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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________

FORM 8-K
______________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 10, 2020
Commission File Number: 001-38465
______________________________________
DOCUSIGN, INC.
(Exact name of registrant as specified in its charter)
______________________________________

Delaware 91-2183967
(State or Other Jurisdiction of Incorporation) (I.R.S. Employer Identification Number)
221 Main St. Suite 1550 San Francisco California 94105
(Address of Principal Executive Offices) (Zip Code)

(415) 489-4940
(Registrant's Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, par value $0.0001 per share DOCU The Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨



Item 2.02 Results of Operations and Financial Condition.

On March 12, 2020, DocuSign, Inc. (the "Company") reported financial results for the three months and the fiscal year ended January 31, 2020. A copy of the press release is furnished as Exhibit 99.1 to this report and incorporated herein by reference.

The press release is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information shall not be deemed incorporated by reference into any other filing with the Securities and Exchange Commission made by the Company, whether made before or after today’s date, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific references in such filing.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On March 10, 2020, the Company entered into a letter agreement with Daniel Springer, the Company's Chief Executive Officer. The letter agreement amended Mr. Springer's amended and restated offer letter to remove equity vesting acceleration provisions triggered automatically by the closing a change of control. A copy of the amendment (marked to show changes from Mr. Springer's amended and restated offer letter) is filed as Exhibit 99.2 to this report.

Item 9.01  Financial Statements and Exhibits.

(d) Exhibits:
Exhibit No. Description
99.1
99.2
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: March 12, 2020
DOCUSIGN, INC.
By: /s/ Michael J. Sheridan
Michael J. Sheridan
Chief Financial Officer
(Principal Accounting and Financial Officer)



Exhibit 99.1

DocuSign Announces Fourth Quarter and Fiscal Year 2020 Financial Results

San Francisco – March 12, 2020 – DocuSign, Inc. (NASDAQ: DOCU), which offers the world’s #1 eSignature solution as part of the DocuSign Agreement Cloud, today announced results for its fourth quarter and fiscal year ended.

“The fourth quarter wrapped up an exceptional year for DocuSign,” said Dan Springer, CEO of DocuSign. “Since introducing the DocuSign Agreement Cloud a year ago, we have dramatically broadened our offerings while maintaining strong growth from eSignature. With our latest move—the proposed acquisition of contracts AI pioneer Seal Software—we are continuing our drive to make organizations’ end-to-end agreement processes faster, simpler, and smarter.”

Fourth Quarter Financial Highlights

▪Total revenue was $274.9 million, an increase of 38% year-over-year. Subscription revenue was $258.1 million, an increase of 38% year-over-year. Professional services and other revenue was $16.8 million, an increase of 38% year-over-year.
▪Billings were $366.9 million, an increase of 40% year-over-year.
▪GAAP gross margin was 75%, compared to 74% in the same period last year. Non-GAAP gross margin was 79% compared to 78% in the same period last year.
▪GAAP net loss per basic and diluted share was $0.26 on 181 million shares outstanding compared to $0.40 on 167 million shares outstanding in the same period last year.
▪Non-GAAP net income per diluted share was $0.12 on 194 million shares outstanding compared to $0.06 on 188 million shares outstanding in the same period last year.
▪Net cash provided by operating activities was $45.5 million compared to $34.1 million in the same period last year.
▪Free cash flow was $15.5 million compared to $22.8 million in the same period last year.
▪Cash, cash equivalents, restricted cash and investments were $896.2 million at the end of the quarter.

Fiscal 2020 Financial Highlights

▪Total revenue was $974.0 million, an increase of 39% year-over-year. Subscription revenue was $918.5 million, an increase of 38% year-over-year. Professional services and other revenue was $55.5 million, an increase of 49% year-over-year.
▪Billings were $1.1 billion, an increase of 38% year-over-year.
▪GAAP gross margin was 75%, compared to 73% in fiscal 2019. Non-GAAP gross margin was 79% compared to 80% in fiscal 2019.
▪GAAP net loss per basic and diluted share was $1.18 on 177 million shares outstanding compared to $3.16 on 135 million shares outstanding in fiscal 2019.
▪Non-GAAP net income per diluted share was $0.31 on 191 million shares outstanding compared to $0.09 on 159 million shares outstanding in fiscal 2019.
A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures and Other Key Metrics.”

