DocuSign (DOCU) 7 Sep 232024 Q2 Earnings call transcript

Good afternoon, ladies and gentlemen. Thank you for joining DocuSign Second Quarter Fiscal Year '24 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session.

As a reminder, this call is being recorded and will be available for replay from the Investor Relations section of the website following the call. Instructions] [Operator

pass Please to go now of Harwood, call Relations. Investor ahead. the will Heather over Head I

Thank you, Harwood, operator. QX Investor Fiscal Good afternoon and XXXX Relations. Call. welcome Earnings I'm Heather DocuSign's of Year Head to DocuSign

our me issued Thygesen our Allan is earlier release our today CFO, DocuSign's year fiscal on press and second The and on quarter today's Investor Grayson. XXXX Joining are announcing CEO, Relations call website. Blake results posted was

on the demand actual everyone to factors risks performance cause results change. Now, pace subject are some are are that based different. today's are to digital let statements assumptions related call and or and We our In to subject transformation and expectations reasonable, our this remind may affecting time materially at these our and believe unknown me that to best expectations therefore known estimates are forward-looking. of customer statements uncertainties our but be and they of on regarding particular, our forward-looking

read factors assume as update together of the date statements statements and except filings to based this law, of by events on future our risk to new Any are call. expectations in consider the content or SEC, our with and the no assumptions light with obligation required we Please and these forward-looking in information.

During present and measures. this will financial we call, non-GAAP GAAP

average weighted non-GAAP cash and billings. information and counts provide share we addition, In free flows regarding

encourage considered to performance. intended be to substitute not in are when GAAP or measures to measures analyzing consider our you from non-GAAP We isolation superior These for all results. our a

figures, release, can our at a measures directly most today's be found the earnings quantitative press information, GAAP which financial non-GAAP our to regarding investor.docusign.com. reconciliation those of refer information and on website please For comparable

turn to now Alan. I'd the call to Alan? over like

results. out closed of Thanks, second financial year quarter delivering first We half and good afternoon, the strong everyone. by the solid Heather,

portfolio. initiatives our delivering We in progress enhancements against continue key making product our momentum by our and to drive to business

Exiting events We quarter, are off eight improve track I our momentum partners five the recently with about to excited continents. and dual who having our met of visited come workflows. we agreement spanning where to plans thousands feel hear energized, cities customers

near-term, unlock our priorities the easier layer taking that's received two product shared layer. over-time, We more tremendous demonstrations for we're delightful. that future after our something making complex quite agreement product the and We're publicly on will management customers quarter. we're showcasing agreement our roadmap the vision, and intelligence and data. to building In validation aligned focused it presented And these over the

some came XX%. came results. this share from margin million, and total QX year operating in financial highlights quarter's QX $XXX non-GAAP revenue up at me versus Let in XX% at prior

many While we pleased we are expansion seeing results, others, with are tempering pressures rates. our macro continued like

executing innovation focused while uncertain navigating against control, we remain operational foundation further we the setting can and an initiatives environment. what drive to on efficiency, However, our for growth

Now upon of driven I demonstrates in want are our making delivery products. new progress leadership eSignature. our we how we're to and highlight features pace of innovation expanding The by our

In the deliver horizons. we're differentiate customers new value in As and that and I features short-term, customers. agreement new functionality bringing to streamline two to our and roadmap to about said, existing looking thinking workflows, on continuing we're ship DocuSign

leverages for identity which expand global to Detection end, in our prevent Liveness spoofing to biometric To Liveness of Verification. portfolio without verification signee ID being that AI-powered we continue present. more the results accurate technology verification announcing launch checks the identity Detection

helping ID Verification our is customers. already

types. DocuSign's that users available add-ons to has product functionality sign These important our it including reduced standard to all will frequent a plans, XX%. this an convenience. we time that and data for efficiency by year, improved save about all Later for with our expect feature plan to customer Our shows representing our expand driving wallet profile, will differentiator their be offering of for enable

stated past, is of core the data every value the it's businesses. on in vision. workflow is step the will integrated and and delivering that Web As an in automated, Forms agreement of into intelligent the seamlessly I've benefit when

we capabilities announced and more offering. During the and shipped to quarter, Web our sophisticated increasingly Forms

In July, available their environment, DocuSign customers on FedRAMP possibilities new Web moderate Forms for government to state and digitize which our federal became forms. unlocks local

enabling insights data ship unlock to and soon actionable users drive also We advanced data-driven uncover their reporting agreements to from decisions. capabilities,

is both CLM of Monitor CLM to a view our customers. This provides investigate before one quickly activity also now organizations dashboard activity eSignature ensuring and available Monitor for detect, and holistic multiproduct incidents easily can announced quarter we that respond comprehensive suspicious DocuSign and user to on and occur.

agreement it's customers, can high-value a Losing have reassurance. our impact. business powerful one even significant For

seeing industries, finance, organizations large agreement and entire DocuSign to like their transform across enterprise. CLM they are including We how processes their marquee tech end-to-end across automate

