What changed in this filing

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Item 1. Financial Statements

2021-09-03 compared with 2021-06-04 · 151 added, 117 removed, 493 unchanged (35% of the section changed)

Financial Statements (unaudited)

Condensed Consolidated Balance Sheets as of April 30, 2021 and January 31, 2021

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended April 30, 2021 and 2020

Condensed Consolidated Statement of Stockholders' Equity for the Three Months Ended April 30, 2021 and 2020

Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 30, 2021 and 2020

Condensed Consolidated Balance Sheets as of July 3 1 , 2021 and January 31, 2021

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended July 3 1 , 2021 and 2020

Condensed Consolidated Statement s of Stockholders' Equity for the Three and Six Months Ended July 3 1 , 2021 and 2020

Condensed Consolidated Statements of Cash Flows for the Six Months Ended July 3 1 , 2021 and 2020

Notes to Condensed Consolidated Financial Statements

56 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except per share data) April 30, 2021 January 31, 2021

(in thousands, except per share data) July 31, 2021 January 31, 2021

Current assets

1 unchanged sentence

Investments—current 304,292 207,450

Accounts receivable, net of allowance for doubtful accounts of $ 5,393 and $ 5,362 as of April 30, 2021 and January 31, 2021

Accounts receivable, net of allowance for doubtful accounts of $ 6,437 and $ 5,362 as of July 31, 2021 and January 31, 2021

284,730 323,570

29 unchanged sentences

Preferred stock, $ 0.0001 par value;

10,000 shares authorized, 0 shares issued and outstanding as of April 30, 2021 and January 31, 2021

10,000 shares authorized, 0 shares issued and outstanding as of July 31, 2021 and January 31, 2021

Common stock, $ 0.0001 par value;

500,000 shares authorized, 194,734 shares outstanding as of April 30, 2021;

500,000 shares authorized, 196,467 shares outstanding as of July 31, 2021;

500,000 shares authorized, 192,807 shares outstanding as of January 31, 2021

Treasury stock, at cost:

5 shares as of April 30, 2021 and 5 shares as of January 31, 2021

5 shares as of July 31, 2021 and January 31, 2021

( 1,219 ) ( 1,048 )

10 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

(in thousands, except per share data) 2021 2020 2021 2020

14 unchanged sentences

Interest expense ( 1,669 ) ( 7,684 ) ( 3,341 ) ( 15,244 )

Interest income and other income, net 6,037 3,742

Interest income and other income (expense), net ( 1,063 ) 2,601 4,974 6,343

Loss before provision for income taxes ( 25,343 ) ( 63,718 ) ( 31,715 ) ( 109,389 )

16 unchanged sentences

DocuSign, Inc.

| 2022 Form 10Q | 6

DOCUSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

1 unchanged sentence

(in thousands) Shares Amount

Balances at April 30, 2021 194,734 $ 19 $ 1,615,646 $ ( 1,219 ) $ 5,358 $ ( 1,376,567 ) $ 243,237

Settlement of convertible senior notes due in 2023 234 1 ( 279 ) — — — ( 278 )

Exercise of stock options 624 — 5,202 — — — 5,202

Settlement of restricted stock units 865 — — — — — —

Tax withholding on net share settlement of restricted stock units — — ( 114,481 ) — — — ( 114,481 )

Charitable donation of common stock 10 3,000 3,000

Employee stock-based compensation — — 102,809 — — — 102,809

Net loss — — — — — ( 25,501 ) ( 25,501 )

Other comprehensive loss, net — — — — ( 2,112 ) — ( 2,112 )

Balances at July 31, 2021 196,467 $ 20 $ 1,611,897 $ ( 1,219 ) $ 3,246 $ ( 1,402,068 ) $ 211,876

Balances at April 30, 2020 183,428 $ 18 $ 1,714,462 $ — $ ( 6,703 ) $ ( 1,184,989 ) $ 522,788

Exercise of stock options 460 — 5,403 — — — 5,403

Settlement of restricted stock units 1,002 1 ( 1 ) — — — —

Tax withholding on net share settlement of restricted stock units — — ( 89,449 ) — — — ( 89,449 )

Issuance of shares as consideration for acquisition 247 — 48,361 — — — 48,361

Employee stock-based compensation — — 70,547 — — — 70,547

Net loss — — — — — ( 64,560 ) ( 64,560 )