Operational and Other Financial Highlights

•Seal Software acquisition. Reflecting the increasingly important role that artificial intelligence ("AI") will play in the digital transformation of the agreement process, DocuSign announced its intent to acquire contracts AI and legal analytics pioneer Seal Software for $188 million in cash. This acquisition enables DocuSign to integrate Seal’s AI technology across the entire Agreement Cloud—and therefore deliver greater value to organizations looking to prepare, sign, act-on and manage the agreements that are critical to their business.

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•DocuSign Momentum. The company hosted its North American customer conference on March 4, 2020. Given the ongoing developments around the COVID-19 (coronavirus) situation, the company took the proactive step to hold the conference virtually. The company showcased AI-powered capabilities by Seal Software and DocuSign’s internal AI team, as well as other new capabilities for every stage of the agreement process.

•Executive appointments. DocuSign announced Rob Giglio as the company’s new chief marketing officer (CMO). Rob was previously with Adobe, where he helped architect the growth strategy for Adobe’s self-service cloud business and oversaw significant international expansion. As CMO, Rob will own all demand generation, self-service sales, digital, creative, and brand functions for DocuSign.

Outlook

The company currently expects the following guidance:

▪Quarter ending April 30, 2020 (in millions, except percentages):
Total revenue $280    to $284   
Subscription revenue $266    to $270   
Billings $279    to $289   
Non-GAAP gross margin 78%    to    80%   
Non-GAAP sales and marketing 47%    to 49%   
Non-GAAP research and development 13%    to 15%   
Non-GAAP general and administrative 9%    to 11%   
Non-GAAP interest and other income (expense) $2    to $3   
Provision for income taxes $1.5    to $2.5   
Non-GAAP diluted weighted-average shares outstanding 195    to 200   

▪Fiscal year ending January 31, 2021 (in millions, except percentages):
Total revenue $1,272    to $1,276   
Subscription revenue $1,210    to $1,214   
Billings $1,430    to $1,450   
Non-GAAP gross margin 78%    to    80%   
Non-GAAP sales and marketing 47%    to 49%   
Non-GAAP research and development 13%    to 15%   
Non-GAAP general and administrative 9%    to 11%   
Non-GAAP interest and other income (expense) $8    to $12   
Provision for income taxes $6    to $10   
Non-GAAP diluted weighted-average shares outstanding 195    to 200   

The company has not reconciled its expectations of non-GAAP financial measures to the corresponding GAAP measures because stock-based compensation expense cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.

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Webcast Conference Call Information

The company will host a conference call on March 12, 2020 at 1:30 p.m. PT (4:30 p.m. ET) to discuss its financial results. A live webcast of the event will be available on the DocuSign Investor Relations website at investor.docusign.com. A live dial-in will be available domestically at 877-407-0784 or internationally at 201-689-8560. A replay will be available domestically at 844-512-2921 or internationally at 412-317-6671 until midnight (ET) March 26, 2020, using the passcode 13699284.

About DocuSign

DocuSign helps organizations connect and automate how they prepare, sign, act on, and manage agreements. As part of the DocuSign Agreement Cloud, DocuSign offers eSignature, the world’s #1 way to sign electronically on practically any device, from almost anywhere, at any time. Today, more than half a million customers and hundreds of millions of users in over 180 countries use DocuSign to accelerate the process of doing business and to simplify people’s lives.

For more information, visit www.docusign.com, call +1-877-720-2040, or follow @DocuSign on Twitter, LinkedIn, Facebook and Instagram.

Copyright 2020. DocuSign, Inc. is the owner of DOCUSIGN® and all its other marks (www.docusign.com/IP).

Investor Relations:
Annie Leschin
VP Investor Relations
investors@docusign.com

Media Relations:
Adrian Wainwright
Head of Communications
media@docusign.com

Forward-Looking Statements

This press release contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, among other things, statements under “Outlook” above and any other statements about expected financial metrics, such as revenue, billings, non-GAAP gross margin, non-GAAP diluted weighted-average shares outstanding, and non-financial metrics, such as customer growth, as well as statements related to our expectations regarding the benefits of the DocuSign Agreement Cloud and enhancements to it, additions to the Agreement Cloud suite of products, and the anticipated benefits of the acquisition of Seal Software. They also include statements about our future operating results and financial position, our business strategy and plans, market growth and trends, and our objectives for future operations. These statements are subject to substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

