe.
Also, AI technologies can help employees identify risks within large sets of existing agreements that would otherwise be impractical for manual review. 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.
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.
Especially with DocuSign eSignature, we are widely known for our ease of use and customer satisfaction. For example, as of March 2022, our DocuSign eSignature app had more than 447,000 ratings with an average score of 4.9 out of 5 stars on Apple's App Store. • Developer-friendly .
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.
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. We believe customers benefit from working with us in many ways, including: • Do business faster .
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.
We have several initiatives and strategies in place that reflect this commitment to our core values and our employees. As of January 31, 2022, we had 7,461 employees, of which approximately 67% were in sales, marketing and customer success, 20% in engineering, product development and customer operations and 13% in general and administrative.
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.
Our customers range from the largest global enterprises to sole proprietorships and nonprofits, across virtually all industries and around the world. Within a given organization, our technology can also be used broadly across business functions: contracts for sales, employment offers for human resources, and non-disclosure agreements for legal, among many others.
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.
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. • Simple to use . A key reason for our customer loyalty is our products’ usability.
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.
Our other products also contribute to faster turnaround times, such as less time spent creating new agreements or less time spent finding completed agreements that include certain legal rights or obligations. • Better customer and employee experience . Organizations that use DocuSign services internally and externally can deliver a simpler, better experience for their own customers and employees.
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 service protocols and operations are based on stringent global industry security standards. DocuSign’s platform maintains compliance with ISO27K (27001, 27017, 27018), PCI, and SSAE 18 standards. In addition, DocuSign’s eSignature and CLM products are FedRAMP-authorized. • High availability and enterprise-class manageability .
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.
This broad potential applicability drives our total addressable market for the DocuSign Agreement Cloud (including electronic signature) to be approximately $50 billion according to our estimates. To address this opportunity, our sales and marketing strategy focuses on businesses at all scales, from global enterprise to local very small businesses (“VSBs”).
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.
This infrastructure has enabled us to deliver over 99.99% availability to our DocuSign eSignature customers and users worldwide over th e past 12 months. • 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.
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.
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 EU’s electronic Identification, Authentication and Trust Services (“eIDAS”) regulations, as well as for verifying European eIDs. • Highly auditable .
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 will pursue this by augmenting our dedicated customer success team to identify and drive adoption of new use cases. • Accelerate international expansion . In the year ended January 31, 2022, we derived 23% of our revenue from customers outside the U.S.
In the year ended January 31, 2023, we derived 25% of our revenue from customers outside the U.S.
This is the foundation of the DocuSign Agreement Cloud, which allows organizations to do business faster with less risk, lower costs, while providing better experiences for customers and employees. Agreements are everywhere. In the regular course of doing business, organizations sign contracts, offer letters, and hundreds of other types of agreements with customers, employees, and business partners.
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.
It provides larger organizations the flexibility to model complex processes for generating, negotiating, acting on, and storing agreements. • Insight uses AI to search and analyze agreements by legal concepts and clauses.
It provides organizations the flexibility to automate complex processes for generating, negotiating, and storing agreements, as well as the ability to leverage AI-powered contract analytics to discover risks and opportunities hidden within agreements.
Our solutions engineers and technical experts can also design tailored solutions to help customers improve workflow and automate business processes. We offer in-depth expertise, proven best practices and repeatable delivery methodologies designed to ensure success, regardless of the complexity of the organization or technology environment.
Customer Success helps onboard customers by designing, integrating, training and deploying solutions that meet their needs. Our solutions engineers and technical experts can also design tailored solutions to help customers improve workflow and automate business processes.
For a number of use cases, such as buying a home, multiple Envelopes could be used. Our Technology, Infrastructure and Operations Our core technology platform stems from the extensive infrastructure necessary to support over 1.1 million DocuSign eSignature customers, including some of the world’s largest companies. Today, that platform increasingly underpins the broader DocuSign Agreement Cloud.
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.
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It starts with DocuSign eSignature, the world’s #1 electronic signature product.
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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.
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Finally, the DocuSign Agreement Cloud includes over 400 partner integrations with the world’s most popular businesses, so agreement processes can integrate with larger business processes and data where work happens. As of January 31, 2022, the DocuSign Agreement Cloud has over 1.1 million customers and more than a billion users in over 180 countries.
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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.
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We rely on our direct sales force and partnerships to sell to enterprises and commercial businesses, and our web-based self-service channel to sell to VSBs, which is the most cost-effective way to reach our smallest customers.
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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.
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In addition, our marketing and sales efforts often benefit from the fact that many of our prospective customers have had positive experiences using DocuSign eSignature—for example, they might have accepted a job offer or completed the purchase of a home.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition to the other risks described herein, factors that may affect our operating results or cause our financial results to fluctuate include the following: • fluctuations in demand for or pricing of our products and solutions, including due to the COVID-19 pandemic, competition, 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 the COVID-19 pandemic; • 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 ; • rising inflation and our ability to control costs, including our operating expenses; • our ability to continue operating remotely and to adapt to hybrid work arrangements combining remote and in-office work; • 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 time and costs related to litigation, including securities litigation; • issues relating to acquisitions and partnerships with third parties; • general economic, market, and industry conditions, including resulting from regional or global conflicts; • 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.
Biggest changeIn 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.
As a result, the following summary risks do not contain all of the information that may be important to you, and you should read them together with the more detailed discussion of risks set forth following this section under the heading “Risk Factors,” and with the other information in this Annual Report on Form 10-K.
As a result, the following summary risks do not contain all the information that may be important to you, and you should read them together with the more detailed discussion of risks set forth following this section under the heading “Risk Factors,” and with the other information in this Annual Report on Form 10-K.
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 customers, our employees, partners and service providers.
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.
In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.
In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries and our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.
Moreover, 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 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 corporate structure and associated transfer pricing policies contemplate future growth into international markets, and consider the functions, risks and assets of the various entities involved in the intercompany transactions. We may be subject to taxation in international jurisdictions with increasingly complex tax laws and precedents which could have an adverse effect on our liquidity and operating results.
Additionally, our corporate structure and associated transfer pricing policies contemplate future growth into international markets, and consider the functions, risks and assets of the various entities involved in the intercompany transactions. We may be subject to taxation in international jurisdictions with increasingly complex tax laws and precedents which could have an adverse effect on our liquidity and operating results.
The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of those jurisdictions, including the U.S., to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.
The amount of taxes we pay in these different jurisdictions may depend on the application of the tax laws of those jurisdictions, including the U.S., to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.
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 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’.
Competition for these employees in our industry (and especially in our principal U.S. locations) is intense, and many of the companies we compete with for experienced personnel have greater resources than we do. To remain competitive, we may experience increased compensation-related expenses.
Competition for employees in our industry (and especially in our principal U.S. locations) is intense, and many of the companies we compete with for experienced personnel have greater resources than we do. To remain competitive, we may experience increased compensation-related expenses.
If we lose one or more of our senior management or other key employees and are unable to find adequate replacements, or if we fail to attract, retain and motivate members of our senior management team and key employees or otherwise fail to retain a significant portion of our workforce, our business could be harmed.
If we lose one or more of our senior management or other key employees and are unable to find adequate replacements, or if we fail to attract, integrate, retain and motivate members of our senior management team and key employees or otherwise fail to retain a significant portion of our workforce, our business could be harmed.
You should carefully consider the following risks, together with all of the other information in this Annual Report on Form 10-K , including in the preceding Risk Factors Summary, and our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K.
