What changed in this filing

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Item 1. Business

2021-03-31 compared with 2020-03-27 · 106 added, 43 removed, 266 unchanged (36% of the section changed)

14 unchanged sentences

DocuSign eSignature allows an agreement to be signed electronically on a wide variety of devices, from virtually anywhere in the world, securely.

The Agreement Cloud also includes several other applications for automating pre- and post-signature processes—for example, automatically generating an agreement from data in other systems, supporting negotiation workflow, collecting payment after signatures, and using artificial intelligence ("AI") to analyze a collection of agreements for risks and opportunities.

The Agreement Cloud also includes several other applications for automating pre- and post-signature processes—for example, automatically generating an agreement from data in other systems, supporting negotiation workflow, collecting payment after signatures, and using artificial intelligence (“A”I) to analyze a collection of agreements for risks and opportunities.

Finally, the Agreement Cloud includes hundreds of integrations to other systems, so agreement processes can integrate with larger business processes and data.

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The Agreement Cloud is an umbrella for:

DocuSign, Inc.| 2021 Form 10-K | 5

• A suite of applications that span the entire agreement process.

These applications and add-ons are detailed below under “Our Products.”

• Hundreds of integrations with other systems where work gets done , such as applications by offered by Google, Microsoft, Oracle, Salesforce, SAP, and Workday.

For example, because of an integration that embeds DocuSign functionality into the Salesforce user experience, a sales representative can generate and execute an agreement via DocuSign without ever leaving the Salesforce application.

• Hundreds of integrations with other systems where work gets done , such as applications offered by Google, Microsoft, Oracle, Salesforce, SAP, and Workday.

For example, because of an integration that embeds DocuSign functionality into the Salesforce user experience, a sales representative can generate, send, and track an agreement via DocuSign services without ever leaving the Salesforce application.

Behind the scenes, account data from Salesforce can automatically pre-fill the agreement.

After signature, DocuSign can pass any other data collected or generated in the agreement process back to Salesforce.

After signature, DocuSign services can pass any other data collected or generated in the agreement process back to Salesforce.

• Platform technologies such as APIs (application programming interfaces) and common infrastructure, detailed below in “Our Technology, Infrastructure and Operations.”

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• Highly auditable .

With DocuSign eSignature, every signed document is backed by a unique, auditable Certificate of Completion, automatically capturing key signing details—party names, email addresses, public IP addresses and a time-stamped record of individual interactions—to help authenticate the document.

With DocuSign eSignature, every signed document is backed by a unique, auditable Certificate of Completion, automatically capturing key signing details to help authenticate the document.

It includes party names, email addresses, public IP addresses, and a time-stamped record of individuals’ interactions with the document.

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Food and Drug Administration regulations.

In other cases, it may be a distinct product for an industry, such as Rooms for Real Estate, which includes tasks management, templates, and workflow for real estate transactions.

In other cases, it may be a distinct product for an industry, such as Rooms for Real Estate, which includes task management, templates, and workflow for real estate transactions.

• Simple to use .

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Our extensive APIs enable DocuSign products to be quickly embedded into or connected with an organization’s own apps, systems and processes.

In the case of DocuSign eSignature, this has led to nearly 60% of transactions being driven through our API today.

In the case of DocuSign eSignature, this has led to the majority of transactions being driven through our API today.

By integrating with the other systems our customers use to do business—as opposed to simply being a standalone app—we promote greater usage and engagement with our products.

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As a result, we believe DocuSign drives the kind of experience and satisfaction that leads people to say they cannot imagine doing business any other way.

DocuSign, Inc.| 2021 Form 10-K | 6

• Reduced cost of doing business .

We believe that when manual processes are digitally transformed, the cost of doing business goes down.

When organizations replace paper-based processes with DocuSign eSignature, for example, organizations see significant cost savings per agreement in labor and materials (paper, printer/ copier consumables,

envelopes, and postage).

Our other Agreement Cloud products help reduce legal costs in finding and reviewing documents, reduce customer-support costs by automatically guiding customers through complex agreement forms, and focus sales representatives’ time on selling rather than paperwork by automating agreement generation.

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As a result, there is a vast opportunity to take DocuSign eSignature to many more enterprises, commercial businesses, and VSBs around the world.

We estimate that our total customer base of over 585,000 customers represents 1% of the estimated enterprises, commercial businesses, and VSBs in our current core target market worldwide.

• Expand DocuSign eSignature use cases within existing customers .

