DocuSign, Inc. (NASDAQ:DOCU) Q1 2020 Earnings Conference Call Transcript

Jun 06, 2019 • 04:30 pm ET

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DocuSign, Inc. (NASDAQ:DOCU) Q1 2020 Earnings Conference Call Transcript

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Presentation
Executive
Michael Sheridan

a 3% operating margin in Q1 of Fiscal '19. We ended Q1 with 3,219 employees a year-over-year increase of 36%.

Turning to cash flow, we had a particularly strong collections in the quarter and as a result, we generated $46 million in operating cash flow, compared with $15 million in Q1 of last year and free cash flow of $30 million compared to $9 million in the prior year. We had forecasted some of these collections in Q1 to occur in Q2. So we expect our Q2 collections to be lower than our historical averages. Overall, we believe our cash flow is a strong indicator of the improving leverage in our business.

Turning to our guidance for the second quarter and full year fiscal '20. We estimate number one, that revenue will reach $218 million to $222 million in Q2 and $917 million to $922 million for fiscal '20. And number two, billings will range between $215 million to $225 million in Q2, and $1,010 million to $1,030 million for fiscal '20. We expect gross margin to be 78% to 80% for Q2 and the fiscal year.

For operating expenses, we expect sales and marketing in the range of 48% to 58% -- sorry, 48% to 50% of revenues in Q2 and fiscal '20.

R&D in the range of 15% to 17% for Q2 and fiscal '20. And G&A in the range of 10% to 14% for Q2 and 10% to 13% for fiscal '20. This broader range of guidance for G&A expenses anticipate up to $10 million of expenses related to the RPost litigation that Dan mentioned in his remarks. For the second quarter, we expect $3 million to $4 million of interest and other non-operating income including interest income and expense associated with the convertible debt. And for fiscal '20, we expect interest and non-operating income of $12 million to $16 million.

We expect the tax provision of approximately $2 million to $2.2 million for the second quarter and $8 million to $10 million for fiscal '20. We expect fully diluted weighted average shares outstanding of 185 million to 190 million shares for Q2 and 190 million to 195 million shares for fiscal '20.

In closing, I am pleased with our start to fiscal '20, in particular as it relates to early momentum and customer interest in our expanded product offerings. We believe that we are entering Q2 with growing momentum in our global markets.

Thanks again for joining us today, and we can now go to Q&A.