You should carefully consider the following risks, together with all the other information in this Annual Report on Form 10-K, including in the preceding Risk Factors Summary, and our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K.
We also require skilled product development, marketing, sales, and operations professionals, and we may not be successful in attracting and retaining the professionals we need, particularly in our principal U.S. locations in the San Francisco Bay Area and Seattle.
We also require skilled product development, marketing, sales, finance and operations professionals, and we may not be successful in attracting and retaining the professionals we need, particularly in our principal U.S. locations in the San Francisco Bay Area and Seattle.
Tax authorities in the jurisdictions in which we operate may challenge our transfer pricing policies and intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions.
Furthermore, tax authorities in the jurisdictions in which we operate may challenge our transfer pricing policies and intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions.
If our products and solutions do not evolve to meet the needs of our customers or fail to achieve sufficient market acceptance, our financial results and competitive position will suffer.
If our products, solutions and functionalities do not evolve to meet the needs of our customers or fail to achieve sufficient market acceptance, our financial results and competitive position will suffer.
In addition, our credit facility prohibits us from making any cash payments on the conversion or repurchase of the Notes if an event of default exists under the credit facility or if, after giving effect to such conversion or repurchase (and any additional indebtedness incurred in connection with such conversion or a repurchase), we would not be in pro forma compliance with our financial covenants under the credit facility.
In addition, our credit facility prohibits us from making any cash payments on the conversion or repurchase of the Notes if an event of default exists under the credit facility or if, after giving effect to such conversion or repurchase (and any additional indebtedness incurred in connection with such conversion or a repurchase), we would not be in compliance with our financial covenants under the credit facility.
Our credit facility also requires that our Consolidated Leverage Ratio (as defined in the credit facility) not exceed specified levels, or that our Consolidated Interest Coverage Ratio (as defined in the credit facility) be less than specified levels. Our ability to comply with this and other covenants is dependent upon several factors, some of which are beyond our control.
Our credit facility also requires that our Consolidated Leverage Ratio (as defined in the credit facility) not exceed specified levels, or that our Consolidated Interest Coverage Ratio (as defined in the credit facility) be less than specified levels. Our ability to comply with these and other covenants is dependent upon several factors, some of which are beyond our control.
We have customers in a wide variety of industries, including real estate, financial services, insurance, manufacturing, and healthcare and life sciences. We have also expanded and intend to continue to expand our sales efforts internationally, where many countries may have less familiarity with and acceptance of e-signature products.
We have customers in a wide variety of industries, including real estate, financial services, insurance, manufacturing, and healthcare and life sciences. We intend to continue to expand our sales efforts internationally, where many countries may have less familiarity with and acceptance of e-signature products.
Risks Related to Our Notes Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow or cash on hand to pay our debt, to settle conversions of the Notes in cash or to repurchase the Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the Notes.
Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow or cash on hand to pay our debt, to settle conversions of the Notes in cash or to repurchase the Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the Notes.
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.
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.
Some of these indemnity agreements provide for uncapped liability for which we would be responsible, and some indemnity provisions survive termination or expiration of the applicable agreement. Large indemnity payments could harm our business, operating and financial condition.
Some of these indemnity provisions provide for uncapped liability for which we would be responsible, and some indemnity provisions survive termination or expiration of the applicable agreement. Large indemnity payments could harm our business, operating results and financial condition.
Risks Related to Ownership of Our Common Stock Our stock price may be volatile, and the value of our common stock may decline.
Risks Related to our Common Stock Our stock price may be volatile, and the value of our common stock may decline.
General Risk Factors If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our operating results could be adversely affected. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our operating results could be adversely affected. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other applicable securities rules and regulations that impose various requirements on public companies.
As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other applicable securities rules and regulations that impose various requirements on public companies.
New products and 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; and • introduction or anticipated introduction of competing products by our competitors.
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.
As use of our products and solutions grows and as customers use them for more types of transactions, we will need to devote additional resources to improving our application architecture, integrating with third-party systems and maintaining infrastructure performance.
As use of our products and solutions grows and as customers use them for more types of transactions, we will need to devote additional resources to improving our application architecture, integrating with third-party systems and maintaining or scaling our technology infrastructure and performance.
Security breaches may result in increased costs for such insurance. One or more large, successful claims against us in excess of our available insurance coverage, or changes in our insurance policies, including premium increases or large deductible or co-insurance requirements, could have an adverse effect on our business, operating results and financial condition.
Security breaches may result in increased costs for such insurance as well. One or more large, successful claims against us in excess of our available insurance coverage, or changes in our insurance policies, including premium increases or large deductible or coinsurance requirements, could have an adverse effect on our business, operating results and financial condition.
From time to time, we may be involved as a party or an indemnitor in disputes or regulatory inquiries that arise in the ordinary course of business. These may include alleged claims, lawsuits and proceedings regarding labor and employment issues, commercial disagreements, securities law violations and other matters.
From time to time, we have been and may in the future be involved as a party or an indemnitor in legal proceedings, disputes or regulatory inquiries that arise in the ordinary course of business. These may include alleged claims, lawsuits and proceedings regarding labor and employment issues, commercial disagreements, securities law violations and other matters.
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 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.
The EU Commission has also published revised standard contractual clauses for data transfers from the EEA: the revised clauses must be used for relevant new data transfers from September 27, 2021; existing standard contractual clauses arrangements must be migrated to the revised clauses by December 27, 2022.
The EU Commission has also published revised Standard Contractual Clauses for data transfers from the EEA: the revised Standard Contractual Clauses must be used for relevant new data transfers since September 27, 2021; existing Standard Contractual Clauses arrangements were required to be migrated to the revised Standard Contractual Clauses by December 27, 2022.
An acquisition may also negatively affect our financial results because it may: • require us to incur charges or assume substantial debt; • cause adverse tax consequences or unfavorable accounting treatment; • expose us to claims and disputes by third parties, including intellectual property and privacy claims and disputes; • not generate sufficient financial return to offset additional costs and expenses related to the acquisition; • cause us to incur liabilities for activities of the acquired company before the acquisition; DocuSign, Inc.| 2022 Form 10-K | 25 • cause us to record impairment charges associated with goodwill and other acquired intangible assets; and • cause other unforeseen operating difficulties and expenditures.
An acquisition may also negatively affect our financial results because it may: ▪ require us to incur charges or assume substantial debt; ▪ cause adverse tax consequences or unfavorable accounting treatment; ▪ expose us to claims and disputes by third parties, including intellectual property and privacy claims and disputes; ▪ not generate sufficient financial return to offset additional costs and expenses related to the acquisition; ▪ cause us to incur liabilities for activities of the acquired company before the acquisition; ▪ cause us to record impairment charges associated with goodwill and other acquired intangible assets; and ▪ cause other unforeseen operating difficulties and expenditures.
We also provide eligible employees with the opportunity to purchase shares of our common stock at a discounted price per share through our Employee Stock Purchase Plan (“ESPP”) and pursuant to our 2018 Plan, our management is authorized to grant stock options, restricted stock units and other equity awards to our employees, directors and consultants.
We also provide eligible employees with the opportunity to purchase shares of our common stock at a discounted price per share through our ESPP and pursuant to our 2018 Plan, our management is authorized to grant stock options, restricted stock units (“RSUs”) and other equity awards to our employees, directors and consultants.
