DocuSign, Inc. (NASDAQ:DOCU) Q1 2020 Earnings Conference Call Transcript
Jun 06, 2019 • 04:30 pm ET
Great, thank you. At this time, we'll be conducting a question-and-answer session. (Operator Instructions) Our first question here is from Sterling Auty from JPMorgan. Please go ahead.
Yeah, thanks. Hi guys. I wanted to dive into the comment about elongated sales cycles on the upsell opportunity. Can you give us a little bit more color. What is it specifically that's causing, is it a decision process on the customer? What can you do to possibly shorten it again, and how is that actually also impacting subscription revenue?
Sure. Sterling, I think, what happens is, we are a single product company and we're moving to a broader platform and a multi-product company. And so when we have the opportunity, which we're excited about to sell people a broader suite. There are more people that are involved. I can give you a specific example, the large bank customer in Europe. And normally we would have had a more straightforward e-signature only. They were interested in also looking at some of the CLM capabilities of Spring. And as we got to the sort of end of the quarter, we realized our normal sort of pacing and process would take longer and for deal to close 10 days after the end of the quarter. But going into the quarter, we would have expected in a traditional eSignature sales cycle, a single product fewer signatures required et cetera. That will be faster. So that's kind of what we tend to see.
In terms of your question of making that go faster, I mean, I actually want to have more and more of our deals have the multi-product capability. I do think there's an opportunity for us to continually improve on the enablement we do of our sales force. And remember, this is still new for a lot of folks, move from a single product to the multi-product model, but enable them to, one, be able to forecast better but also to be able to accelerate that process. And from a standpoint in terms of the revenue growth, Mike, you want to chat a little bit about that.
Yeah, Sterling, in terms of subscription revenue, these product sets are pretty much all subscription products. So the timing of the -- of the ultimate booking or billing will impact the starting point of the revenue, but in terms of mix and everything else that you have modeled it doesn't really have any impact.
Okay, great. And then one follow-up question. The services revenue. I know it's small in terms of overall. But second straight quarter that it's up nicely relative to expectations. What's driving the upside and services?
One of the pieces is, if you think about the new products that we're selling, they generally require statement of work for implementation, because again the CLM capability. That software is fantastic, but it's not honed and as easy to use and implement as a DocuSign eSignature capability which requires a lot less. So we do expect there will be