These risks and uncertainties include, among other things, risks related to our ability to estimate the size of our total addressable market; our ability to effectively sustain and manage our growth and future expenses, achieve and maintain future profitability, attract new customers and maintain and expand our existing customer base; our ability to scale and update our platform to respond to customers' needs and rapid technological change; the effects of increased competition in our market and our ability to compete effectively; our ability to expand use cases within existing customers and vertical solutions; our ability to expand our operations and increase adoption of our platform internationally; our ability to strengthen and foster our relationship with developers; our ability to expand our direct sales force, customer success team and strategic partnerships around the world; our ability to identify targets for and execute potential acquisitions; our ability to successfully integrate the operations of businesses we may acquire, or to realize the anticipated benefits of such acquisitions; our ability to maintain, protect and enhance our brand; the sufficiency of our cash and cash equivalents to satisfy our liquidity needs; our failure or the failure of our software suite of services to comply with applicable industry standards, laws and regulations; our ability to maintain, protect and enhance our intellectual property; our ability to successfully defend litigation against us; our ability to attract large organizations as users; our ability to maintain our corporate culture; our ability to offer high-quality customer support; our ability to hire, retain and motivate qualified personnel; our ability to estimate the size and potential growth of our
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target market; our ability to maintain proper and effective internal controls. Additional risks and uncertainties that could affect our financial results are included in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our quarterly report on Form 10-Q for the quarter ended October 31, 2019 filed on December 6, 2019 with the Securities and Exchange Commission (the “SEC”), and other filings that we make from time to time with the SEC. In addition, any forward-looking statements contained in this press release are based on assumptions that we believe to be reasonable as of this date. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

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. These non-GAAP financial measures, which may be different than similarly-titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP measures to assist investors in seeing our financial performance using a management view, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP operating margin, non-GAAP net income (loss) and non-GAAP net income (loss) per share: 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 from our convertible senior notes issued in September 2018, and, as applicable, other special items. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). 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 flows: We define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment. We believe free cash flow is an important liquidity measure of the cash (if any) that is available, after purchases of property and equipment, for operational expenses, investment in our business, and to make acquisitions. Free cash flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash in excess of our capital investments in property and equipment. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.

Billings: We define billings as total revenues plus the change in our contract liabilities and refund liability less contract assets and unbilled accounts receivable in a given period. Billings reflects sales to new customers plus subscription renewals and additional sales to existing customers. Only amounts invoiced to a customer in a given period are included in billings. We believe billings is a key metric to measure our periodic performance. Given that most of our customers pay in annual installments one year in advance, but we typically recognize a majority of the related revenue ratably over time, we use billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers.

For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see “Reconciliation of GAAP to Non-GAAP Financial Measures” below.
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DOCUSIGN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended January 31, Year Ended January 31,
(in thousands, except per share data) 2020 2019 2020 2019
Revenue:
Subscription $ 258,122    $ 187,572    $ 918,463    $ 663,657   
Professional services and other 16,773    12,160    55,508    37,312   
Total revenue 274,895    199,732    973,971    700,969   
Cost of revenue:
Subscription 48,162    33,560    163,931    117,764   
Professional services and other 19,913    19,133    79,303    74,657   
Total cost of revenue 68,075    52,693    243,234    192,421   
Gross profit 206,820    147,039    730,737    508,548   
Operating expenses:
Sales and marketing 161,326    127,691    591,379    539,606   
Research and development 52,094    42,921    185,552    185,968   
General and administrative 35,753    39,055    147,315    209,297   
Total operating expenses 249,173    209,667    924,246    934,871   
Loss from operations (42,353)   (62,628)   (193,509)   (426,323)  
Interest expense (7,461)   (7,101)   (29,254)   (10,844)  
Interest income and other income, net 3,658    4,794    19,207    8,959   
Loss before provision for (benefit from) income taxes (46,156)   (64,935)   (203,556)   (428,208)  
Provision for (benefit from) income taxes 1,251    1,309    4,803    (1,750)  
Net loss $ (47,407)   $ (66,244)   $ (208,359)   $ (426,458)  
Net loss per share attributable to common stockholders, basic and diluted $ (0.26)   $ (0.40)   $ (1.18)   $ (3.16)  
Weighted-average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted 180,859    167,269    176,704    135,163   
Stock-based compensation expense included in costs and expenses:
Cost of revenue—subscription $ 3,951    $ 2,241    $ 12,882    $ 16,182   
Cost of revenue—professional services and other 3,826    3,413    15,703    25,858   
Sales and marketing 26,170    20,505    94,863    172,115   
Research and development 12,252    9,562    43,211    74,108   
General and administrative 9,406    13,550    39,745    122,715   