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: • the COVID-19 pandemic, including its effects on customer demand for our solutions and the pace of the digital transformation of business and hybrid work arrangements; • actual or anticipated fluctuations in our financial condition and operating results; • 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; • the consummation, and the anticipated benefits, of our stock repurchase program; • changes in senior management or key personnel; • 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.; • terrorist attacks, natural disasters, 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; and • general economic, regulatory and market conditions, including interest rate fluctuations.
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.
Negative conditions in the general economy both in the U.S. and abroad, including conditions resulting from changes in interest rates, gross domestic product growth, financial and credit market fluctuations, inflation, political turmoil, natural catastrophes, regional and global conflicts and terrorist attacks on 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, 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.
Additionally, as we rely on third-party and public-cloud infrastructure, we depend in part on third-party security measures to protect against unauthorized access, cyberattacks and the mishandling of customer data.
We also rely on third-party and public-cloud infrastructure, and we depend in part on third-party security measures to protect against unauthorized access, cyberattacks and the mishandling of customer data.
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; • 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; • 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 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, customs, legal systems, alternative dispute systems 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.
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.
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.
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.
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.
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 each of the years ended January 31, 2022, 2021 and 2020 total revenue generated from customers outside the U.S. was 23%, 20% and 18% of our total revenue. As of January 31, 2022 , we have offices in 12 countries and approximately 31% of our full-time employees were located outside of the U.S .
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.
Our credit facility restricts our ability to, among other things: DocuSign, Inc.| 2022 Form 10-K | 32 • use our accounts receivable, inventory, trademarks and most of our other assets as security in other borrowings or transactions, unless the value of the assets subject thereto does not exceed a certain threshold; • incur additional indebtedness; • incur liens upon our property; • dispose of certain assets; • declare dividends or make certain distributions; and • undergo a merger or consolidation or other transactions.
Our credit facility restricts our ability to, among other things: ▪ use our accounts receivable, inventory, trademarks and most of our other assets as security in other borrowings or transactions, unless the value of the assets subject thereto does not exceed a certain threshold; ▪ incur additional indebtedness; ▪ incur liens upon our property; ▪ dispose of certain assets; ▪ declare dividends or make certain distributions; and ▪ undergo a merger or consolidation or other transactions.
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, operational disruptions related to the COVID-19 pandemic or other 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.
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.
While we take precautions to prevent our products and solutions from being exported in violation of these laws, including obtaining authorizations for our encryption products, implementing IP address blocking and screenings against U.S. government and international lists of restricted and prohibited persons, we cannot guarantee that the DocuSign, Inc.| 2022 Form 10-K | 35 precautions we take will prevent violations of export control and sanctions laws.
While we take precautions to prevent our products and solutions from being exported in violation of these laws, including obtaining authorizations for our encryption products, implementing IP address blocking and screenings against U.S. government and international lists of restricted and prohibited persons, we cannot guarantee that the precautions we take will prevent violations of export control and sanctions laws.
This may require us to expend substantial resources or to discontinue certain solutions, which would DocuSign, Inc.| 2022 Form 10-K | 22 negatively affect our business, operating results and financial condition. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business.
This may require us to expend substantial resources or to discontinue certain solutions, which would negatively affect our business, operating results and financial condition. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business.
To safeguard data transfers from the EEA to other jurisdictions, including the U.S., we currently utilize respective Binding Corporate Rules DocuSign, Inc.| 2022 Form 10-K | 34 and standard contractual contracts as the approved data transfer mechanisms by the EU Commission for corresponding applicable data transfer activity.
To safeguard data transfers from the EEA to other jurisdictions, including the U.S., we currently utilize respective Binding Corporate Rules and Standard Contractual Clauses as the approved data transfer mechanisms by the EU Commission for corresponding DocuSign, Inc.| 2023 Form 10-K | 29 applicable data transfer activity.
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.
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.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations DocuSign, Inc.| 2022 Form 10-K | 38 with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.
We may be subject to legal proceedings and litigation for a variety of claims, including labor and employment issues, intellectual property disputes, securities law violations and other matters, which may be costly and may subject us to significant liability and increased costs of doing business.
We have been and may in the future be subject to legal proceedings and litigation for a variety of claims, including labor and employment issues, intellectual property disputes, securities law violations, derivative litigation and other matters, which may be costly and may subject us to significant liability and increased costs of doing business.
Risks Related to Governmental Regulation including Taxation The requirements of being a public company, including developing and maintaining proper and effective disclosure controls and procedures and internal control over financial reporting, may strain our resources and divert management’s attention away from other business concerns.
The requirements of being a public company, including developing and maintaining proper and effective disclosure controls and procedures and internal control over financial reporting, may strain our resources and divert management’s attention away from other business concerns.
In addition, if a make- DocuSign, Inc.| 2022 Form 10-K | 39 whole fundamental change (as defined in the respective indentures for the Notes) occurs prior to the respective maturity dates of the Notes, we will in some cases be required to increase the conversion rate for a holder that elects to convert its Notes in connection with such make-whole fundamental change.
In addition, if a make-whole fundamental change (as defined in the respective indentures for the Notes) occurs prior to the respective maturity dates of the Notes, we will in some cases be required to increase the conversion rate for a holder that elects to convert its Notes in connection with such make-whole fundamental change.
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.
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.
A disruption or failure of these systems in the event of online attack, earthquake, fire, terrorist attack, public health crisis (such as the COVID-19 pandemic), power loss, telecommunications failure or other similar catastrophic event could cause system interruptions, delays in accessing our service, reputational harm and loss of critical data or could prevent us from providing our products and solutions to our customers.
A disruption or failure of these systems in the event of online attack, earthquake, fire, terrorist attack, public health crisis, power loss, telecommunications failure or other similar catastrophic event, including as a result of the effects of climate change, could cause system interruptions, delays in accessing our service, reputational harm and loss of critical data or could prevent us from providing our products and solutions to our customers.
There can be no assurance that any limitations of liability provisions in our contracts would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular claim.
Additionally, there can be no assurance that any limitations of liability provisions in our contracts would be enforceable or adequate in the event of a security breach or would otherwise protect us from any such liabilities or damages with respect to any particular claim.
We have also made public commitments to our corporate environmental, social, and governance (“ESG”) and human capital management initiatives, including to the recruitment of a diverse workforce.
Further, we have also made public commitments to our corporate environmental, social, and governance (“ESG”) and human capital management initiatives, including to the recruitment of a diverse workforce and reductions in carbon emissions.
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.
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.
Our indebtedness may: • limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions or other general business purposes; • limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions or other general business purposes; • require us to use a substantial portion of our cash flow from operations to make debt service payments; • limit our flexibility to plan for, or react to, changes in our business and industry; • place us at a competitive disadvantage compared to our less leveraged competitors; and • increase our vulnerability to the impact of adverse economic and industry conditions.
Our indebtedness may: ▪ limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions or other general business purposes; ▪ limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions or other general business purposes; ▪ require us to use a substantial portion of our cash flow from operations to make debt service payments; ▪ limit our flexibility to plan for, or react to, changes in our business and industry; ▪ place us at a competitive disadvantage compared to our less leveraged competitors; ▪ increase our vulnerability to the impact of adverse economic and industry conditions, including inflation and rising interest rates; and ▪ require us to consume a portion of our liquidity to settle the Notes in the next 12 months.
Different pricing structures apply to our Agreement Cloud products. For DocuSign eSignature, we price our subscriptions based on the functionality required by our customers and the quantity of Envelopes provisioned.
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.