Other comprehensive income, net — — — — 8,801 — 8,801

Balances at July 31, 2020 185,137 $ 19 $ 1,749,323 $ — $ 2,098 $ ( 1,249,549 ) $ 501,891

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

DocuSign, Inc.

| 2022 Form 10Q | 7

DOCUSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (Continued)

Common Stock Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders' Equity

(in thousands) Shares Amount

Balances at January 31, 2021 192,807 $ 19 $ 1,702,254 $ ( 1,048 ) $ 4,964 $ ( 1,380,452 ) $ 325,737

5 unchanged sentences

Employee stock purchase plan 132 — 23,167 — — — 23,167

Charitable donation of common stock 10 — 3,000 — — — 3,000

Employee stock-based compensation — — 186,421 — — — 186,421

Net loss — — — — — ( 33,855 ) ( 33,855 )

Other comprehensive income, net — — — — 394 — 394

Balances at April 30, 2021 194,734 $ 19 $ 1,615,646 $ ( 1,219 ) $ 5,358 $ ( 1,376,567 ) $ 243,237

Other comprehensive loss, net — — — — ( 1,718 ) — ( 1,718 )

Balances at July 31, 2021 196,467 $ 20 $ 1,611,897 $ ( 1,219 ) $ 3,246 $ ( 1,402,068 ) $ 211,876

Balances at January 31, 2020 181,254 $ 18 $ 1,685,167 $ — $ ( 1,673 ) $ ( 1,137,185 ) $ 546,327

3 unchanged sentences

Employee stock purchase plan 256 — 13,590 — — — 13,590

Issuance of common stock as consideration for acquisition 247 — 48,361 — — — 48,361

Employee stock-based compensation — — 125,340 — — — 125,340

Net loss — — — — — ( 112,364 ) ( 112,364 )

Other comprehensive loss, net — — — — ( 5,030 ) — ( 5,030 )

Balances at April 30, 2020 183,428 $ 18 $ 1,714,462 $ — $ ( 6,703 ) $ ( 1,184,989 ) $ 522,788

Other comprehensive income, net — — — — 3,771 — 3,771

Balances at July 31, 2020 185,137 $ 19 $ 1,749,323 $ — $ 2,098 $ ( 1,249,549 ) $ 501,891

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

DocuSign, Inc.

| 2022 Form 10Q | 8

DOCUSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended April 30,

Six Months Ended July 31,

(in thousands) 2021 2020

6 unchanged sentences

Fair value adjustments to strategic investments ( 5,119 ) —

Impairment of operating lease right-of-use assets 3,892 —

Non-cash operating lease costs 13,649 13,119

Stock-based compensation expense 181,095 122,318

Non-cash charitable donation 3,000 —

Deferred income taxes ( 1,250 ) ( 284 )

13 unchanged sentences

Cash flows from investing activities:

Cash paid for acquisition, net of acquired cash ( 6,388 ) ( 180,370 )

Purchases of marketable securities ( 185,628 ) ( 11,667 )

1 unchanged sentence

Maturities of marketable securities 113,171 301,416

Purchases of strategic investments ( 500 ) —

Purchases of other investments — ( 3,000 )

Purchases of strategic and other investments ( 500 ) ( 3,241 )

Purchases of property and equipment ( 28,534 ) ( 44,751 )

12 unchanged sentences

$ 518,858 $ 404,542

(1) $ 0.3 million of restricted cash was included in Other assets—noncurrent at April 30, 2021, and January 31, 2021.

(1) $ 0.3 million of restricted cash was included in Prepaid expenses and other current assets at July 31, 2021, and in Other assets—noncurrent at January 31, 2021.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

DocuSign, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (Unaudited)

Three Months Ended April 30,

| 2022 Form 10Q | 9

DOCUSIGN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Continued)

Six Months Ended July 31,

(in thousands) 2021 2020

7 unchanged sentences

Fair value of shares issued as part of the repayments of convertible senior notes 133,288 —

Fair value of shares issued as consideration for acquisition — 48,361

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

DocuSign, Inc.

| 2022 Form 10Q | 10

DOCUSIGN, INC.

Index for Notes to the Condensed Consolidated Financial Statements

2 unchanged sentences

Property and Equipment, Net

Intangible Assets, Net

Deferred Contract Acquisition and Fulfillment Costs

4 unchanged sentences

DocuSign, Inc.

| 2022 Form 10Q | 11

DOCUSIGN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

15 unchanged sentences

Our condensed consolidated balance sheet as of January 31, 2021 was derived from audited financial statements but does not include all disclosures required by U.S.