As company them turn closed generation a security. deals automate of their CLM help and over capabilities. agreement their templates, our to we an leveraging automate example, residential customer leading solar one our across document to workflow management simplicity helps largest agreement adding CLM our ever. process is of solutions CLM and X,XXX This teams,

market Our contribution which to year-on-year position. a overall solid our small represents business. growth, saw is a today of our reflection CLM We leading

of make encouraged into just our market. meaningful by wins potential to tap have towards agreements. begun broadly, this to we More continue the are the smart vision progress We for we and

Before generally we grounding final market. discuss this the a worth our true reminder what's in portion update, of with it's

resources largest solutions different but work workflow combining sophistication depresses on. enterprises expense. significant consumption size and and IT only Individual together when document so product solutions management, like suffer putting a categories with link only This storage and overall market. eSignature, of CLM, these together and customers solutions the can Today the

platform of multi-quarter current processes on a evolve our are We fraction broader coordinating path offerings towards a to at complexity. a capable of

already CLM in and our Today, AI such through market Our is agreement billions products business for monetizing are its manual the through improving millions from as businesses, use we automating of our products goal of management intelligent indirectly and of unlock search. to directly hours work outcomes. plus

We next step a new provide labs. on we're journey With can with where a our features find testing. Our customers we subset with sandbox AI agreements that labs, select customers. are AI of is share co-innovating

get technology developing reinforcing access By into our early with customers trusted to position that incorporate and earned the phase, customers the will products. receive in we working early further our feedback we over years. Our development we're we've last XX the

scale Next, progress update provide let our making we're the an balancing me efficiency. capabilities, go-to-market with with on

evolve our to growth self-serve I'd channel. making provide our like selling partner update direct motions we an market, an leverage how to product goes As approach. like on digital DocuSign we're in integrating omnichannel progress and to the

and of of most PLG one self-serve are important capabilities The areas our investment.

In making road delightful on delivering to experiences, addition our products not against improving experience we buy. but to critical scale by just self-service our and our and also try that product With easier customer it's a for for deliver much DocuSign growth, we're diversified such base, continued focus customer map, efficiency.

customers reach experience, relationships ecosystem, quarter, of through conversion within expansion important strength also is for made drive of noting website. traction and scale. approach resulting new We with traffic our part higher our on good unlocked We've in their an which expanded our omnichannel our We to the channel. directly partner rates product relative digital over opportunities customers

our agreement basis. workflows we QX, ISVs on offering their ISV embed for in pay-as-you-go partners, a enables launched eSignature consumption In to DocuSign

few in featured next of course important we Digital at of been notably the some X months, most Dreamforce, technical the the will partners Google Deutsche Over and Microsoft have Next, Ignite. most Telekom's conferences,

sign consecutive financial in direct second productivity. quarter of to billings One key rate on update. strengthening This increasing was of the higher-than-anticipated It's of is our the a renewals, will execution. the our quarter, Blake the positive omnichannel contributed sales outperformance pillars for of go-to-market on-time of which is our a touch favorably which

their international since friction, our reduce and addressable our use solutions they relationship This business an Australia's are to the of largest streamline quarter, processes remove cost customer-facing of internal remains we banks business, expansion In with past Customers us. effort both deliver our and and one in market, experiences. XXXX, making to part progress. better largest expanded

previously, about was I and look is globally. hundreds met customers DocuSign's our product had potential commented The map And on forward our international in The business contagious, presence our our through upside we Events. Momentum with growing international to excitement as road we large. of

scale We future agreement and on global category our position. building the market trusted are and of shaping the

document The future of attaching legacy yourself format. agreements is a to not about

agreement continue reducing our product trapped data intelligence evolution we by and friction time. the and This As productivity, customers' space. unlocking the fundamental increasing in adding agreements, shift our we're is a saving in

agreement DocuSign every confident up there's Moreover, process. other on full our size as world's player, company on the to companies improving SMBs the advantage process solely the focused focused competitive enterprises. largest for is the I'm in agreement no of from end-to-end largest

know, Grayson, Blake job to Blake of now as the who, us employees look our CFO. worldwide DocuSign's success. thank I continued done to the mid-June welcome team power closing, navigating has and forward has partnership. to driving like our our addition proud a be their to team, want tremendous our I'd I'm environment. valuable proven you in as in In to I joined for collective the dynamic

turn me financial Let our review over it performance. to Blake to

my afternoon, Thanks, excited really to everyone. call and as words, I'm the first Allan, kind CFO. join DocuSign's good for earnings

workings few as I've and to transform gained we last considerable value business the months, look our proposition the workflows. Over into exposure of agreement

customer a what opportunity that share securely. is and DocuSign. quite powerful First, The has to scale deliver a the products led software rare faster, and agreements business our to enable customers large. join easier that base enterprise is I'd our our space. like to ROI high me We for complete in in more brand DocuSign

let investments. am in to scrutinizing achieve I environment still optimistic we particularly results. our while work that, about their do companies And QX demand turn appropriately where With are goals, to future, our our to a me have

second subscription million. grew $XXX $XXX to For XX% increased million, total quarter, revenue XX% and year-over-year revenue to year-over-year the also