Our ability to use our net operating loss carryforwards to offset future taxable income may be subject to certain limitations. DocuSign, Inc.| 2022 Form 10-K | 36 As of January 31, 2022 , 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, 2023 , we had accumulated net operating loss carryforwards and research tax credits in our federal, state and foreign jurisdictions with varying expiration dates.
If we cannot cost-effectively deploy our expanding sales force, both domestically and internationally, and use our marketing tools, or if we fail to promote our products and solutions efficiently and effectively, our ability to acquire new customers and our financial condition may suffer.
If we cannot cost-effectively deploy our expanding sales force, both domestically and internationally, and use our marketing tools, or if we fail to promote our products and solutions efficiently and effectively, our ability to acquire new customers and our financial condition may suffer. We may need to reduce or change our pricing model to remain competitive.
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, 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.
Additional risks beyond those summary risks discussed below, in “Risk Factors” or elsewhere in this Annual Report on Form 10-K, could have an adverse effect on our business, results of operations, financial condition or prospects, and could cause the trading price of our common stock to decline.
Additional risks beyond those discussed below in “Risk Factors” or elsewhere in this Annual Report on Form 10-K that we do not currently anticipate or that we currently deem immaterial could have an adverse effect on our business, results of operations, financial condition or prospects, and could cause the trading price of our common stock to decline.
While we experienced an increase in paying customers and revenue due to 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 when businesses return to more normalized, hybrid or in-person work environments.
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.
The CPRA and the CCPA may lead other states to pass comparable 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.
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.
Such agencies and entities may have statutory, contractual or other legal rights to terminate contracts with us or our partners due to a default or for other reasons, and any such termination may adversely affect our business, operating results and financial condition. We may need to reduce or change our pricing model to remain competitive.
Such agencies and entities may have statutory, contractual or other legal rights to terminate contracts with us or our partners due to a default or for other reasons, and any such termination may adversely affect our business, operating results and financial condition.
In addition, as of January 31, 2022 , we had outstanding $37.1 million aggregate principal amount of 0.5% Convertible Senior Notes due 2023 (the “2023 Notes ” ), $690.0 million aggregate principal amount of 0.0% Convertible Senior Notes due 2024 (the “2024 Notes,” and together with the 2023 Notes, the “Notes”) and available borrowing capacity of $500.0 million under our credit facility.
In addition, as of January 31, 2023, we had outstanding $37.1 million aggregate principal amount of the 2023 Notes, $690.0 million aggregate principal amount of the 2024 Notes (the 2023 Notes together with the 2024 Notes, the “Notes”) and available borrowing capacity of $500.0 million under our credit facility.
Our renewal and expansion rates may decline or fluctuate as a result of a number of factors, including customer spending levels, customer dissatisfaction, decreases in the number of users at our customers, changes in the type and size of our customers, pricing, competitive conditions, customer attrition and general economic and global market conditions, including as a result of the COVID-19 pandemic.
Our renewal and expansion rates may decline or fluctuate as a result of a number of factors, including customer spending levels, customer dissatisfaction, decreases in the number of users with our customers, changes in the type and size of our customers, pricing, competitive conditions, customer attrition and general economic and global market conditions, including as a result of inflation, rising interest rates, increased debt and equity market volatility and the impact of the COVID-19 pandemic.
If our DocuSign, Inc.| 2022 Form 10-K | 19 customers do not renew their subscriptions for our products and solutions or if they reduce their subscription amounts at the time of renewal, our revenue will decline, and our business will suffer.
If our customers do not renew their subscriptions for our products and solutions or if they reduce their subscription amounts at the time of renewal, our revenue will decline, and our business will suffer.
DocuSign, Inc.| 2022 Form 10-K | 28 As of January 31, 2022, we had $37.1 million principal amount of indebtedness outstanding under our 2023 Notes, $690.0 million principal amount of indebtedness outstanding under our 2024 Notes and available borrowing capacity of $500.0 million under our credit facility.
As of January 31, 2023, we had $37.1 million principal amount of indebtedness outstanding under our 2023 Notes, $690.0 million principal amount of indebtedness outstanding under our 2024 Notes and available borrowing capacity of $500.0 million under our credit facility.
DocuSign, Inc.| 2022 Form 10-K | 31 Our current operations are international in scope and we plan further geographic expansion, creating a variety of operational challenges. A component of our growth strategy involves the further expansion of our operations and customer base internationally.
Our current operations are international in scope and we plan further geographic expansion, creating a variety of operational challenges. A component of our growth strategy involves the further expansion of our operations and customer base internationally.
Any perceived changes in our dedication to these commitments or our failure to achieve progress in these areas on a timely basis, or at all, could adversely impact our relationships with our customers and employees, affect our reputation and the value of our brand.
Any perceived changes in our dedication to these commitments or our failure to achieve progress in these areas on a timely basis, or at all, could adversely impact our relationships with our customers and employees and affect our reputation and the value of our brand. If we fail to offer high-quality support, our business and reputation could suffer.
Moreover, a majority of our subscription contracts are for one year. Our customers have no obligation to renew their subscriptions and we cannot guarantee that our customers will renew their subscriptions with us for a similar or greater contract period or on the same or more favorable terms.
Our customers have no obligation to renew their subscriptions and we cannot guarantee that our customers will renew their subscriptions with us for a similar or greater contract period or on the same or more favorable terms.
DocuSign, Inc.| 2022 Form 10-K | 26 We may not be able to scale our business quickly enough to meet the growing needs of our customers and if we are not able to grow efficiently, our operating results could be harmed.
We may not be able to scale our business quickly enough to meet the growing needs of our customers and if we are not able to grow efficiently, our operating results could be harmed.
We expect to continue to expend substantial financial and other resources on: • sales, including a significant expansion of our global sales organization and investment in training and sales enablement; • marketing to expand brand awareness both in the U.S. and internationally; • our technology infrastructure, including systems architecture, management tools, scalability, availability, performance and security, as well as disaster recovery measures; • product development and innovation; • acquisitions or strategic investments; • international expansion; and • general administration, including legal and accounting expenses.
We expect to continue to expend substantial financial and other resources on: ▪ product development and innovation; ▪ sales, including our omni channel: direct, self-serve and partners; ▪ marketing to expand brand awareness both in the U.S. and internationally; ▪ our technology infrastructure, including information technology systems, systems architecture, management tools, scalability, availability, performance and security, as well as disaster recovery measures; ▪ acquisitions or strategic investments; ▪ international expansion; and ▪ general administration, including legal and accounting expenses.
If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Notes or to pay cash upon conversion of the Notes. The conditional conversion feature of the Notes may adversely affect our financial condition and operating results.
If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Notes or to pay cash upon conversion of the Notes.
The loss of a substantial number of our partners, our possible inability to replace them, or the DocuSign, Inc.| 2022 Form 10-K | 27 failure to recruit additional partners could harm our growth objectives and operating results.
The loss of a substantial number of our partners, our possible inability to replace them or the failure to recruit additional partners could harm our growth objectives and operating results.
The costs incurred in addressing and correcting any material defects or errors in our software and expanding our infrastructure and architecture in order to accommodate increased demand for our products and solutions may be substantial and could adversely affect our operating results. If we fail to offer high-quality support, our business and reputation could suffer.
The costs incurred in addressing and correcting any material defects or errors in our software and expanding our infrastructure and architecture in order to accommodate increased demand for our products and solutions may be substantial and could adversely affect our operating results.
