DocuSign CFO on Managing the Pandemic

This following the company's earnings and quarterly update. The company did give some guidance though that beat the average analyst estimate. Stock was definitely one of those names that we highlighted as one that really shot up during the pandemic as necessary document signings needed to be done digitally. I have to say I used the service during the pandemic. My co host Tim Stanovic did as well. Let's get more though about this past year, the quarter, and really look

ahead at our post pandemic world. Cynthia Gaylor is with us. She is chief financial officer at docu Signed, joining us on the phone in San Francisco. Cynthia, nice to have you here on Bloomberg welcome. How are you good? Good, Thanks Carol, thanks for having us. Well. Before we get into your business in the quarter, tell me though about this past year, how you guys are doing your team, what it's been like, and how does it compete compare

kind of here we are twelve months later, Yeah for sure. So, I mean COVID has you know, just created huge challenges for everyone and disruptions UM everywhere. But amid those challenges, we found ways to really help our customers and and really have felt honored to play a critical role in helping people move forward UM all over the world. And that's kind of showed up somewhat in our business performance.

But just how folks are using our product well, and this you know, I think I've seen it in some of the documents you guys shared with us, And I mean, this was a milestone year for you, a game changer, safe to say, Yeah, for sure. We crossed the billion dollar in revenue mark earlier in the year, right before the pandemic hit, and um we're well on our way to a billion and a half and kind of growing to two billion over the course of this year. So talk to us about some of the things that we

saw in this most recent quarter. Um, you know, we're looking at quarterly revenue up fifty seven percent year over year. We're looking at billings and increase of forty six percent year over year. I mean, listen, these are off the chart numbers. What does a post COVID document sign world look like? It's it's really interesting and it's a great question. I mean, we think we're well positioned across all the

secular trends that you're seeing. If you think about and Dan talked about this a little bit on the call, you know, we're well positioned for the anywhere economy if you think about just accelerating digital workflows and kind of digital first being a priority for so many people and and so many companies. Um, you know, docum signs fits right in in kind of a major pillar across anywhere economy where people are looking to do anything from anywhere. Well,

and that's kind of interesting. I meant to that. You know, we used it for something at home, and my co host did as well. Uh, it is interesting that there are trends out there, whether it was in detail retail e commerce specifically, there are things that many would say we're not going back on telemedicine. And I do wonder if the world is ready based on what you're seeing, the people that you're talking to, your customers that you're you know, talking to that this is just one of

those things that it just makes sense. We're not going to go back. Yeah, for sure. I think the you know, the acceleration in our demand and the surgeon adoption over the course of the year was really accelerated by covid and kind of an urgent need. But once people are working with our products on the platform and you can see that you can do things um faster, cheaper, smarter, more secure, you're not going to go back to pen and paper and the way you were doing things before.

And it's interesting because with our notary product coming out, you know, nobody would like to go to the notary and get things notarized pre pandemic um and to be able to do that online, we don't think people will will go back to pen and paper in that way. Well, And I do wonder too specifically, you know, what do you say to folks that say, listen, you're just a pandemic play Uh, it's a stay at home stock. You know,

we talk about them all the time. On air and say that once we reopen, that's not going to be the case. I know you're talking about, you know, kind of making the case here, But what do you say to people who say that to you, it's just not what we're seeing in the business UM. You know, the strength that we've seen in the business UM is continuing and we're seeing quite a bit of tail winds coming into this year coming off of last year. But also again,

once you use the products, they're easy to use. You look at our customer NPS scores, a lot of our customers say their customers love them because they use DocuSign, right, because it is just it's so much easier to do digitally and and kind of when you think about the digital digital transformation that so many UM companies are going through across industries, DocuSign is really a foundational building block of how to do agreements and do digital workflow UM online.

All right, So let's talk numbers. So UM, from what I understand is you've got you know, about ND customers, more than a billion users right now, we're looking at revenue projected of maybe just under two billion for fiscal year, and I just wonder, give me an idea of the numbers. How many more customers can you do you anticipate in

the next year or two years, how many more users? Yeah? So, I mean we've seen tremendous growth in our customer base and and data point for you as we added almost as many customers this past year as we had at the time we went public, And when we went public, the company was fifteen years old already, So we added

a tremendous number of customers. And I think that's really a testament to just how people U use the product, but also uh, covid accelerating things people would have done anyway, Um, they just did it faster, and so we we expect that to continue. We don't necessary really forecast out the number of customers per se, but if you think about it, uh, you know, we're ending the year with just over eight

and ninety thousand customers, so almost a million customers. When you think about how many companies are in the US alone, it's over twenty seven million. So the opportunity we're just really scratching the surface of. Um, we have a fifty billion dollar market opportunity where the largest player by far in our in our space across the signature and the agreement cloud, and we just start kind of capsulating a year that's almost what a billion a billion and a

half of revenue. So we just have a lot of a lot of runway, and particularly because a lot of that market is kind of offline to online, we believe we can continue to add customers at a good clip here going forward. What do you say, though, Cynthia too. You know, I'm thinking listeners in our audience are those who are watching us on YouTube and and the Bloomberg investor that's out there, the Bloomberg audience. You know, your stock was up last year, it was up the year before.