I total our with in that is second to international updating outpaced we a XX% our representing progress revenue. reach $XXX the market future growth you market domestic largely ahead, excited the growth Our about as and a on the our untapped forward greenfield XX% exists footprint to I by million to It revenue globally. space of increase work pillar opportunity internationally. quarter, of think key year-over-year our I'm growth. When look business

of on-time year-over-year half rose level higher was XX% of Similar $XXX a quarter, through execution QX renewals. to encouraging us It the higher to year. by saw billings to first rate million. billings the our we maintain QX of is the outperformance sales last in see driven quarter Second

the However, and given communicated of the with line in macro expect to previously expansion expectations. the our in some and growth half deceleration is back year, continue which billings environment headwinds metrics, we

reach our increase addition base a total customers million, includes X.XX to the new base customer XX% year-over-year of XX,XXX approximately to added the direct We approximately XX% a X,XXX increase. an during This total customer which XXX,XXX, direct quarter, customers of brings year-over-year.

also year-over-year X,XXX We a total customers contract in value customers. with saw X% increase of an exceeding $XXX,XXX a annualized with

the related Similar churn. quarter-on-quarter this quarter, decline customer buying to in partial patterns, to rates was segment and primarily lower customer expansion last

as of we differentiate the recognizing However, innovative are customers product more frictionless features line-up ship our our and our functionality. to and deepen features offerings, value adopting

resulting product customers to optimizing stickiness pleased have the increases an XX net to XX% five now adopted continue Dollar dollar budgets we that trend spend, And seeing downward. and pressures QX increase macro year-over-year. direct expect are we our rate and retention as in This quarter. We're the customers rates. moderated for points features, we of anticipate was retention over XXX% of more continued expansion net nearly scrutinizing or

insurance we business From perspective, a health of care, relative and vertical pockets strength within services. saw

are most help the to customer is into the estate. sensitive us insight DocuSign's as interest more offset environment, pressures diverse and enables strengths to gained of such from One base, which that verticals I've real significant rate broad

or installed the the macro Given with will capture innovation, XX%, the the depth the be our making DocuSign of and opportunities. in expansion in base well margin stabilizes we believe large improves, gross year. investments line second we're that Non-GAAP breadth prior as positioned for product to and was environment quarter

was XX%, margin in the line prior with gross subscription non-GAAP quarter year. also Second

prior of compared the to Non-GAAP XX% year. reached basis QX points million, from XX% was year. income up XXX non-GAAP operating up last operating nearly $XXX margin XX%

discussed last against executing call, As plan. on our investment quarter's are we

drive to Our on top investments line over in time. vesting We'll disciplined our philosophy is consistent. continued maintain growth

$X.XX, to year to still better last non-GAAP the expect they year, than this of expect with we was $X.XX of restructuring X,XXX margins an year of investment to our efforts. the prior to $X.XX. Although we were ramp back compared ended half year X,XXX operating improvement QX EPS the with QX exit We prior. employees in from

of $XXX XX% and million, an XX% was year operating same the flow increase a versus representing ago. cash margin Second quarter a quarter

a flow at $XXX up representing the year-over-year XX% Free also in coming million, for cash quarter margin. was XX%

our consistently million the in balance generate in I'm exited We flow. business, sheet, months. will am cash more investments. more next cash strong over ability with be I we impressed $X.X the free billion regards As equivalents $XXX with convertible learning and than about approximately that currently debt the to cash, maturing few With to have QX

strong the $XX And strong provides as during the business to do a operating and reflection ensuring about quarter of Our this, of position Related so deployed. repurchased model excess a XXX,XXX million. is in that strategically redeployed flexibility. cash thoughtfully for is we we utilizing this capital cash, we will our approximately level our shares capital think leverage

opportunistic, program repurchase we shareholders as excess being announced to million, We size dilution are from and continue to that our million to appropriate. as $XXX up share the on also we today reducing returning focus capital $XXX increasing of

In pay on $XX program, the impact settlements, during addition reducing used our million due the of dilutive programs. we taxes repurchase our quarter, share to RSU to equity

financial With we're that, turn and macro me of also reiterate, competitive light to cautious our our pleased an QX 'XX results, environment guidance. dynamics. and while uncertain To fiscal QX we're with in let

total the year-over-year a and or billion revenue quarter or fiscal For to expect X% year-over-year to QX year X% and $X.XXX third an 'XX X% million $XXX $XXX increase. to increase we billion million 'XX, in fiscal for X% to of $X.XXX