A company’s first exposure to DocuSign is often when DocuSign eSignature is used to accelerate the execution of sales agreements.

Once a company begins to realize the benefits, we often have an opportunity to expand into other use cases-going beyond sales into services, human resources, finance, and other functions-thereby increasing the overall number of agreement processes that are automated.

For example, one large customer has grown from a single initial use case to over 300.

As the vast majority of our customers have only automated a few use cases thus far, we believe there is strong potential to expand within our existing base.

A company’s first exposure to the DocuSign Agreement Cloud is often when DocuSign eSignature is used to accelerate the execution of sales agreements.

Once a company begins to realize the benefits, we often have an opportunity to expand into other use cases—for example, going from sales into services, human resources, finance, and other functions—thereby increasing the overall number of agreement processes that are automated.

Our largest and most advanced customers have hundreds of use cases deployed, but the vast majority of our customers have only deployed a few use cases.

Thus, we believe there is strong potential to expand within our existing base.

We will pursue this by augmenting our dedicated customer success team to identify and drive adoption of new use cases.

• Extend customer relationships to other Agreement Cloud products .

We believe DocuSign eSignature is the natural onramp for customers into other Agreement Cloud offerings.

We believe DocuSign eSignature is the natural on-ramp for customers into other Agreement Cloud offerings.

Different customers will have their own paths for which products to buy next, and an increasing percentage of new customers are buying multiple Agreement Cloud products at the outset.

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We believe there is a substantial opportunity for us to increase our international customer base by leveraging and expanding investments in our technology, direct sales force and strategic partnerships around the world, as well as helping existing U.S.-based customers manage agreements across their international businesses.

We expect our eIDAS-compliant Standards-Based Signature currently offered in the EU and eHanko functionality for Japan to help support our international growth.

We expect offerings such as eIDAS-compliant Standards-Based Signature for the EU and eHanko functionality for Japan will help support our international growth.

• Continue augmenting our Agreement Cloud offerings .

In 2019, we released several new products covering different aspects of the agreement process.

We expect to continue investing in research and development to enhance those and other existing products, as well as to develop new products to further augment the Agreement Cloud.

In addition to eSignature, the Agreement Cloud has several products that cover different aspects of the agreement process.

We expect to continue investing in research and development to enhance those products, as well as to develop new products that further augment the Agreement Cloud.

In addition, we expect to continue to use partnerships to offer new integrations and, in some cases, products for resale.

Finally, we may acquire additional capabilities, such as our acquisition of SpringCM in 2018 and our pending acquisition of Seal Software announced in February 2020.

Finally, we may acquire additional capabilities, such as the technology assets brought through our acquisitions of SpringCM (September 4, 2018), Seal Software (May 1, 2020) and Liveoak Technologies (July 6, 2020).

• Expand vertical solutions .

While our overall value proposition is universal, we will continue to invest in sales, marketing and technical expertise across several industry verticals, each of which have differentiated business requirements.

We also intend to continue enhancing solutions tailored for important verticals, such as real estate, mortgage, and government.

We also intend to continue enhancing solutions tailored for important verticals, such as real estate, mortgage, life sciences, and government.

• Strengthen and foster our developer community .

With over 130,000 developer sandboxes created, which enable product development and testing in isolated environments, and over 60% of transactions on our eSignature platform processed via our APIs today, we believe we have a strong developer community.

With over 200,000 developer sandboxes created, which enable product development and testing in isolated environments, and the majority of transactions on our eSignature platform processed via our APIs today, we believe we have a strong developer community.

Our easy-to-use and robust APIs allow developers to extend and integrate DocuSign products into their own applications.

These developers help expand DocuSign functionality to other systems, thus driving greater usage of our offerings.

We intend to continue investing in our APIs and other forms of support to further drive this virtuous cycle of value creation between developers and DocuSign.

We intend to continue investing in our APIs and other forms of support to further drive this virtuous cycle of value creation between developers and the DocuSign Agreement Cloud.

DocuSign, Inc.| 2021 Form 10-K | 7

The Agreement Cloud includes a set of products that address different aspects of the agreement process, in some cases for particular market segments or industries.

Thus, the purpose is to assemble the right mix of Agreement Cloud products to address the specific needs of individual customers.

We therefore focus on assembling the right mix of Agreement Cloud products to address the specific needs of individual customers.

For example, a biotech startup in San Francisco will have a different set of Agreement Cloud products than a multinational European consumer-packaged-goods company.

