DocuSign, Inc. (NASDAQ:DOCU) Q3 2019 Earnings Conference Call Transcript

Dec 06, 2018 • 04:30 pm ET


DocuSign, Inc. (NASDAQ:DOCU) Q3 2019 Earnings Conference Call Transcript


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Good afternoon, ladies and gentlemen. Thank you for joining DocuSign's Third Quarter Fiscal 2019 Earnings Conference Call. 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. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions)

I will now pass the call over to Anne Leschin, Head of IR. Please go ahead.

Annie Leschin

Thank you, operator. Good afternoon everyone. Welcome to DocuSign's third quarter fiscal 2019 earnings conference call. On the call today, we have DocuSign's CEO, Dan Springer; and CFO, Mike Sheridan. The press release announcing our third quarter results was issued earlier today and is posted on the Investor Relations website.

Before we get started, I'd like to let everyone know that we'll be hosting a KeyBanc bus tour on December 10th and be BofA bus tour on January 7th both in San Francisco and presenting at the JMP Tech Conference and the Morgan Stanley TMT Conference in late February. As other events are added to the schedule we will provide further updates.

(Forward-Looking Cautionary Statements)

I'd now like to turn the call over to Dan, Dan?

Dan Springer

Thanks, Annie. Good afternoon everyone and thanks for joining us today for our earnings call. I'm pleased to say Q3 was another strong quarter for DocuSign. We had strong execution across all segments, geographies and verticals and the factors that drive our growth engine were in full effect. I'll be talking today about each of those.

To start, let me share a quick review of the numbers, then Mike will give you more detail shortly. We had revenues of $178 million in the third quarter, which drove 37% year-over-year growth. With our acquisition of SpringCM, we were non-GAAP breakeven for the quarter. Our growth continues to come primarily from acquiring new customers and growing usage within our existing customers across their lines of business. At the end of Q3, we had 454,000 paying customers, an increase of 25,000 over the previous quarter. As we have said, this growth is not limited to the US. Our international business represented 17% of our overall revenue this quarter and it continues to be an area of significant focus for us.

We've continued to make great progress since becoming a public company earlier this year. And when we look at the factors driving our growth, we see a lot of fuel for further momentum. On today's call, I'd like to provide some additional color on these growth drivers. I'll talk about three in particular. First, every organization on the planet signs agreement, big businesses, small businesses, government agencies and not for profit. As a result, our TAM is substantial. We estimate our core eSignature business' TAM at $25 billion, which is largely under-penetrated. This TAM is becoming available as organizations worldwide make the transformation from paper to eSignature. It usually starts when a specific department in an organization adopts eSignature. Later,