$X.XXX X% year-over-year to QX $X.XXX expect we increase $XXX and for revenue 'XX in to this, X% of an to a X% Of billion increase. fiscal to year-over-year $XXX billion or subscription million million X% or

to billings, $XXX rate or fiscal $XXX million billion growth For QX $X.XXX in X% 'XX year-over-year. we to expect a X% billion for to of growth and X% million X% or $X.XXX year-over-year to

gross fiscal to both to QX be XX% and non-GAAP expect margin XX% for 'XX. We

to and 'XX. We XX% XX% QX to to operating expect for XX% reach margin non-GAAP XX% fiscal for

million QX We expect non-GAAP XXX 'XX. to for shares average diluted million fully weighted both of fiscal outstanding XXX and

customers In team commitment closing, thank in our look our to for their a environment connecting to their many of challenging in the want with welcome you I near to and future. with I warm and forward work

we and sustainable key will for that believe of are growth growth. against focused executing on being drive the well as opportunities We set that mindful efficiency initiatives profitable, will expansion future as up long-term us

process. more helping forward solely evolve on only scale look updated improve company to help continue as customers that keeping and Allan remarks. and concludes our we our mentioned, the more As are our at progress you is the category focused we efficient. customers on agreement the That productive We prepared become to agreement workflow

With operator, call for questions. the up let's open that,

JPMorgan. session. this Ladies from comes a will your with and [Operator you. Thank Instructions] of question. at time conducting question Mark we first be question-and-answer line with proceed the gentlemen Murphy Please Our

Sonak Great. AI the front. you congrats the is Mark the just for so Thank on This quickly Kolar and question Murphy. healthy on this for Allan quarter. execution on taking

AI products you incremental exciting around the out launches call Momentum the ID of longer areas, recent any agreement example? there of number you summarization potential product other which at in would upsell some greatest Conference. Are specific whether see for or or a term, that's the the discussed Verification, You you monetization had

Look, products we agreement at of Yes. AI every I the workflow. our with impact step think practically will think all

five been held leader CLM job Generative a to space, out. been category. rattle think we just off say, AI, certainly a with that of couple were I'm in have saw less professional we And I broader, -- We do with to completely that investor by technology. strategic coming services. made weight but interested know the So an that in. I or and with early We most and that poised agreement be is don't couple better maybe lighter one AI. analytics years that can call ago fundamental a think in should investments a I seamlessly, But more a category with there's a back four together now substantially revamped that Generative

and think I'm transformed it to so more the how excited very agreements. to enables intelligent CLM And deliver about us category

you XXX%. we're that Liveness you category detecting AI-enabled. are it I IDV. I think Fundamentally, of entire mentioned and then ID who and is of just The today's simply upload that be without present you that recognition ID, your to convenience. really that that ability would where dramatically ingestion not agree reshapes Detection and trade are takes to AI and matching possible and technology the and risk off

across we automatically that And the think AI the what's works flow. detecting So DocuSign I think but a today, field. that's eSignature use in one. entire We agreement. it That's working you recognize going And do good on it I when your today. the use really

to that in order, So them got put though. I've

follow-up QX? Great. demand trended any Thank underlying can stability? Blake. trends relative of maybe a for terms Were quick of you. you. macro or how QX have provide that you for there And the improvement relative might in environment then Any Thank of pockets context to signs in

Thanks Sure. question. the for

think, from think similar, QX. perspective, from QX I macro seemed a overall, I it into that pretty

areas show talked You've got stress. a verticals the and about remarks. certain in under that verticals some and couple prepared obviously are still And you that on strength, have certain we those relative other

with so And that. to have deal we

board. the side, CFOs I with position are I on people is in think investments point pressure the how my we think scrutinizing generally that deal across biggest the that macro

QX, And but obviously, trying that value nothing provide But us, we're I stands from with in, still QX, think, so nothing of can. for environment. would say, work from I it's them an uncertain we into bit to best and the out a

from Jefferies. with of the your question. Thill proceed Please Our with comes question Brent next line

product-led my I Allan, taking the But with could it a what more line been focus focus execution? the and been the for Thill. you growth, one for challenging? to question know I about to talk on is with larger attract Blake. And customers? has the This mentioned on about has it bit you talk to how ask go-to-market to on growth. you Maybe, little has product-led wanted Hi. been Luv in is Sodha it just Allan. Brent Thank your welcome approach expectations? Or

first, on the will future. is direct That our case Yes. That I'd the for our primary sales be dependent say, we foreseeable remain primarily go-to-market. channel.

we of a all in team And particularly so mentioned, with that is Also, of features that process the another and valuable huge seeing renewal products our execution quarter delivered, I'm more happy numbers management the and of saw customers make post-sales sticky And renewals. there. the on a that. customers. as throughout the you're to, result strong pre-sales, Blake progress adoption to on-time we we sales nice emphasis more and alluded as

making. progress restructuring mention field look we the sales be pitch of are we, that expanding we significant XX% given the the I'd our will it didn't also continuing But of to ahead, that even you execute. effort. our effort level. was that think, need and product a to As very I with in yet, as direct on be I'm organization, continue And the critical to is they I to recall, if higher bullish offering remiss in of will think team made February, organization. I an at transformation adjustment, able breadth be

and the is growing other can of part, points, seeing add faster, are partner. leg very grow so luck. that and features two direct I'd enable partner the highly, omnichannel channel So beyond that a and we bit stool to with team's is are our think, nice that will really effort direct that I'm us a where speaks little there. really starting the good have ship self-serve third as Good and we are digital just the progress there. primary, I sales there And pleased is the to execution, mentioned, that then channel business the I we management of progress,