Key Agreement Cloud products include:

• DocuSign eSignature, our anchor product.

• eSignature, our anchor product.

DocuSign eSignature enables sending and signing of agreements on a wide variety of devices, from virtually anywhere in the world, securely.

We offer multiple editions and add-ons that can be combined to fit the needs of different organizational sizes, industries, and regions.

• DocuSign CLM (Contract Lifecycle Management) automates workflows across the entire agreement process.

• CLM (Contract Lifecycle Management) automates workflows across the entire agreement process.

It provides larger organizations the flexibility to model complex processes for generating, negotiating, acting on, and storing agreements.

• Intelligent Insights uses artificial intelligence to search and analyze agreements by legal concepts and clauses.

• Insight uses artificial intelligence to search and analyze agreements by legal concepts and clauses.

It can work across a large volume of agreements, both from DocuSign eSignature and from other sources.

• Analyzer helps customers understand what they’re signing before they sign it.

An add-on to Insight, Analyzer uses artificial intelligence to analyze inbound agreements.

It can detect the presence or absence of clauses by their type, score their risk, and extract key terms.

• CLM+ combines the three preceding products—CLM, Insight, and Analyzer—to provide AI-driven contract lifecycle management.

The integration among the three products allows, for example, a contract to automatically be routed for review based on its risk score.

• Gen for Salesforce allows sales representatives to automatically generate polished, customizable agreements with a few clicks from within Salesforce, and is optimized for small to mid-sized businesses who value a simplified solution that is easy to install and maintain.

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With Payments, customers can accept credit cards, debit cards, ACH payments, Apple Pay and Google Pay.

• eNotary offers the ability to execute electronic notarial acts which simulate a traditional paper, in-person notarial act.

We offer our eNotary solution for electronic documents and records in states where eNotary has shown increasing prevalence, including California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Texas, Utah, Washington and West Virginia.

• eNotary offers the ability to execute in-person notarial acts electronically.

As of March 2021, we offer eNotary for electronic documents and records in more than 20 states.

Our industry-specific Agreement Cloud offerings include:

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Food and Drug Administration’s 21 CFR Part 11 regulations.

DocuSign, Inc.| 2021 Form 10-K | 8

Different pricing structures apply to different Agreement Cloud products.

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Similar to how physical agreements were mailed for signature in paper envelopes historically, we refer to an Envelope as a digital container used to send one or more documents for signature or approval to one or more recipients.

Our customers have the flexibility to

put a large number of documents in an Envelope.

Our customers have the flexibility to put a large number of documents in an Envelope.

For a number of use cases, such as buying a home, multiple Envelopes could be used.

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• Global security and privacy management .

DocuSign’s foundation is built on industry-standard algorithms and patented cryptographic protocols.

DocuSign’s foundational platform is built on industry-standard algorithms and patented and patent-pending security features and technologies in our product.

Distributed transactions are digitally signed and hash-validated for consistency.

Our service protocols and operations meet or exceed some of the most stringent U.S., EU and global security standards.

DocuSign is ISO27001 and SSAE 18, SOC 1 Type 2, SOC 2 Type 2, PCI, BCR and FedRAMP Certified.

DocuSign’s platform meets ISO27001, SSAE 18, SOC 1 Type 2, SOC 2 Type 2 and PCI certifications.

In addition, DocuSign’s eSignature and CLM products are FedRAMP-authorized.

• High availability and enterprise-class manageability .

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At the heart of our solution is a robust, proprietary digital transaction processing platform.

It operates at global scale, dynamically routing, rendering, versioning and storing more than 1.5 million documents per day in the year ended January 31, 2020.

It operates at global scale, dynamically routing, rendering, versioning and storing millions of documents per day in the year ended January 31, 2021.

That platform is designed to convert even the most complicated documents from different formats into one encrypted and consistent form.

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Companies can incorporate eSignature into the fabric of their business systems and processes by using one of more than 350 pre-built connectors, or via a custom integration using our API.

For a custom integration, the DocuSign Developer Center offers mobile or web app developers with software development kits and technical documentation for our comprehensive representational state transfer API-helping them to integrate signing or sending experiences into their own applications.

For a custom integration, the DocuSign Developer Center offers mobile or web app developers software development kits and technical documentation for our comprehensive API, helping them to integrate signing or sending experiences into their own applications.

They can also use DocuSign Connect—a real-time transactional event delivery service—to initiate specific actions when Envelopes originate, a workflow advances, or signing completes.