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 DocuSign Agreement Cloud offerings for our customers; • continue to introduce our products and solutions to new markets outside of the U.S.; • mitigate and effectively manage the varying impacts of the COVID-19 pandemic, including its effect on the pace of the digital transformation of business and the costs of monitoring and complying with evolving governmental mandates and removal or weakening of these mandates; • hire, retain and train 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; 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.
Further, 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 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), 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.
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.
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.
A catastrophic event that results in the destruction or DocuSign, Inc.| 2022 Form 10-K | 40 disruption of our data centers, or our network infrastructure or information technology systems, including any errors, defects or failures in third-party hardware, could affect our ability to conduct normal business operations and adversely affect our operating results. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
A catastrophic event that results in the destruction or disruption of our data centers, or our network infrastructure or information technology systems, including any errors, defects or failures in third-party hardware, could affect our ability to conduct normal business operations and adversely affect our operating results.
DocuSign, Inc.| 2022 Form 10-K | 17 We expect fluctuations in our financial results, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors, the price of our common stock could decline.
Financial Risks, including Taxation We expect fluctuations in our financial results, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors, the price of our common stock could decline.
Subject to certain conditions, holders of the Notes may require us to repurchase for cash all or a portion of their Notes upon the occurrence of a fundamental change (as defined in the respective indentures governing the Notes) at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid regular or special interest, if any, to, but excluding, the fundamental change repurchase date.
Subject to certain conditions, holders of the Notes may require us to repurchase for cash all or a portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid regular or special interest, if any.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located in San Francisco, California, and consist of approximately 152,000 square feet under lease agreements that expire on August 9, 2024. We maintain additional offices in multiple locations in the U.S. and internationally in Europe, Asia, Latin America, Israel, Egypt and Australia.
Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located in San Francisco, California, and consist of approximately 93,000 square feet under lease agreements that expire on July 31, 2029. We maintain additional offices in multiple locations in the U.S. and internationally in Europe, Asia, Latin America, Israel, Egypt and Australia.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeDistrict 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.
Biggest changeSecurities 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.
The complaint 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, 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.
The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. DocuSign, Inc. Securities Litigation On February 8, 2022, a putative securities class action was filed in the U.S.
The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. DocuSign, Inc.
The suit is purportedly brought on behalf of purchasers of our securities between June 4, 2020 and December 2, 2021. We are not yet required to respond to the complaint, but believe it is devoid of merit. 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. We moved to dismiss the amended complaint on September 16, 2022. 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. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II - OTHER INFORMATION
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).
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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.
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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.
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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.
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While the complaints vary, they are based largely on the same underlying allegations as the securities class action suit described above (Weston), as well as, in certain instances, alleged insider trading.
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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.
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By court order dated July 19, 2022, the two cases in the Northern District of California (Lapin and Votto) have been consolidated and stayed in light of the securities class action and no response to the complaints in the action will be due unless and until the stay is lifted.
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The third case in the Northern District of California (Fox) was related to the other derivative suits and assigned to the same judge, and was similarly stayed by order of the court on December 2, 2022.
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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.
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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.
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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.
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Springer’s complaint sought relief determining that he did not resign from his position on our board of directors and remains a director, and for an award of attorneys’ fees and costs associated with the civil action. To avoid the cost and distraction of further litigation with Mr.
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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.
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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.
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DocuSign, 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.
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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

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUse of Proceeds None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. Reserved
Biggest changeUse 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.
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 2022 Annual Meeting of Stockholders, which will be filed with the SEC no later than 120 days after January 31, 2022.
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.
Data for the S&P 500 Index and the S&P 500 Information Technology Index assume reinvestment of dividends. 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 DocuSign, Inc.| 2022 Form 10-K | 42 None.
Data 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.
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. DocuSign, Inc.| 2022 Form 10-K | 41 Holders of our Common Stock As of February 28, 2022, there were 73 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 28, 2023, there were 78 holders of record of our common stock.
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Repurchases of our common stock may be effected from time to time, either on the open market, in block trades, in privately negotiated transactions, and through other transactions in accordance with applicable securities laws. The program does not obligate us to repurchase any specific number of shares and may be discontinued at any time.
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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.
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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

Item 7. Management's Discussion & Analysis

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

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Biggest changeDocuSign, Inc.| 2022 Form 10-K | 56 Reconciliation of gross profit (loss) and gross margin: Year Ended January 31, (in thousands) 2022 2021 2020 GAAP gross profit $ 1,640,762 $ 1,088,989 $ 730,737 Add: Stock-based compensation 58,499 42,658 28,585 Add: Amortization of acquisition-related intangibles 11,670 11,052 5,704 Add: Employer payroll tax on employee stock transactions 7,524 5,904 2,577 Non-GAAP gross profit $ 1,718,455 $ 1,148,603 $ 767,603 GAAP gross margin 78 % 75 % 75 % Non-GAAP adjustments 4 % 4 % 4 % Non-GAAP gross margin 82 % 79 % 79 % GAAP subscription gross profit $ 1,693,611 $ 1,121,405 $ 754,532 Add: Stock-based compensation 31,152 20,793 12,882 Add: Amortization of acquisition-related intangibles 11,670 11,052 5,704 Add: Employer payroll tax on employee stock transactions 3,703 2,862 1,054 Non-GAAP subscription gross profit $ 1,740,136 $ 1,156,112 $ 774,172 GAAP subscription gross margin 83 % 81 % 82 % Non-GAAP adjustments 2 % 3 % 2 % Non-GAAP subscription gross margin 85 % 84 % 84 % GAAP professional services and other gross loss $ (52,849) $ (32,416) $ (23,795) Add: Stock-based compensation 27,347 21,865 15,703 Add: Employer payroll tax on employee stock transactions 3,821 3,042 1,523 Non-GAAP professional services and other gross loss $ (21,681) $ (7,509) $ (6,569) GAAP professional services and other gross margin (76) % (45) % (43) % Non-GAAP adjustments 45 % 35 % 31 % Non-GAAP professional services and other gross margin (31) % (10) % (12) % Reconciliation of income (loss) from operations and operating margin: Year Ended January 31, (in thousands) 2022 2021 2020 GAAP loss from operations $ (61,884) $ (173,855) $ (193,509) Add: Stock-based compensation 408,542 286,877 206,404 Add: Amortization of acquisition-related intangibles 24,770 25,618 17,717 Add: Employer payroll tax on employee stock transactions 42,192 34,042 16,720 Add: Acquisition-related expenses 387 7,962 — Add: Impairment of operating lease right-of-use assets 5,099 — — Non-GAAP income from operations $ 419,106 $ 180,644 $ 47,332 GAAP operating margin (3) % (12) % (20) % Non-GAAP adjustments 23 % 24 % 25 % Non-GAAP operating margin 20 % 12 % 5 % DocuSign, Inc.| 2022 Form 10-K | 57 Reconciliation of net income (loss): Year Ended January 31, (in thousands, except per share data) 2022 2021 2020 GAAP net loss $ (69,976) $ (243,267) $ (208,359) Add: Stock-based compensation 408,542 286,877 206,404 Add: Amortization of acquisition-related intangibles 24,770 25,618 17,717 Add: Employer payroll tax on employee stock transactions 42,192 34,042 16,720 Add: Acquisition-related expenses 387 7,962 — Add: Amortization of debt discount and issuance costs 5,098 28,001 26,389 Add: Loss on extinguishment of debt — 33,752 — Add: Tax expense related to intercompany IP transfer (1) — 9,294 — Add: Impairment of operating lease right-of-use assets 5,099 — — Less: Fair value adjustments to strategic investments (5,270) — — Non-GAAP net income $ 410,842 $ 182,279 $ 58,871 (1) Represents net change in tax liabilities related to an intercompany IP transfer Computation of free cash flow: Year Ended January 31, (in thousands) 2022 2021 2020 Net cash provided by operating activities $ 506,467 $ 296,954 $ 115,696 Less: Purchases of property and equipment (61,396) (82,395) (72,046) Non-GAAP free cash flow $ 445,071 $ 214,559 $ 43,650 Net cash (used in) provided by investing activities $ (162,909) $ 81,229 $ (321,489) Net cash (used in) provided by financing activities $ (394,621) $ (58,976) $ (70,455) Computation of billings: Year Ended January 31, (in thousands) 2022 2021 2020 Revenue $ 2,107,213 $ 1,453,047 $ 973,971 Add: Contract liabilities and refund liability, end of period 1,049,106 800,940 522,201 Less: Contract liabilities and refund liability, beginning of period (800,940) (522,201) (390,887) Add: Contract assets and unbilled accounts receivable, beginning of period 21,021 15,082 13,436 Less: Contract assets and unbilled accounts receivable, end of period (18,273) (21,021) (15,082) 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 $ 2,358,127 $ 1,723,092 $ 1,103,639 DocuSign, Inc.| 2022 Form 10-K | 58
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%.