The results of operations for the three months ended April 30, 2021 are not necessarily indicative of the results to be expected for the year ending January 31, 2022 .

The results of operations for the three and six months ended July 31, 2021 are not necessarily indicative of the results to be expected for the year ending January 31, 2022 .

O ur fiscal year ends on January 3 1.

12 unchanged sentences

• the recognition, measurement and valuation of deferred income taxes.

Since the emergence of the COVID-19 pandemic, we have undertaken measures to protect our employees, partners and customers, including providing the majority of our employees the option to work remotely until at least October 4, 2021.

Since the emergence of the COVID-19 pandemic in March 2020, we have undertaken measures to protect our employees, partners and customers, including providing the majority of our employees the option to work remotely until at least January 10, 2022.

However, there can be no assurance that these measures will be effective, that we will be able to adopt new measures as needed or that we will be able to discontinue these measures without adversely affecting our business operations.

In addition, the COVID-19 pandemic and related recent developments (including, for example, vaccine deployments, national and regional outbreaks, and the emergence of disease variants) have created and may continue to create significant uncertainty in global financial markets, which may decrease technology spending, depress demand for our products and harm our business and results of operations.

As of the date of issuance of the financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities.

These estimates may change, as new events occur and additional information is obtained, and are recognized in the condensed consolidated financial statements as soon as they

become known.

In addition, the COVID-19 pandemic and related recent developments (including vaccine deployments, national and regional outbreaks and the emergence of disease variants) have created and may continue to create significant uncertainty in global financial markets, which may decrease technology spending, depress demand for our products and harm our business and results of operations.

As of the date of issuance of the financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates or judgments or revise the carrying value of our assets or liabilities, except for a sublease that resulted in an impairment of $ 3.9 million on operating lease right-of-use assets recorded during the three months ended July 31, 2021.

DocuSign, Inc.

| 2022 Form 10Q | 12

estimates may change as new events occur and additional information is obtained, which could be recognized in the condensed consolidated financial statements as soon as they become known.

Actual results could differ from those estimates and any such differences may be material to our financial statements.

Significant Accounting Policies

Other than as described below, there have been no changes to our significant accounting policies described in our fiscal 2021 Annual Report on Form 10-K that have had a material impact on our consolidated financial statements and related notes.

Convertible Debt

On February 1, 2021, we early adopted Accounting Standards Update (“ASU”) No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) using the modified retrospective approach.

Effective February 1, 2021, we account for our convertible debt instruments as a single liability measured at its amortized cost.

See “Recently Adopted Accounting Pronouncements” below.

At issuance, the carrying amount is calculated as the proceeds, net of initial purchasers’ discounts and transaction costs.

4 unchanged sentences

On February 1, 2021, we early adopted ASU No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) using the modified retrospective approach.

This ASU removes separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature.

5 unchanged sentences

• a cumulative-effect adjustment of $ 12.2 million to the beginning balance of accumulated deficit as of February 1, 2021.

Other Recent Accounting Pronouncements

Other recently issued accounting pronouncements are not expected to have a material impact on our consolidated financial statements.

Subscription revenue is recognized over time and accounted for approximately 96 % and 95 % of our revenue for the three months ended April 30, 2021 and 2020.

Subscription revenue is recognized over time and accounted for approximately 96 % and 95 % of our revenue for the three months ended July 31, 2021 and 2020 and approximately 96 % and 95 % of our revenue for the six months ended July 31, 2021 and 2020.

Performance Obligations

As of April 30, 2021, the amount of the transaction price allocated to remaining performance obligations for contracts greater than one year was $ 1.2 billion.

We expect to recognize 53 % of the transaction price allocated to remaining performance obligations within the 12 months following April 30, 2021 in our consolidated statement of operations and comprehensive loss.

As of July 31, 2021, the amount of the transaction price allocated to remaining performance obligations for contracts greater than one year was $ 1.3 billion.

We expect to recognize 52 % of the transaction price allocated to remaining performance obligations within the 12 months following July 31, 2021 in our condensed consolidated statement of operations and comprehensive loss.

DocuSign, Inc.

| 2022 Form 10Q | 13

Contract Balances

Contract assets represent amounts for which we have recognized revenue, pursuant to our revenue recognition policy, for contracts that have not yet been fully invoiced to our customers where there remains a performance obligation, typically for our multi-year arrangements.