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DOCUSIGN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data) January 31, 2020 January 31, 2019
Assets
Current assets
Cash and cash equivalents $ 241,203    $ 517,811   
Investments—current 414,939    251,203   
Restricted cash 280    367   
Accounts receivable 237,841    174,548   
Contract assets—current 12,502    10,616   
Prepaid expenses and other current assets 37,125    29,976   
Total current assets 943,890    984,521   
Investments—noncurrent 239,729    164,220   
Property and equipment, net 128,293    75,832   
Operating lease right-of-use assets 149,833    —   
Goodwill 194,882    195,225   
Intangible assets, net 56,500    74,203   
Deferred contract acquisition costs—noncurrent 153,333    112,583   
Other assets—noncurrent 24,678    8,833   
Total assets $ 1,891,138    $ 1,615,417   
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $ 28,144    $ 19,590   
Accrued expenses and other current liabilities 54,344    35,658   
Accrued compensation 83,189    77,553   
Contract liabilities—current 507,560    381,060   
Operating lease liabilities—current 20,728    —   
Deferred rent—current —    2,452   
Total current liabilities 693,965    516,313   
Convertible senior notes, net 465,321    438,932   
Contract liabilities—noncurrent 11,478    7,712   
Operating lease liabilities—noncurrent 162,432    —   
Deferred rent—noncurrent —    24,195   
Deferred tax liability—noncurrent 4,920    4,207   
Other liabilities—noncurrent 6,695    9,696   
Total liabilities 1,344,811    1,001,055   
Stockholders’ equity
Common stock 18    17   
Additional paid-in capital 1,685,167    1,545,088   
Accumulated other comprehensive loss (1,673)   (1,965)  
Accumulated deficit (1,137,185)   (928,778)  
Total stockholders’ equity 546,327    614,362   
Total liabilities and stockholders’ equity $ 1,891,138    $ 1,615,417   

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DOCUSIGN, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended January 31, Year Ended January 31,
(in thousands) 2020 2019 2020 2019
Cash flows from operating activities:
Net loss $ (47,407)   $ (66,244)   $ (208,359)   $ (426,458)  
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization 13,266    12,003    50,182    38,027   
Amortization of deferred contract acquisition and fulfillment costs 20,387    12,223    69,747    42,112   
Amortization of debt discount and transaction costs 6,742    6,360    26,389    9,507   
Non-cash operating lease costs 5,592    —    19,435    —   
Stock-based compensation expense 55,605    49,271    206,404    410,978   
Deferred income taxes 1,245    2,346    1,287    (5,001)  
Other 401    2,879    (1,741)   800   
Changes in operating assets and liabilities
Accounts receivable (78,377)   (43,937)   (63,293)   (42,571)  
Contract assets 5,715    1,430    (1,508)   4,204   
Prepaid expenses and other current assets (1,106)   (900)   (3,142)   (3,283)  
Deferred contract acquisition and fulfillment costs (37,923)   (28,324)   (115,723)   (80,869)  
Other assets 612    656    1,538    2,658   
Accounts payable 1,543    (1,390)   3,849    (7,380)  
Accrued expenses and other liabilities 4,662    (1,122)   9,353    6,449   
Accrued compensation 12,329    23,868    5,636    26,039   
Contract liabilities 85,957    65,018    130,266    100,874   
Operating lease liabilities (3,738)   —    (14,624)   —   
Net cash provided by operating activities 45,505    34,137    115,696    76,086   
Cash flows from investing activities:
Purchases of marketable securities (107,318)   (415,132)   (861,252)   (415,132)  
Maturities of marketable securities 166,599    —    627,309    —   
Purchases of strategic investments —    —    (15,500)   —   
Cash paid for acquisition, net of acquired cash —    —    —    (218,779)  
Purchases of property and equipment (29,975)   (11,317)   (72,046)   (30,413)  
Net cash provided by (used in) investing activities 29,306    (426,449)   (321,489)   (664,324)  
Cash flows from financing activities:
Proceeds from issuance of convertible senior notes, net of initial purchasers' discounts and transaction costs —    —    —    560,756   
Purchase of capped calls related to issuance of convertible senior notes —    —    —    (67,563)  
Proceeds from issuance of common stock in initial public offering, net of underwriting commissions —    —    —    529,305   
Payment of tax withholding obligation on RSU settlement (41,216)   (215,332)   (166,504)   (215,332)  
Proceeds from exercise of stock options 9,914    34,846    72,177    50,211   
Proceeds from employee stock purchase plan —    —    23,872    —   
Payment of deferred offering costs —    (319)   —    (4,011)  
Other financing —    (250)   —    (250)  
Net cash provided by (used in) financing activities (31,302)   (181,055)   (70,455)   853,116   
Effect of foreign exchange on cash, cash equivalents and restricted cash (137)   (2,955)   (447)   (4,136)  
Net increase (decrease) in cash, cash equivalents and restricted cash 43,372    (576,322)   (276,695)   260,742   
Cash, cash equivalents and restricted cash at beginning of period 198,111    1,094,500    518,178    257,436   
Cash, cash equivalents and restricted cash at end of period $ 241,483    $ 518,178    $ 241,483    $ 518,178   