just had Yes, for Blake. quick Perfect. follow-up a

from I see potentially on it the bit that down any Just X% But metric? when or net know just X%. indication a would retention, said could the further in dollar we -- Blake, some as to trend little stabilization you

sure. Yes,

the learning and only only So dollar for it's year. me just our The a as I'm customers least at retention, is a tenure for with a DNR, reminder direct for and business. the also of then net those

it Our communications investments, figure line in kind macro we expect our companies expansion trends. because the smaller of map why heard this covered are remarks the us do previous where how And say the focus can of impact a as and scrutinizing into that's exclusive can that environment opportunities. to important try lead communications we macro regarding forecast. really is continued And product you pressure in chances and to for tough is to road QX. development prepared so with provide me the trend on In this is that's

that to customers that impact ROIs to road a further lot of to to underway better with to longer-term that's provide time. we're productivity us time we to number, to not about do opportunities. and chance of try and And product trying got But us kind with be more call that talk initiatives them any provide can we've that there. for progress this to opportunity So to out the drive regards map beyond better and essentially make at able prepared QX,

proceed next comes with the Tyler your line of from Please Citi. with Our question. question Radke

and your taking on to here. get Yes, the congrats I question. thanks role wanted for perspective, my just Blake,

highlighted after you make the of that? opportunity, are you that business big any coming as size over saw a you better opportunity thinking on potentially Thank investments go how to international potential the board. that thoughts On time? And you that you. But about can on that

Sure.

North at is I there. XX% it XX%, is total the flex only revenue. just and of that of America previous role yet think I I business the finance for international huge and group history, our led the from international perspective outside TAM in Amazon, just and one bring my And of experiences the the a

long the grow there, for over So why a term that there's us reason shouldn't percent of opportunity no I think the as total. the

We an opportunities. I in the think that Germany. opened about in you've heard just Munich expansion talk office Allan

green shoots opportunity. seeing there, investments making are we and those we so are And

right? we a about about talk when like So It's development, not we kind of us, endeavor. And a globally. product for North only development product it's talk America process

cautiously that of And that there. on to the so have expand a business, this opportunity focus and we keep we our really optimistic I'm when do an global we nature footprint

I color more bit can Maybe there. add Yes. a little

So quarter. EU as qualified an let's on last the side, product the example. for We Germany take Verification launched ID

qualified And We market in unique for a provider the us the EU. puts and it position. regulatory trust are particularly those is in very sensitive German market And issues. strong to

of and Conference previewed the log-in added the launching One in reducing things wallet with traditional it more at further the once Momentum a in been the have by or capability we auto that is this we're you companies essentially, trade-off once risk can locked that's you system, friction security. future, IT faced. And having

a localized in a very is and we're, end well. I So we August, mentioned, an office appetite Japanese the CLM, market we're going stage a there that. And believe opportunity Western-style weeks at for again about Blake was interest the lot we market. introduced optimistic Japan, and even And the just ago. Tokyo German and in fully in there's first there, of launched market next booked Japan, of on development. CLM as We're position which think, Sunday. in our In I bullish just very an as I'm few the the I at of earlier

everywhere agreements where we we where signed. markets can that and are available that level, essentially at our ensure self-serve partner will beyond channels use invest So we're to the

slides on at growth. the interesting in four quarter, And the for has the double-digits. seems been I growth. some presentation. color in was sorry, last billings quarters trailing follow-up question underlying certainly, there and Thanks four-quarter like the look billings Great. But quarter a low over four growth stabilizing It billings rolling just if

one quarter. stabilizing about Do the this subscription feel as growth kind about you the normalized business puts environment like you you. we saw of process and You is should quarter? the only kind Thank think in just growth How the takes of point decel here?

any I'll And in, to sure a Allan wants color. will if add stab Sure. I'm and he jump take

did QX adopting pleased But have really prepared how are performed. at -- year-over-year with more heard yes, or remarks, revenue us. an So of like increasing features year-over-year. customers pace do double-digit and you we or generally, Customers more direct the work QX. growth ahead five billings We in features in to still adopting are five

count quarter. produced year-over-year. flow customer base we really International well. we need to total large on We a foundational double-digits a strong free obviously, cash flow of free pretty drive the generated quarter us. and customers. of grew cash $XXX grew Our decent growth, retention but And And also work for million for rates

to using think appreciate I I four-quarter and number. regard that with with that every there are billings quarter And takes number. future, puts the you're the trailing

there I think Over strength that's but pressure, macro that to look as in and have forecasted and previously is a right? some around good it's way we QX QX, rates continue, to at renewals, we've it. on-time uncertainty. And mentioned, lower expansion

volatile. I it just year is full that for a would actually bit a guide the that quarter. can our number we say was be that last announced little billings so than billings And stronger

deliver is product expansion. future the have what that to turn again, But can a And is product going over this us, free time. book we opportunities. forward, fundamental deliver on road But growth, -- growth me, that business that's and very I'm a that for long-term focused flow generator. think for the believe on the large we I business, long excited a period we as of we're on cash innovation continuous term the drive on chapter core to the how about of map to So do that focused of we have be base takes new some can most kind

would I add. that's just said, well I think Blake.