Are we're looking at uh, your stock trading at more than a hundred and fifty five times estimated earnings per share for the coming year. Um, do you feel like you need to manage expectations a little bit because of the dramatic growth you've seen in the last year. Yeah. So, I mean, we have seen tremendous growth, and as I said, we're we're kind of just scratching the surface of the opportunity ahead abo us and we're also you know, guiding

to significant growth at scale. And I think when you think about fifty percent growth in the overall business over the course of the year. You know, our strong guide going into fiscal UM twenty two implies um thirty five percent revenue growth kind of mity percent revenue growth at scale, that's pretty tremendous growth. There's not that many staff software companies that are growing at those rates um at this

type of scale. And and because the market opportunity is so big, and we're competing against pen and paper manual process to a more automated process, it feels like we have lots of runway, and we really think long term about the business and how do we execute against the long term opportunity relative to kind of the you know, the day to day trading environment, how do you view competition Dropbox um, you know, acquiring the documents sharing platform doc send, So how do you look at you know,

what's going on more broadly in the space. How does something like that that link up affect you? Sure, yeah, there, I mean there's been some consolidation of some of the smaller players in this space. But give you a sense, we spend more in R and D on the signature than our next nearest competitor has in revenue. So we have um you know market share that that's multiples of

UM what others have. And so a lot of the companies that you mentioned they are they're actually partners of ours and and UM different companies made by a scribble signer UM to kind of add to their product portfolio.

But when you think about docum sign and the comprehensive nature of our application of our API and integrations, how we're integrated into workflows across the ecosystem, if you think about where we fit with customers that we serve, serve the smallest mom and top UM customers to the largest enterprises, and so the scalability, the security, UM, the workflow pieces of the agreement cloud that we serve. And we're a trusted brand, right we UM you know, have very high

MPs scores. We have kind of the security and all the privacy features that a lot of these other companies don't have. So we partner across the ecosystem UM and we're not as concerned about, you know, different companies buying a very small player and integrating that into their products because it's not necessarily competitive with what we're doing and

the broad the broad market that we're serving. I'll take that as you're not worried then, because okay, hey listen, you meant you took me somewhere where I want to go. Security issues and privacy issues. Um. You know, Bloomberg had an exclusive story about, um, the hackavist hack activists who basically tapped into, you know, tons of surveillance cameras around

the globe just to show how easy it is. What about that when we're throwing up really important documents in the cloud and elsewhere, Um, how do you ensure you know the security of all of that, because that's going to be a big thing that you know, people are gonna think twice if there's any kind of problems of course, and that's an area that we're investing a lot in across our platform and in our infrastructure, and so it's a really top of mind area, particularly for enterprises, but

also kind of in the long tail of all the customers that we serve. So we invest a lot in R and D, insecurity, in kind of all the compliance pieces required to operate out our scale. All right, and we are talking, of course, with the CFO of Docum, sign Cynthia Galor. Hey, Cynthia, one thing I want to ask you. You mentioned growth, and we just have about a minute or so left here. UM in terms of

growth US versus overseas, where are the real opportunities going forward? Absolutely? So, I mean international is growing tremendously for US, it's about of our revenue. And in Q four three UM which is it was just quite substantial. It's um it's approaching a three hundred million dollar run rate um UH in terms of revenue for US UM. And we have a really unique go to market with our digital which really

feeds and creates legion into our direct business. But we're in a hundred and eighty countries globally and then we go direct in our core eight countries, and so we're in the beginning days of our international strategy and in many ways we're even less penetrated internationally than we are in North America. Hey, listen, I'd like to ask people, just real quickly, twenty seconds sconds, what keeps you up

at night? You know? We have just a tremendous opportunity ahead of us, and so we really need to keep our eye on the ball and focus on executing a cross our priorities and continuing to scale our business. And so for US, it's really about execution because the market opportunity is there, alright. Gonna leave it on that note, Listen, thank you so much, really appreciate all the time you gave us. Synthony Cynthia Galor. She is chief financial officer at DOC you sign joining us on the phone from

San Francisco. Stalks down about five so far in twenty one. As I mentioned a little bit of pressure we saw certainly following their earnings. This stock today closing down six point six percent, but again it's been on quite a tear in the last couple of years. You're listening to Bloomberg Business Week. I'm Carol Masser in our Interactor Broker studio.