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 software platform 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 software platform. Several of our largest enterprise customers have deployed our products for hundreds of use cases across their organizations.
We started our international selling efforts in English-speaking common law countries, such as Canada, the UK and Australia, where we were able to leverage our core technologies due to similar approaches to e-signature in these jurisdictions and the U.S. We have since made significant investments to be able to offer our products in select civil law countries.
We started our international selling efforts in English-speaking common law countries, such as Canada, the UK and Australia, where we were able to leverage our core technologies due to similar approaches to electronic signature in these jurisdictions and the U.S. We have since made significant investments to be able to offer our products in select civil law countries.
We generally offer access to our platform on a subscription basis with prices based on the functionality our customers require and the quantity of Envelopes provisioned. Similar to the physical envelopes historically used to mail paper documents, an Envelope is a digital container used to send one or more documents for signature or approval to one or more recipients.
We generally offer access to our products on a subscription basis with prices based on the functionality our customers require and the quantity of Envelopes provisioned. Similar to the physical envelopes historically used to mail paper documents, an Envelope is a digital container used to send one or more documents for signature or approval to one or more recipients.
Cash Flows from Financing Activities 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 equity plans. We also used $77.9 million for repayments of our 2023 Notes.
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.
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 Workday—so that they can create, sign, send and manage agreements from directly within these applications.
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.
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, 2022.
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.
We have a diverse customer base spanning across virtually all industries and around the world with no significant customer concentration. No single customer accounted for more than 10% of total revenue in any of the years presented. We focused initially on selling our e-signature solutions to commercial businesses and VSBs and later expanded our focus to target enterprise customers.
We have a diverse customer base spanning across virtually all industries and around the world with no significant customer concentration. No single customer accounted for more than 10% of total revenue in any of the years presented. We focused initially on selling our products to commercial businesses and VSBs and later expanded our focus to target enterprise customers.
Cash Flows from Investing Activities For the year ended January 31, 2022, cash used in investing activities of $162.9 million was primarily driven by $93.4 million net purchases of marketable securities, $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.
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.
We refer to total customers as all enterprises, commercial businesses and VSBs. We believe that our ability to increase the number of customers using our software platform, particularly the number of enterprise and commercial customers, is an indicator of our market penetration, the growth of our business and our potential future business opportunities.
We refer to total customers as all enterprises, commercial businesses and VSBs. We believe that our ability to increase the number of customers using our products, particularly the number of enterprise and commercial customers, is an indicator of our market penetration, the growth of our business and our potential future business opportunities.
By increasing awareness of our software platform, further developing our sales and marketing expertise and continuing to build features tuned to different industry needs, we have expanded the diversity of our customer base to include organizations of all sizes across nearly every industry.
By increasing awareness of our products, further developing our sales and marketing expertise and continuing to build features tuned to different industry needs, we have expanded the diversity of our customer base to include organizations of all sizes across nearly every industry.
DocuSign, Inc.| 2022 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.
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.
We define commercial customers to include both mid-market companies, which includes companies outside the Global 2000 that have greater than 250 employees, and 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, 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.
DocuSign, Inc.| 2022 Form 10-K | 55 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.| 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.
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 23%, 20% and 18% of our total revenue in each of the years ended January 31, 2022, 2021, and 2020, 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 25%, 23% and 20% of our total revenue in each of the years ended January 31, 2023, 2022, and 2021, respectively.
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 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.
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, impairment of operating lease right-of-use assets, 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, 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.
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 $1.4 billion as of January 31, 2022.
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.
We generate substantially all our revenue from sales of subscriptions, which accounted for 97%, 95% and 94% of our revenue in the years ended January 31, 2022, 2021 and 2020. Our subscription fees include the use of our software platform and access to customer support.
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.
Any revisions in the estimates of potential liabilities could have a material impact on our operating results and financial position. Further, until the final resolution of DocuSign, Inc.| 2022 Form 10-K | 54 any such matter, there may be a loss exposure in excess of the liability recognized and such amount could be significant.
Any revisions in the estimates of potential liabilities could have a material impact on our operating results and financial position. Further, until the final resolution of any such matter, there may be a loss exposure in excess of the liability recognized and such amount could be significant.
DocuSign, Inc.| 2022 Form 10-K | 52 Critical Accounting Policies and Estimates W e prepare our financial statements in accordance with 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 | 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.| 2022 Form 10-K | 44 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: Growing Customer Base We are highly focused on continuing to acquire new customers to support our long-term growth.
Stock-based Compensation We issue stock-based awards to employees, including RSUs, purchase rights granted under our ESPP and stock options. We measure the fair value of these awards at the grant date and recognize such fair value as expense over the service period.
Stock-based Compensation We issue stock-based awards to employees, including restricted stock units (“RSUs”), purchase rights granted under our Employee Stock Purchase Plan (“ESPP”) and stock options. We measure the fair value of these awards at the grant date and recognize such fair value as expense over the service period.
The number of our customers with greater than $300,000 in annual contract value (measured in billings) has increased from 599 customers as of January 31, 2021 to 852 customers as of January 31, 2022. Each of our customer types has a different purchasing pattern.
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.
General and Administrative Year Ended January 31, 2022 vs 2021 (in thousands) 2022 2021 General and administrative $ 232,757 $ 192,697 21 % Percentage of revenue 11 % 13 % General and administrative expenses increased $40.1 million, or 21%, in the year ended January 31, 2022, primarily due to investments in workforce and technology support to accommodate the operations and growth in our business.
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.| 2022 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.
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.
We typically invoice customers in advance on an annual basis. We recognize subscription revenue ratably over the term of the contract subscription period beginning on the date access to our software suite is provided. Professional Services and Other Revenue Professional services revenue includes fees associated with new customers requesting deployment and integration services.
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.
The increase was primarily due to the expansion of existing customers and the addition of new customers. This growth was mainly driven by an increase in sales to our mid-market and enterprise customers through our direct and indirect sales channels.
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.
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.
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.
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 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.
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 we offer new functionality, attract new customers and fully realize the potential of our acquisitions in our product offerings.