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DOCUSIGN, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)

Reconciliation of gross profit and gross margin:
Three Months Ended January 31, Year Ended January 31,
(in thousands) 2020 2019 2020 2019
GAAP gross profit $ 206,820    $ 147,039    $ 730,737    $ 508,548   
Add: Stock-based compensation 7,777    5,654    28,585    42,040   
Add: Amortization of acquisition-related intangibles 1,348    1,778    5,704    6,081   
Add: Employer payroll tax on employee stock transactions 668    1,949    2,577    1,949   
Add: Acquisition-related expenses —    —    —    108   
Non-GAAP gross profit $ 216,613    $ 156,420    $ 767,603    $ 558,726   
GAAP gross margin 75  % 74  % 75  % 73  %
Non-GAAP adjustments 4  % 4  % 4  % 7  %
Non-GAAP gross margin 79  % 78  % 79  % 80  %
GAAP subscription gross profit $ 209,960    $ 154,012    $ 754,532    $ 545,893   
Add: Stock-based compensation 3,951    2,241    12,882    16,182   
Add: Amortization of acquisition-related intangibles 1,348    1,778    5,704    6,081   
Add: Employer payroll tax on employee stock transactions 285    830    1,054    830   
Non-GAAP subscription gross profit $ 215,544    $ 158,861    $ 774,172    $ 568,986   
GAAP subscription gross margin 81  % 82  % 82  % 82  %
Non-GAAP adjustments 3  % 3  % 2  % 4  %
Non-GAAP subscription gross margin 84  % 85  % 84  % 86  %
GAAP professional services and other gross loss $ (3,140)   $ (6,973)   $ (23,795)   $ (37,345)  
Add: Stock-based compensation 3,826    3,413    15,703    25,858   
Add: Acquisition-related expenses —    —    —    108   
Add: Employer payroll tax on employee stock transactions 383    1,119    1,523    1,119   
Non-GAAP professional services and other gross profit (loss) $ 1,069    $ (2,441)   $ (6,569)   $ (10,260)  
GAAP professional services and other gross margin (19) % (57) % (43) % (100) %
Non-GAAP adjustments 25  % 37  % 31  % 73  %
Non-GAAP professional services and other gross margin 6  % (20) % (12) % (27) %