year happy acceleration phase to towards is further come. sustain enable we're years transformational the the to we nicely. this satisfied a not executing next we're in business with investments that and the I that, and the DocuSign growth. to planning we're for where think able are making We're But of

Our question Please of comes next Roberge proceed the Jake with question. line your from William Blair. with

expansion taking motion? as Thanks most all at been is of the the the impact quarter. funnel headwinds macro changes to gone throughout still on and of the the Has And just July front, linear through for Hi. especially macro questions. that noticeable or related started Have there August? the top how demand then to we've

take Sure. stab. And a I'll

question to me last your try first. Let address

I they're I due trends, linearity, it's the this results the guide. be would think can reflected Monthly on generally in business volatile to cycle. our sales linearity our line What if in will, you historical is say with that just in our already trends.

to perspective. a out nothing call material So from linearity

before, very I have a And for on the think is X.X large biggest you base expansion, part. accounts. think, over macro I the business, component -- we of referred the customer I to us, million as

probably so the that, side rate. see more think, in what is is is impactful you the that can DNR I component and the on expansion And

Yes.

I relative I new think in the add I is the SMB that doing would that spot our customer digital is on And reflects well. that. segment business, strength think, that I acquisition. simply

I think about. it talking was reinforces the themes that Blake

take a with just do this Allan, more point? play not those changes likely when made feel broader behind a think And then just Head years the And are quarters, bearing the to a a riffs, you at DocuSign like bit few organizational you those of for quite fruit given Do you then start changes if or changes structural Sales year President. changes us two Helpful. CFO, past and over new as out? of

you're excitement I'm months and we've for correct. able really been hungry who with to that substantial deep to happy but has We've chapter. absolutely DocuSign's attract experience, next XX the it's leadership team challenge to XX the over a the of world-class attract. effort So made also a last

now, folks just able speaks prior. of layers. me in do opportunity to positions, in fact, it we the DocuSign's I the relatively directly and time. don't have also for and arrived, I couple I any the but quality kinds full that's of company. both brand the of reporting to case a open been that think next two team to The long the top I for not been a the have layers and into we've after attract not me, think

the progress really level. the in making some So in I we're think at leadership key of roles also good next filling

us. opportunity capitalize fully the now So I ready of organization feel like the poised is and more on to ahead

in and that's into product the map, is plays that the transformation and then years. both the GTM for that how the of road outer requirement -- for the enabler terms the In growth

do first. things. the on we progress make didn't that other So couldn't We

line of your Our next Please question with from of Sills with Bank the Brad question. proceed comes America.

much so around to seeing. incremental that regions international here? And see traction to ask Any been from you'd there? should any call countries investing wanted and question you we you're Thank out are perhaps Great. there international, a you've some strength expect in I the as

have. outside of the America, say we the which comment. I appreciate just necessarily goes the rest. I'll kind just that general and wouldn't think But about I of we standout I it Regionally, North offering strength there's one to the because actually value just had versus notion product

do we as far further. and on basis. plans expand And we'll as that case-by-case going a new larger like so I new regions, that how And also think that take

right, I us. with not think, think for I the cost expand thing it's large, is the us, business is terribly this in one nice marginal to

a that and scale that. and sales than you out and anecdotes to the opening and to that it's thing, And around laid leadership the provided want so with office like But have situation appropriately order us, in the don't reference of and already Asia have things have other Europe. Allan anything to I the right countries for individual kind

I double-digits. the But in all general, Europe, I'd LatAm, say grew regions, all international think APAC,

It would region. across international I progress world Internationally, what for us. our was is the pleased regardless of with say we're the strong Yes.

Yes.

direct do organization, a past, But like existing you up right like of in execute? like the are you're -- regard comments feel Great -- you're kind that restructure got effort now place. you efforts where the are you. feel in to you just organization here largely feel Allan, then the sales the of hear. think And kind plan in set to the team that you to such I your restructuring with and do the can Is in place from the place organization? Thank that the

obviously, anything nothing mean, We we could on continuing or for restructurings organizations. I major risk and things that major any always our I to you're don't tuning -- have like like that, a or plans of considered but that. would nothing evolve sales and think the we're be scale any

Karl your line Our Keirstead proceed from with of with Please comes next question. question UBS. the

we XQ Anything function guide, couple ago, two Maybe Thanks. a billings implies greater that unpacking a renewals? might this flag don't but the great. mind know phenomenon down up it's Blake. it years Blake, if Okay, had the for sequentially. you on-time I million. typically you obviously Is $XX of that? that else around

is renewals Sure. every renewed or us that can customer on-time we're is that The be situation time, out. different, renewals. they in the right? renew can for Yes, be the the can Deals guide the trends pushed function on early reflects continued they on-time seeing of

takes quarter every on and that. puts So

There of The and to execution. they been has are normally closed sales slipped due year QX. that out -- first to that have QX deals in may the half strong

on-time But renewal the generation, for that thing we're improvement renewals or timing growth drive obviously, I think it And note for for that is in well, us important is, the free a execution. positive. relying super sales so And positive it's to not incentives foundational of cash on us discounts really side. that's It's that drive that and flow to renewals. on-time than on the is a better more on

so renewal those deal just because the come top of an when on that up is stay hard teams they renewals And a just on-time schedule. to renews for really were on things

net that's components pressures guide DNR the other strong. there. earlier seeing essentially retention that the And like discussed with we're so that's we now the macro pressures, And pressures to far regards as the as just the and super with

Yes.