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.
For RSUs with a performance condition, we assess the probability that such performance conditions will be met or achieved every reporting period. Judgment is required to estimate the expected life of the stock awards, the volatility of the underlying common stock, forfeiture rates and probability of achievement of performance conditions. Our assumptions may differ from those used in prior periods.
Judgment is required to estimate the expected life of the stock awards, the volatility of the underlying common stock, forfeiture rates and probability of achievement of performance conditions. Our assumptions may differ from those used in prior periods.
Our go-to-market strategy relies on our direct sales force and partnerships to sell to enterprises and commercial businesses and our web-based self-service channel to sell to VSBs, which we believe is the most cost-effective way to reach our smallest customers.
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.
DocuSign, Inc.| 2022 Form 10-K | 51 Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended January 31, (in thousands) 2022 2021 Net cash provided by (used in): Operating activities $ 506,467 $ 296,954 Investing activities (162,909) 81,229 Financing activities (394,621) (58,976) Effect of foreign exchange on cash, cash equivalents and restricted cash (5,594) 5,646 Net change in cash, cash equivalents and restricted cash $ (56,657) $ 324,853 Cash Flows from Operating Activities Cash provided by operating activities was $506.5 million and $297.0 million for the years ended January 31, 2022, and 2021.
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.
Research and Development Year Ended January 31, 2022 vs 2021 (in thousands) 2022 2021 Research and development $ 393,362 $ 271,522 45 % Percentage of revenue 19 % 19 % Research and development expenses increased $121.8 million, or 45%, in the year ended January 31, 2022, primarily due to investments in workforce and technology support to accommodate growth.
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.
Our accounts receivable increased by $117.4 million in the year ended January 31, 2022 , compared to an increase of $73.9 million, excluding the impact from acquisitions, in the year ended January 31, 2021 , which resulted in a $43.5 million decrease in cash provided by operating activities year over year.
Our accounts receivable increased by $76.0 million in the year ended January 31, 2023 , compared to an increase of $117.4 million, in the prior year , which resulted in a $41.4 million increase in cash provided by operating activities year over year.
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. In addition, to follow longstanding tradition in Japan, we enable signers to upload and apply their personal eHanko stamp to represent their signatures on an agreement.
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.
DocuSign, Inc.| 2022 Form 10-K | 48 Cost of Revenue and Gross Margin Year Ended January 31, 2022 vs 2021 (in thousands) 2022 2021 Cost of revenue: Subscription $ 343,661 $ 259,992 32 % Professional services and other 122,790 104,066 18 % Total cost of revenue $ 466,451 $ 364,058 28 % Gross margin: Subscription 83 % 81 % 2 pts Professional services and other (76) % (45) % (31) pts Total gross margin 78 % 75 % 3 pts Cost of subscription revenue increased $83.7 million, or 32% in the year ended January 31, 2022, primarily driven by higher costs to support our growing customer base.
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.
The critical accounting estimates, assumptions and judgments that we believe to have the most significant impact on our consolidated financial statements are revenue recognition, deferred contract acquisition costs, stock-based compensation, business combinations, valuation of acquired intangible assets in business combinations and income taxes.
The critical accounting estimates, assumptions and judgments that we believe to have the most significant impact on our consolidated financial statements are revenue recognition, deferred contract acquisition costs, stock-based compensation, income taxes and loss contingencies. Revenue Recognition We recognize revenue from contracts with customers using the five-step method described in Note 1 to the consolidated financial statements.
Sales and Marketing Year Ended January 31, 2022 vs 2021 (in thousands) 2022 2021 Sales and marketing $ 1,076,527 $ 798,625 35 % Percentage of revenue 51 % 55 % Sales and marketing expenses increased $277.9 million, or 35%, in the year ended January 31, 2022, primarily driven by investments in workforce and technology support to accommodate the demand for our products and increased interest in digital transformation of agreements.
Sales and marketing expenses increased $166.2 million, or 15%, in the year ended January 31, 2023, primarily driven by investments in workforce and technology support to accommodate the demand for our products and increased interest in digital transformation of agreements.
Revenue Year Ended January 31, 2022 vs 2021 (in thousands) 2022 As % of Revenue 2021 As % of Revenue Revenue: Subscription $ 2,037,272 97 % $ 1,381,397 95 % 47 % Professional services and other 69,941 3 71,650 5 (2) % Total revenue $ 2,107,213 100 % $ 1,453,047 100 % 45 % Subscription revenue increased $655.9 million, or 47%, in the year ended January 31, 2022.
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.
We anticipate continuing to invest in customer success through our professional services offerings as we DocuSign, Inc.| 2022 Form 10-K | 43 believe it plays an important role in accelerating our customers’ deployment of our software platform, which helps drive customer retention and expansion of the use of the DocuSign Agreement Cloud.
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.
DocuSign, Inc.| 2022 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) 2022 As % of Revenue 2021 As % of Revenue Revenue: Subscription $ 2,037,272 97 % $ 1,381,397 95 % Professional services and other 69,941 3 71,650 5 Total revenue 2,107,213 100 1,453,047 100 Cost of revenue: Subscription 343,661 16 259,992 18 Professional services and other 122,790 6 104,066 7 Total cost of revenue 466,451 22 364,058 25 Gross profit 1,640,762 78 1,088,989 75 Operating expenses: Sales and marketing 1,076,527 51 798,625 55 Research and development 393,362 19 271,522 19 General and administrative 232,757 11 192,697 13 Total operating expenses 1,702,646 81 1,262,844 87 Loss from operations (61,884) (3) (173,855) (12) Interest expense (6,443) — (30,799) (2) Loss on extinguishment of debt — — (33,752) (2) Interest income and other income, net 1,413 — 8,914 — Loss before provision for income taxes (66,914) (3) (229,492) (16) Provision for income taxes 3,062 — 13,775 1 Net loss $ (69,976) (3) % $ (243,267) (17) % For a comparison of our results of operations for the fiscal years ended January 31, 2021 and 2020 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, 2021, filed with the SEC on March 31, 2021.
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.
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. 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.
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.
Revenue Recognition We recognize revenue from contracts with customers using the five-step method described in Note 1 to the consolidated financial statements. At contract inception we evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation.
At contract inception we evaluate whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation.
Significant increases consisted of: • $28.1 million in personnel costs and $10.4 million in stock-based compensation expense primarily due to higher headcount, and annual merit increases; • $9.2 million in hosting costs, $6.5 million in authentication and processing fees and $5.7 million in third-party partner costs to support the growth in our revenue; • $15.6 million in depreciation and amortization, which reflects the impact of higher data center costs and capitalized software assets as well as the full-year effect of amortization related to technology intangible assets from certain acquisitions; and • $5.8 million due to higher information technology costs.
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.
We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies and over multiple periods. Free cash flow : We define free cash flow as net cash provided by operating activities less purchases of property and equipment.
We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies and over multiple periods. In addition to these exclusions, we subtract an assumed provision for income taxes to calculate non-GAAP net income.
We plan to increase our international revenue by leveraging and continuing to expand the investments we have already made in our technology, direct sales force and strategic partnerships, as well as helping existing U.S.-based customers manage agreements across their international businesses.
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.
Contract liabilities consist of the unearned portion of billed fees for our subscriptions, which is subsequently recognized as revenue in accordance with our revenue recognition policy. Our contract liabilities increased by $250.5 million in the year ended January 31, 2022, compared to an increase of $267.8 million, excluding the impact from acquisitions, in the year ended January 31, 2021.