DocuSign, Inc.| 2021 Form 10-K | 9

Research and Development

Since inception, we have invested to build the world’s leading electronic signature solution and Agreement Cloud.

Our product and engineering team is responsible for the design, development, testing and certification of our solutions.

Our product and engineering team is responsible for the design, development, testing and certification of our products.

Our Customers

As of January 31, 2021, we had more than 890,000 paying customers globally, serving the needs of some of the largest enterprises and governmental organizations down to sole proprietors and individual end users.

Our solutions meet the needs of all manner of industry categories-including real estate, financial services, insurance, health care, life sciences, government, higher education, communications, retail, manufacturing, travel and nonprofit—as well as the diverse number of customer-facing and back—office use cases within organizations—including sales, marketing, services, procurement, human resources, IT, legal and others.

Our products meet the needs of all manner of industry categories-including real estate, financial services, insurance, health care, life sciences, government, higher education, communications, retail, manufacturing, travel and nonprofit—as well as the diverse number of customer-facing and back-office use cases within organizations—including sales, marketing, services, procurement, human resources, IT, legal and others.

No single customer accounted for more than 10% of our revenues in fiscal 2021.

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Our direct sales team focuses on companies looking to streamline front office operations (e.g., sales, services or marketing) and back office operations (e.g., human resources, procurement, finance or legal).

By expanding within an organization, we believe we can generate large amounts of incremental revenue through the addition of new users and Envelopes, plan upgrades and expansions to other departments or business units.

By expanding within an organization, we believe we can generate large amounts of incremental revenue through the addition of new users and Envelopes, plan upgrades, expansions, and additional offerings to other departments or business units.

▪ Partner-assisted Sales :

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We intend to invest further in collaborating with these partners, especially those that are creating their own Agreement Cloud practices.

We partner with a host of leading independent software vendors—including our strategic partners above as well as other companies like Ellie Mae and Guidewire—to help bring the power of DocuSign to customers around the world.

We partner with a host of leading independent software vendors—including our strategic partners above as well as vertical-oriented partners like Ellie Mae and Guidewire—to help bring the power of the DocuSign Agreement Cloud to customers around the world.

▪ Distributors and resellers :

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We also have partnerships with solution providers such as Deutsche Telekom and others that have expertise in specific vertical and regional markets, enabling us to add further value directly to those markets.

DocuSign, Inc.| 2021 Form 10-K | 10

▪ Web-based Sales :

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We offer in-depth expertise, proven best practices and repeatable delivery methodologies designed to ensure success, regardless of the complexity of the organization or technology environment.

As of January 31, 2020, we had 3,909 employees, consisting of 760 in engineering, product development and customer operations, 2,303 in sales and services, 309 in marketing and operations and 537 in general and administrative.

Human Capital Management

Our mission is to simplify and accelerate the way organizations and individuals come to agreement.

We are committed to building trust and making the world more agreeable for our employees, customers and the communities in which we live and work.

As of January 31, 2021, we had 5,630 employees, of which approximately 67% were in sales, marketing and customer success, 20% in engineering, product development and customer operations and 13% in general and administrative.

We had approximately 71% of our employees based in the U.S.

and the remainder in international locations.

None of our employees is represented by a labor union with respect to his or her employment with us.

We have not experienced any work stoppages and we consider our relations with our employees to be good.

Expanded Support During the COVID-19 Pandemic

In light of extraordinary circumstances under the COVID-19 pandemic, we have created new resources for our employees in order to assist with the transition to a remote work environment.

The health and safety of our employees is of utmost priority.

The majority of our employees have the opportunity to work remotely until October 2021, which may be extended for health and safety reasons.

We have also invested in several programs designed to promote employee well-being and ensure that our employees are as effective at home as they would be in our offices worldwide.

These include additional wellness benefits, additional time-off opportunities, and special reimbursements and stipends designed to support our employees and their families.

Talent and Career Development

We are a global, inclusive organization with an increasingly international footprint.

As we continue to grow in new markets, we anticipate continuing to recruit in new geographies.

DocuSign, Inc.| 2021 Form 10-K | 11

DocuSign is recognized as a company where employees can develop their careers.

During fiscal 2021, we were ranked among the Top 15 Best Places to Work (U.S.

Large Company) on Glassdoor, and we have been listed as a Top 15 Best Places to Work (U.S.

Large Companies) for the last 5 consecutive years.

We measure our employee satisfaction yearly through our fall engagement survey.