Okay. Makes And one sense. more, Blake.

your of to a roughly margins was land couple that never year, guidance, around soft of it for fiscal framework year? this operating this the was obviously, margins. a might cash Your it flow. might color the as Is flow cash points where shake formal that predecessor, out operating But still below kind

a where so margin, speak. place specific not to in I'm guide flow Yes. to a I kind to want cash of

generation me, for to is I company long-term I'm a drives business growth. what think the that looking profitable sustainable cash for

cash the a of of flow think you'll cash I'm CFO, in flow, timing and million were cash that fact And $XXX about. as we've I But selfishly delivered -- those such. a pretty business -- generation that, XXX yields. on healthy think quarter model super I and those fluctuate generating excited that the free it's based operations, $XXX see of million

with comes Morgan Stanley. question Please from next Our your line Josh proceed with question. the Baer of

for question. clarify the you one the topic Thank I more Great. to just on had renewals. of on-time

upside of that billings renewals. but was So level that the same drove what saying you're of this the now reflects part guidance on-time sort of quarter, now

the that you're in idea now see And on-time if change renewals is QX, billings? a guidance? been the right that of into upside of how to kind stay So in wouldn't incorporating there's same things you

Right.

as thing So learning the this I'll go. year an try on-time ability your pushed is with doing renewal in essentially maybe that momentum. we to more, The on-time prior clarify this to was out affects that bit renewals I'm continue a that

timing it's So a situation.

in it. with out so execution kind strength that of little first And you bit run of half, the have you a continues, though it's that just room even on

So really timing a opportunity. it's a more than growth of situation

quarter, year. full communicated was why and that's you year that. And increased previously the we see the last for that So -- this guidance again, actually in the and guide guidance

nuance it's in on flows of that how through. there in the So just time been it's guidance, all but

departmental the like process one you. or think then process or versus different And are workflow? about certain some DocuSign Thank workflows was is sort two maybe it. just wondering, possibilities agreement Got that or there? on like where others own I eSignature just in HR where agreement onboarding big into full integrated workflows. the How departments picture more and the Okay. of should other there to basic DocuSign

Then, Yes. going of in real areas obviously, on you now DocuSign, and I would From estate we very were had all sales kinds perspective, strong a use enabled applications, BXB vertical quite the But and of early lot. forms where HR moved all was strong. we're DocuSign to. area a very for as particularly I'd by seeing that was say, pick to And few it to a say start. see we a that people workflows. finance alluded

and with strong a it are more very on there as So management and that. efficient SuccessFactors And more focused more days, partnerships see of we We Workday, lot in making have that deployments adoption transparent. in enterprises Particularly procurement. and automating and well. these process with procurement there

example, our the an lot in space use a pharma cases. as of So from comes procurement strength

efforts. uses We have a and for eSignature supply it's fantastic pick really chain focused for different And both relationship NVIDIA, a CLM. with DocuSign one to their who on

if industries, But all So Does industries that had all some really, that practically we will. it's this industries. -- But very for eSignature this at point, you point, started enterprise broad. in fixed starters major at across it's broad we many movement, the were the and pretty workflows help? different

the comes with Our with proceed from MoffettNathanson. of Ader Jackson next your question question. line Please

taking Great. Thanks guys. questions, for our

ago. headwinds subside the the your than you right, get set just up value that the was customers. First and one to get from the in back, environment, putting on that It's product pass macro feature And the make once given I'm curious, the product even a into how value products $XX all sure only just I macro broader to the to and been But you you've or back understand, making of are don't deeper expect $X numbers? put set. much or hard to years couple it of probably

done a months adding product we've certainly release core would up to what push. last fair pick is or say It's really I Yes. and nine pace the products. so the of half our What over here innovation

intelligence into us. and I at think transformation of the the some of some of still releases Momentum. early at agreement is platform broader both DocuSign that We ahead big previewed the this and layer vision

watched it keynotes, of overview really found website, on If our a gives you it's the good Momentum heading. where we're haven't already

I every come a going that things that like applications, So every part we orchestration, one just be are as think how customers DocuSign to and is third-party I of of incredibly are more things make to get done. interfaces agreements to example. dynamically ISV really enabling related agreements. an an platform Components think, workflows at-scale holistic this the example assemble where That's re-architecting of of to our powerful to