Contract liabilities consist of the unearned portion of billed fees for our subscriptions, which is subsequently recognized as revenue in accordance with our revenue recognition policy.
For the year ended January 31, 2021, cash used in financing activities of $59.0 million was primarily driven by $318.3 million payments for tax withholding on share settlements, net of proceeds associated with equity plans.
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.
We record adjustments identified, if any, subsequent to the end of the measurement period in our consolidated statement of operations. Income Taxes We use the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year.
To the extent our actual forfeiture rate is different from our estimate, stock-based compensation expense is adjusted accordingly. Income Taxes We use the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year.
Financial Results for the Year Ended January 31, 2022 (in thousands) Year Ended January 31, 2022 Total revenue $ 2,107,213 Total costs and expenses 2,169,097 Total stock-based compensation expense 408,542 Loss from operations (61,884) Net loss (69,976) Cash provided by operating activities 506,467 Capital expenditures (61,396) Cash, cash equivalents, restricted cash and investments were $898.4 million as of January 31, 2022.
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.
DocuSign, Inc.| 2022 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. As of January 31, 2022, we had $802.8 million in cash and cash equivalents and short-term investments. We also had $94.9 million in long-term investments that provide additional capital resources.
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.
Executive Overview of Fiscal 2022 Results Overview DocuSign offers the world’s leading electronic signature offering, enabling an agreement to be signed electronically on a wide variety of devices, from virtually anywhere in the world, securely.
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.
In January 2021, we issued and sol d $690.0 million in aggregate principal amount of 0% Convertible Senior Notes due 2024. 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.
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”).
The fair value of RSUs is determined by the fair value of our underlying common stock, the fair value of stock options and ESPP purchase rights are determined by the Black-Scholes option pricing model and the fair value of RSUs granted with a market condition is determined by a lattice model simulation analysis.
The fair value of stock options and ESPP purchase rights are determined by the Black-Scholes option pricing model. For RSUs with a performance condition, we assess the probability that such performance conditions will be met or achieved every reporting period.
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 impairment of operating lease right-of-use assets.
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.
We have invested, and expect to continue to invest, heavily in our sales and marketing efforts to drive customer acquisition. As of January 31, 2022, we had a total of over 1.1 million customers, including over 170,000 enterprise and commercial customers, compared to over 890,000 customers and over 120,000 enterprise and commercial customers as of January 31, 2021.
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.
We also paid $82.4 million for the purchases of property and equipment as we continued to invest in data center build outs to support our growing operations, capitalized software development projects, and completed several office build outs.
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.
Cost of professional service and other revenue increased $18.7 million, or 18%, in the year ended January 31, 2022, due to the increases of $9.4 million in personnel costs and $5.5 million in stock-based compensation expense primarily due to higher headcount and annual salary increases.
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.
As a result, over 1.1 million customers and more than a billion users worldwide utilize DocuSign to create, upload and send documents for multiple parties to sign electronically. The DocuSign Agreement Cloud allows users to complete approvals, agreements and transactions faster by building end-to-end processes.
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.
We offer subscriptions to our software platform to businesses at all scales, from global enterprise down to local very small businesses (“VSBs”) (including professionals, sole proprietorships, nonprofits and individuals). We sell to customers through multiple channels.
We offer subscriptions to our products to businesses at all scales, from global enterprise down to local VSBs.
Significant increases consisted of: • $151.8 million in personnel costs and $55.7 million in stock-based compensation expense due to higher headcount, annual salary increases, higher commissions in line with higher sales and higher payroll taxes; • $42.4 million in marketing and advertising expense, primarily due to a $36.1 million increase in spending on online advertising platforms to help capture the continued market interest in our product offering; • $18.9 million due to higher information technology costs; and • $7.6 million in consulting fees to support our sales and marketing initiatives.
Significant increases consisted of: • $102.5 million in personnel costs and $35.6 million in stock-based compensation expense due to higher average headcount, annual salary increases, higher commissions in line with higher sales and higher payroll taxes; • $12.6 million due to higher information technology costs; and • $8.5 million in travel expenses due to an increase in in-person meetings and events.
We finance our operations primarily through payments by our customers for use of our product offerings and related services and through debt financing. In September 2018, we issued and sold $575.0 million in aggregate principal amount of 0.5% Convertible Senior Notes due 2023, of which $537.9 million has been settled as of January 31, 2022 .
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.
The credit facility is available for five years until January 11, 2026 to optimize our capital structure and strengthen our balance sheet. There were no outstanding borrowings under the credit facility as of January 31, 2022.
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.
Investing for Growth We believe that our market opportunity is large, and we plan to invest to continue to support further growth. This includes expanding our sales headcount and increasing our marketing initiatives.
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.
The year over year decrease resulted in a $17.3 million increase in cash provided by operating activities.
Our contract liabilities increased by $143.2 million in the year ended January 31, 2023, compared to an increase of $250.5 million in the prior year, which resulted in a $107.3 million decrease in cash provided by operating activities.
We expect general and administrative expense to increase in absolute dollars to support the overall growth of our operations. 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.
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.
Removed
This is the foundation of the DocuSign Agreement Cloud, which allows organizations to do business faster with less risk, lower costs, while providing better experiences for customers and employees. We offer the world’s #1 e-signature product as the core part of our broader software platform that automates and connects the agreement process, which we call the DocuSign Agreement Cloud.
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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.
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It is designed to allow companies of all sizes and across all industries to quickly and easily make nearly every agreement, approval process or transaction digital. It provides comprehensive functionality across DocuSign eSignature and addresses the broader agreement process.
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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.
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The DocuSign Agreement Cloud integrates with popular business apps, and our functionality can also be embedded using our APIs. Finally, the DocuSign Agreement Cloud allows our customers to automate and streamline their business-critical workflows to save time and money, while staying secure and legally compliant.
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Gross margin is gross profit expressed as a percentage of total revenue.
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Professional services and other revenue accounted for the remainder of total revenue.
Added
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.
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COVID-19 Update As the pandemic continued in 2022, the rate of vaccinations, emerging COVID-19 variants, and shifting governmental policies on vaccination mandates and other pandemic restrictions have had variable impacts on different regions of the world and areas of the economy.
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Restructuring and Other Related Charges Restructuring and other related charges consist primarily of costs associated with restructuring plans approved by our Board of Directors.
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This has caused and may continue to cause new, existing and potential customers to experience rapidly changing conditions and disruptions to their businesses. While we experienced a significant increase in paying customers and revenue during the pandemic, we later experienced periods in which the urgency of customer demand slowed.
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In connection with these restructuring actions or other exit actions, which were undertaken to improve operating margin and support our growth, scale and profitability objectives, we recognize costs related to termination benefits for former employees whose positions were eliminated, the write-off of facility-related balances, and other costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed5 unchanged
Biggest changeWe had no exposure to changes in interest rates from debt obligations at January 31, 2022 as our 2023 Notes and 2024 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.
Biggest changeWe 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.
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 income (loss)” within “Stockholders’ equity”.
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 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.| 2022 Form 10-K | 59
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
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 $2.5 million decrease of the fair value of our investment portfolio as of January 31, 2022.
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.
Our market risk exposure is primarily the result of fluctuations in foreign currency exchange and interest rates. Interest Rate Risk As of January 31, 2022, we had cash, cash equivalents and investments totaling $897.8 million, 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, 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.

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