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Reconciliation of operating expenses:
Three Months Ended January 31, Year Ended January 31,
(in thousands) 2020 2019 2020 2019
GAAP sales and marketing $ 161,326    $ 127,691    $ 591,379    $ 539,606   
Less: Stock-based compensation (26,170)   (20,505)   (94,863)   (172,115)  
Less: Amortization of acquisition-related intangibles (2,911)   (3,234)   (12,013)   (7,021)  
Less: Employer payroll tax on employee stock transactions (1,413)   (8,051)   (7,023)   (8,051)  
Less: Acquisition-related expenses —    —    —    (68)  
Non-GAAP sales and marketing $ 130,832    $ 95,901    $ 477,480    $ 352,351   
GAAP sales and marketing as a percentage of revenue 59  % 64  % 61  % 77  %
Non-GAAP sales and marketing as a percentage of revenue 48  % 48  % 49  % 50  %
GAAP research and development $ 52,094    $ 42,921    $ 185,552    $ 185,968   
Less: Stock-based compensation (12,252)   (9,562)   (43,211)   (74,108)  
Less: Employer payroll tax on employee stock transactions (636)   (2,246)   (3,524)   (2,246)  
Less: Acquisition-related expenses —    —    —    (302)  
Non-GAAP research and development $ 39,206    $ 31,113    $ 138,817    $ 109,312   
GAAP research and development as a percentage of revenue 19  % 21  % 19  % 27  %
Non-GAAP research and development as a percentage of revenue 14  % 16  % 14  % 16  %
GAAP general and administrative $ 35,753    $ 39,055    $ 147,315    $ 209,297   
Less: Stock-based compensation (9,406)   (13,550)   (39,745)   (122,715)  
Less: Employer payroll tax on employee stock transactions (540)   (3,411)   (3,596)   (3,411)  
Less: Acquisition-related expenses —    —    —    (1,290)  
Non-GAAP general and administrative $ 25,807    $ 22,094    $ 103,974    $ 81,881   
GAAP general and administrative as a percentage of revenue 12  % 20  % 15  % 30  %
Non-GAAP general and administrative as a percentage of revenue 9  % 11  % 11  % 12  %

9

Reconciliation of income (loss) from operations and operating margin:
Three Months Ended January 31, Year Ended January 31,
(in thousands) 2020 2019 2020 2019
GAAP loss from operations $ (42,353)   $ (62,628)   $ (193,509)   $ (426,323)  
Add: Stock-based compensation 55,605    49,271    206,404    410,978   
Add: Amortization of acquisition-related intangibles 4,259    5,012    17,717    13,102   
Add: Employer payroll tax on employee stock transactions 3,257    15,657    16,720    15,657   
Add: Acquisition-related expenses —    —    —    1,768   
Non-GAAP income from operations $ 20,768    $ 7,312    $ 47,332    $ 15,182   
GAAP operating margin (15) % (31) % (20) % (61) %
Non-GAAP adjustments 23  % 35  % 25  % 63  %
Non-GAAP operating margin 8  % 4  % 5  % 2  %

Reconciliation of net income (loss) and net income (loss) per share, basic and diluted:
Three Months Ended January 31, Year Ended January 31,
(in thousands, except per share data) 2020 2019 2020 2019
GAAP net loss $ (47,407)   $ (66,244)   $ (208,359)   $ (426,458)  
Add: Stock-based compensation 55,605    49,271    206,404    410,978   
Add: Amortization of acquisition-related intangibles 4,259    5,012    17,717    13,102   
Add: Employer payroll tax on employee stock transactions 3,257    15,657    16,720    15,657   
Add: Acquisition-related expenses —    —    —    1,839   
Add: Amortization of debt discount and issuance costs 6,742    6,360    26,389    9,507   
Less: Tax effect of the SpringCM acquisition(1)
—    289    —    (7,080)  
Non-GAAP net income $ 22,456    $ 10,345    $ 58,871    $ 17,545   
Numerator:
Non-GAAP net income $ 22,456    $ 10,345    $ 58,871    $ 17,545   
Less: Preferred stock accretion —    —    —    (353)  
Less: Net income allocated to participating securities —    —    —    (2,636)  
Non-GAAP net income attributable to common stockholders $ 22,456    $ 10,345    $ 58,871    $ 14,556   
Denominator:
Weighted-average common shares outstanding, basic 180,859    167,269    176,704    135,163   
Effect of dilutive securities 12,869    20,390    14,094    23,513   
Non-GAAP weighted-average common shares outstanding, diluted 193,728    187,659    190,798    158,676   
GAAP net loss per share, basic and diluted $ (0.26)   $ (0.40)   $ (1.18)   $ (3.16)  
Non-GAAP net income per share, basic 0.12    0.06    0.33    0.11   
Non-GAAP net income per share, diluted 0.12    0.06    0.31    0.09   
(1)Represents a tax benefit related to the release of a portion of our deferred tax asset valuation allowance resulting from the SpringCM acquisition.

