DocuSign Inc (DOCU) Reports Solid Fiscal Year 2024 with Strong Free Cash Flow Growth
Total Revenue: $2.8 billion, a 10% increase over the prior year.
Subscription Revenue: $2.7 billion, up 10% from the previous year.
GAAP Net Income Per Share: $0.36, compared to a loss of $0.49 in fiscal 2023.
Non-GAAP Net Income Per Diluted Share: $2.98, up from $2.03 in fiscal 2023.
Free Cash Flow: $248.6 million for Q4, more than doubling from $113.0 million in the same period last year.
Billings: $833.1 million in Q4, a 13% increase year-over-year.
Customer Growth: Over 1.5 million customers, with ongoing product innovation.
On March 7, 2024, DocuSign Inc (NASDAQ:DOCU) released its 8-K filing, detailing its financial results for the fourth quarter and the fiscal year ended January 31, 2024. The company, known for its leading e-signature product and comprehensive Agreement Cloud suite, has reported a year of financial growth and strong cash flow performance.
Company Overview
Founded in 2003 and having gone public in May 2018, DocuSign offers a cloud-based software suite that automates the agreement process, allowing users to provide legally binding e-signatures from virtually any device. The company's innovative solutions have attracted over 1.5 million customers worldwide, positioning it as a leader in the digital agreement industry.
Fiscal Year 2024 Performance
DocuSign Inc (NASDAQ:DOCU) ended fiscal 2024 on a high note, with total revenue reaching $2.8 billion, marking a 10% increase from the previous year. Subscription revenue, which constitutes the bulk of the company's earnings, also saw a 10% increase to $2.7 billion. Professional services and other revenue grew by 2% year-over-year to $75.2 million.
One of the most notable achievements for the fiscal year was the significant improvement in free cash flow, which more than doubled to $248.6 million in Q4 compared to $113.0 million in the same period last year. This strong cash flow performance underscores the company's operational efficiency and its ability to generate cash from its business operations.
Billings, a key metric that reflects sales to new and existing customers, increased by 13% to $833.1 million in the fourth quarter, indicating healthy demand for DocuSign's offerings. The company also reported a GAAP net income per basic share of $0.36, a substantial improvement from a loss of $0.49 per share in fiscal 2023. Non-GAAP net income per diluted share was $2.98, up from $2.03 in the previous fiscal year, reflecting the company's strong profitability on an adjusted basis.
Financial Statements Summary
DocuSign Inc (NASDAQ:DOCU)'s balance sheet shows a solid financial position, with cash, cash equivalents, restricted cash, and investments totaling $1.2 billion at the end of the quarter. The company also successfully repaid $689.9 million principal amount of its 2024 convertible senior notes during the quarter, demonstrating prudent financial management.
The income statement reveals that the GAAP gross margin remained stable at 79% for both fiscal years, while the non-GAAP gross margin improved slightly to 83% from 82% in the prior year. Operating expenses were well managed, with total operating expenses for the fiscal year amounting to $2.157 billion, compared to $2.067 billion in fiscal 2023.
The cash flow statement highlights the company's operational efficiency, with net cash provided by operating activities reaching $979.5 million for the fiscal year, compared to $506.8 million in the previous year. This increase in operational cash flow contributed to the company's strong free cash flow figures.
Looking Ahead
CEO Allan Thygesen expressed confidence in the company's trajectory, stating, "DocuSign ended Fiscal 2024 with momentum in product innovation, customer growth, and financial performance, including more than doubling free cash flow year-over-year." He emphasized the massive opportunity in agreement management and the company's commitment to delivering category-defining innovation.
For the upcoming fiscal year ending January 31, 2025, DocuSign Inc (NASDAQ:DOCU) has provided guidance anticipating total revenue between $2,915 million to $2,927 million, with subscription revenue projected to be in the range of $2,843 million to $2,855 million. Billings are expected to be between $2,970 million to $3,024 million, with non-GAAP gross margin and operating margin estimated to be in the range of 81.0% to 82.0% and 26.5% to 28.0%, respectively.
DocuSign's solid financial performance, particularly the doubling of free cash flow and the steady increase in revenue and billings, positions the company well for continued growth and innovation in the digital agreement space. Investors and stakeholders can look forward to the company's sustained momentum as it navigates the massive agreement management market.
Explore the complete 8-K earnings release (here) from DocuSign Inc for further details.
This article first appeared on GuruFocus.