I something think was will to. Enterprise we begin that Search

is We your out do roll being in and that entire agreement to base. to will begin semantically able QX, across that

you agreements. force for that team have you're can a We be that an your going and not use relevant lawyers today. imagine the might that all looking and to we capability the which provide contracts. large all through all and in AI let's are majeure agreements spending expressed That's to would ways months transformational do example, that interpret that dynamically that query. Today, deliver the So your in symptoms give of be that really

begin, great. And our just they're giving I of been that to of of shipping to later us a enabler agreement say of throughout to-date, the complementary agreement even position. for still this been model I we that creator all -- have leadership repositioning So next a more to these many intelligence while. workflow to of I is -- And will And broader the DocuSign we're that, year products against come. the think, year. it's and want as this and releases then But market think we've delivering

so us ahead of from And perspective. have I think we much so runway product a

what should Blake, follow-up. like just stock-based expect plan quick trend Okay. headcount? what's in comp? the Great. what should to And then for it I'm or given surprised a year-over-year the we up see

Sure.

lot that's We to brought that And slightly relatively the the new review for us. our outside consultants revenue percentage folks on our comp steady has leadership The QX on as with about average stock-based we've a than held of peer higher year-over-year that were compensation, is a with group. number the in team. So do driver to XX%. increase

that. of see And you'll see people, and one me -- you'll those being so

the And between so something to it when is and we're you're but and paying about asking attention that's of, definitely gap cost. mindful headcount

will through that. obviously, so but time, And we'll take that work

line the Research. Please with with proceed Our of question. your next from comes Zukin Alex question Wolfe

Thanks I guess, two for and Hi, quarter. question for me. solid congrats guys. the on a taking

it's that the think, it I meaning is question control, how net extent, much of is to go really, around under one, back consolidation about. first market, CLM+, of macro new pressure some a already net the you your retention I important. effectively? how really Identity because, want much to some the really retention to To in of number a The dynamic CLM, versus products your And that and product I talked ask interesting you've competition repair or -- released loss because extent,

below give earlier, quarters cohorts the that you're shouldn't any to what of comping seeing is after start of we the kind around -- should at level that it to confidence question way least just there or stable? many us like it normalize So like how be dip when some kind

Sure. a and every gives It's expansion. to combination, expand, time you've that can that dollar question combination execute we would as trying that it What control investments into for then their save that it's they over and they're with want cohort awfully ball a think and our can look But have to try right? also we macro I is and combined tell you do challenging to effects I it it's say for that, opportunity your scrutinize it me what they have us under the provide side. that customers crystal we that essentially if do. kind products on nailed We in of of customers

think I component of that rate. a that kind double it's a affects So

on at to destinies so product end execute part its part kind I that map of But our our if environment. maybe time, it's like control we of macro it's over under will feel And also Allan and the that. probably day, -- is of the road it can the add more in of hands.

expectation and certainly of that. our the but quarters I set level. do we'll then we with to able And be that to we've agree. And to with it product downward it was how going want release get look, I be that. it's system, few a to see healthier will we we No, do said a that trend,

at point. So as can much say that's we this

range That question a and both is, business question asked, in tale the of down even single-digit guess X% like back. subscription love question makes you a Street guidance accelerating of appreciate got kind that some your revenue. I subscription I cities, that It the implies year. and again, kind and QX, the growth year. the the you NRR sense. think bit in in And it. we other billings itself The extent, why billings growth, feels second the And right? revenue the if range To then some the very of about Okay. But Karl half. of to extent, exiting like double-digit it comes right, low implies you've CRPO accelerating that's in two do in into goes But the and has conservatism to next

that that get just to would kind to would of be So you what for the to help like it looking there? kind see from expecting for that us of at exit have level set QX, factors you're better rate be

Right.

better mean, was guide quarter. again, full year So in the is in our than it or previous line I

staying guidance. line or better in that we're in So

first call times I referenced and we've what strength that the renewals talked the about that the is the think like of year. in a half that on-time the couple driven outperformance in of has on

long that, and so I'm the have DNR then like innovation it that volatility you but -- we reaccelerate us. for noted around not on growth the creates line macro product the uncertain, it's And over a And term, expansion in rates pressure how do we of and and and frankly, us. putting time on front particularly

a that customers would a tell how time like I opportunities expansion. this of company, do a is appreciate our on as team we product road way and so leadership in the XX-plus as provides evolve percent you map us And for that

that solely themselves. will on road deliver focused We we're can the we map, And if show so results that's on. what believe that

to and to enthusiastically that the I team. was But to in -- say, the customers fact quarter, validated vision proud mind, were think happened the just that I the yes, incredibly path. execution, map partners, everywhere solid we're they went. I would that I And that. us right and my validated gratifying and present this best with our agree road able that I we thing tells the I'm of kudos and on

for very and think And result we became So bullish that map as just road the I future of got. on a the pronounced the I DocuSign. of sharing that the bullishness think long-term we're more feedback

our if all is all And So I deliver very goal will be that, that -- think well. do is to be that. against we will

and everyone, our here and and feedback operational joining driving efficiency at the investments product you, value. results with balance pleased Thank DocuSign. transformation close. today. want Thank drive us with We to for shareholder you we're us. Maybe to We're joining for

for Ladies and teleconference. gentlemen, you today's participation. your this does Thank conclude

at disconnect may and time day. a lines wonderful You this your have