At DocuSign, we believe in empowering employees so that they can do the work of their lives:

we want everyone to be able do challenging and meaningful work in an environment where each employee can be heard, exchange ideas openly, learn new skills and build lasting relationships.

We offer a number of resources to eligible employees to help engage and develop our employees including career development coursework and frameworks and education assistance for eligible employees.

Compensation and Benefits Programs

Our compensation programs are designed to recruit, reward and retain talented individuals who possess the skills necessary to support our business, contribute to our strategic goals and create long-term value for our stockholders.

We provide employees with competitive compensation packages that include base salary, bonus or commission plan and equity awards tied to the value of our stock price.

We also provide a range of health, savings, retirement, time-off and wellness benefits for our employees, which vary based on local regulations and norms.

Diversity and Inclusion

We believe that having diverse teams working in an inclusive environment will help us achieve better business results — across product innovation, customer experience and employee success.

The key pillars to our diversity and inclusion strategy include:

We seek to increase the diversity of individual candidates applying to help us develop our products and our business.

• Candidate Experience :

We have developed specialized interview training in which employees learn how to implement bias interrupters and understand the importance of building diverse slates of candidates and interviewers.

• Education :

Through management training, speaker series and online learning, we are actively raising awareness, cultivating an inclusive culture and building practical skills for mitigating bias.

For example, in fiscal 2021, we launched our Understanding Bias and Demonstrating Allyship workshop.

• Community :

DocuSign’s Employee Resource Groups provide employees a way to meet colleagues outside peer groups, participate in personal and professional learning and development and give back to the community through volunteering, donation drives, and awareness campaigns.

We publish employee diversity information by gender and race/ethnicity on our website to promote accountability and underscore our commitment to diversity.

Engagement in our Communities

DocuSign is dedicated to corporate responsibility and putting our values into action.

With DocuSign IMPACT, we are committed to harnessing the power of DocuSign's people, products, and profits to make a difference in the global communities where our employees and customers live and work.

In 2018, we committed to donating at least $31 million in cash or stock to DocuSign IMPACT in the coming years.

In addition, the use of our products is associated with decreased paper use for our customers and we are particularly committed to protecting our environment.

We specifically donate to forest-protection and other environmental impact causes, amongst others.

Additionally, we match funds given by our employees to qualifying non-profits.

We believe in promoting a culture of giving back and community support throughout our organization.

As a company, we ensure that thousands of charitable organizations have the opportunity to use our products for free or at a discount every year.

We also encourage our employees to take action in their own communities by volunteering and are proud to support their efforts by providing up to 24 hours of paid time off a year for volunteering.

Our employees have volunteered thousands of hours collectively, including at organizations promoting healthier forests, echoing our company-wide commitment to environmental savings.

Our Competition

Our primary global competitor for eSignature is currently Adobe, which began to offer an electronic signature solution following its acquisition of EchoSign in 2011 (now known as Adobe Sign).

Other global software companies may elect to include an electronic signature capability in their products.

Other global software companies may elect to

DocuSign, Inc.| 2021 Form 10-K | 12

include an electronic signature capability in their products.

We also face competition from a select number of niche vendors that focus on specific industries, geographies or product areas such as contract lifecycle management and advanced contract analytics.

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As of January 31, 2021, we had 46 issued patents in the U.S.

and 66 issued patents in foreign countries, which expire between September 2020 and November 2036, and 12 patent applications pending examination and one allowed patent application in the U.S.

and 68 issued patents in foreign countries, which expire between July 2021 and November 2036, and 53 patent applications pending examination and two allowed patent applications in the U.S.

and 8 patent applications pending examination and one allowed application in foreign countries.

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Our website address is www.DocuSign.com.

The information contained in, or accessible through, the websites referred to in this Annual Report on Form 10-K is not incorporated into this filing.

The information contained in, or accessible through, our website or any other websites referred to in this Annual Report on Form 10-K are not incorporated into this filing.

Further, our references to website addresses are only as inactive textual references.

DocuSign, Inc.| 2021 Form 10-K | 13

“DocuSign,” the DocuSign logo, and other trademarks or service marks of DocuSign, Inc.

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Such reports and other information filed or furnished by us with the SEC are available free of charge on our website at investor.docusign.com, as soon as reasonably practicable after we file such material with, or furnish it to, the SEC, when such reports are available on the SEC’s website at www.sec.gov.

We use our website, including investor.docusign.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

We use our website, including our investor relations website at investor.docusign.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

DocuSign, Inc.| 2021 Form 10-K | 14

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business