10

Computation of free cash flow:
Three Months Ended January 31, Year Ended January 31,
(in thousands) 2020 2019 2020 2019
Net cash provided by operating activities $ 45,505    $ 34,137    $ 115,696    $ 76,086   
Less: Purchases of property and equipment (29,975)   (11,317)   (72,046)   (30,413)  
Non-GAAP free cash flow 15,530    22,820    43,650    45,673   
Net cash provided by (used in) investing activities 29,306    (426,449)   (321,489)   (664,324)  
Net cash provided by (used in) financing activities $ (31,302)   $ (181,055)   $ (70,455)   $ 853,116   

Computation of billings:
Three Months Ended January 31, Year Ended January 31,
(in thousands) 2020 2019 2020 2019
Revenue $ 274,895    $ 199,732    $ 973,971    $ 700,969   
Add: Contract liabilities and refund liability, end of period 522,201    390,887    522,201    390,887   
Less: Contract liabilities and refund liability, beginning of period (435,898)   (330,060)   (390,887)   (282,943)  
Add: Contract assets and unbilled accounts receivable, beginning of period 20,805    15,229    13,436    16,899   
Less: Contract assets and unbilled accounts receivable, end of period (15,082)   (13,436)   (15,082)   (13,436)  
Less: Contract liabilities and refund liability contributed by the acquisition of SpringCM —    —    —    (11,002)  
Non-GAAP billings $ 366,921    $ 262,352    $ 1,103,639    $ 801,374   

11

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Exhibit 99.2
March 10, 2020

Daniel Springer

Re: Amendment to Offer Letter

Dear Dan: 
This letter amends your amended and restated offer letter (your “Offer Letter”) dated as of March 27, 2018 with DocuSign, Inc., a Delaware corporation (the “Company”), effective as of the date first set forth above (the “Effective Date”).
1.Amendment to Offer Letter. The section titled “Change in Control Benefits” in Attachment A to the Offer Letter is amended and restated in its entirety as follows, effective as of the Effective Date:
“Change in Control Benefits

In the event of a Change of Control, the vesting of each of your then-outstanding Company equity awards granted under any of the Company’s equity incentive plans (excluding any performance-vested awards) will accelerate as to fifty percent (50%) of any then-unvested shares subject to each such award as of immediately prior to the Change in Control, subject to your continued employment through the Change in Control. For clarity, any accelerated vesting that you become eligible to receive will apply to the latest vesting tranches first, so as to shorten the remaining vesting schedule.

In addition, in In the event the Company terminates your employment without Cause (other than as a result of your death or disability) or you resign for Good Reason (as defined below) during the Change in Control Period, provided such termination or resignation constitutes a Separation from Service, then subject to the Release Requirement and Return of Company Property Obligations, your continued compliance with the terms of this Agreement and your resignation from the Board, to be effective no later than your Separation from Service date (or such other date requested or permitted by the Board), the Company will provide you with the following severance benefits (the “Change in Control Severance Benefits”):

•The Cash Severance as provided above;

•The COBRA Severance as provided above, except that the maximum duration of any such COBRA Severance shall be twelve (12) months; and

•The vesting of each of your then-outstanding Company equity awards (excluding the PSUs any performance-vested awards) will accelerate in full. In order to accommodate this potential accelerated vesting, any
221 Main Street, Suite 1550, San Francisco, CA 94105


then-unvested Company equity awards will not terminate with respect to shares that have not vested as of your termination date until 3 months and one day after your termination date.

Notwithstanding anything to the contrary in the Plan or any equity award agreements, if unvested Company equity awards are not assumed by an acquirer in a Change in Control, your unvested equity awards (other than any performance-vested awards) shall accelerate in full prior to such Change in Control.”

2.No Other Changes. Except as specifically amended by Section 1 above, all terms and conditions of your Offer Letter shall remain in full force and effect.
3.Other Provisions. This letter agreement shall be construed and enforced in accordance with the laws of the State of California without regard to conflicts of law principles. Any ambiguity in this letter agreement shall not be construed against any party as the drafter. Any waiver of a breach of this letter agreement, or rights hereunder, shall be in writing and shall not be deemed to be a waiver of any successive breach or rights hereunder. This letter agreement may be executed in counterparts which shall be deemed to be part of one original.
To indicate your acceptance of this letter agreement, please sign and date this letter agreement in the space provided below.

Sincerely,

DocuSign, Inc.

By: /s/ Blake Irving   
Blake Irving
On behalf of the Board of Directors




ACCEPTED AND AGREED:

Daniel Springer

By: /s/ Daniel Springer    
Date: March 10, 2020

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