Total contract assets were $ 15.9 million and $ 17.5 million as of April 30, 2021 and January 31, 2021, of which $ 0.6 million and $ 0.6 million were noncurrent and included within “Other assets—noncurrent” on our condensed consolidated balance sheets.

Total contract assets were $ 14.6 million and $ 17.5 million as of July 31, 2021 and January 31, 2021, of which $ 0.6 million and $ 0.6 million were noncurrent and included within “Other assets—noncurrent” on our condensed consolidated balance sheets.

The change in contract assets reflects the difference in timing between the satisfaction of our remaining performance obligations and our contractual right to bill our customers.

1 unchanged sentence

Such amounts are generally recognized as revenue over the contractual period.

For the three months ended April 30, 2021 and 2020, we recognized revenue of $ 357.8 million and $ 224.7 million that was included in the corresponding contract liability balance at the beginning of the periods presented.

For the six months ended July 31, 2021 and 2020, we recognized revenue of $ 595.4 million and $ 375.8 million that was included in the corresponding contract liability balance at the beginning of the periods presented.

We receive payments from customers based upon contractual billing schedules.

3 unchanged sentences

The following table summarizes our financial assets that are measured at fair value on a recurring basis:

April 30, 2021

July 31, 2021

(in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

3 unchanged sentences

Commercial paper (1)

160,860 8 ( 22 ) 160,846

Corporate notes and bonds 193,624 61 ( 55 ) 193,630

Treasury securities 4,999 1 — 5,000

government agency securities 50,535 8 ( 7 ) 50,536

governmental securities 32,548 4 — 32,552

Level 2 total 387,032 73 ( 77 ) 387,028

Available-for-sale securities

Corporate notes and bonds 500 — — 500

Total $ 504,199 $ 73 $ ( 77 ) $ 504,195

6 unchanged sentences

Corporate notes and bonds 199,277 375 ( 67 ) 199,585

Treasury securities 4,998 — — 4,998

government agency securities 53,052 12 ( 6 ) 53,058

governmental securities 58,050 12 ( 6 ) 58,056

Level 2 total 299,375 388 ( 96 ) 299,667

2 unchanged sentences

Total $ 584,187 $ 388 $ ( 96 ) $ 584,479

(1) Included in “cash and cash equivalents” in our consolidated balance sheets as of April 30, 2021, and January 31, 2021, in addition to cash of $ 371.1 million and $ 281.7 million.

DocuSign, Inc.

| 2022 Form 10Q | 14

(1) Included in “cash and cash equivalents” in our consolidated balance sheets as of July 31, 2021, in addition to cash of $ 382.8 million and commercial paper of $ 18.6 million.

(2) Included in “cash and cash equivalents” in our consolidated balance sheets as of January 31, 2021, in addition to cash of $ 281.7 million.

We use quoted prices in active markets for identical assets to determine the fair value of our Level 1 investments.

1 unchanged sentence

The fair value of our Level 3 investments is determined based on an income approach using unobservable inputs.

The fair value of our available-for-sale securities as of April 30, 2021, by remaining contractual maturities, were as follows (in thousands):

The fair value of our available-for-sale securities as of July 31, 2021, by remaining contractual maturities, were as follows (in thousands):

Due in one year or less $ 322,940

Due in one to two years 64,088

As of April 30, 2021 and January 31, 2021, securities in an unrealized loss position were individually and in aggregate not material.

As of July 31, 2021 and January 31, 2021, securities in an unrealized loss position were, individually and in aggregate, not material.

An allowance for credit losses was deemed unnecessary for these securities, given the extent of the unrealized loss positions as well the issuers' high credit ratings and consistent payment history.

We had no liabilities measured at fair value on a recurring basis as of April 30, 2021 and January 31, 2021.

Strategic Investments

During the three months ended April 30, 2021, investments in equity securities without readily determinable fair values increased by $ 5.1 million due to adjustments related to observable price changes.

During the six months ended July 31, 2021, investments in equity securities without readily determinable fair values increased by $ 4.8 million due to adjustments related to observable price changes that occurred primarily during the three months ended April 30, 2021.

Such investments are recorded in “Other assets—noncurrent” on our condensed consolidated balance sheets.

Convertible Senior Notes

We estimated the fair value of the Notes based on the quoted market prices in an inactive market on the last trading day of the reporting period (Level 2).

We estimated the fair value of the convertible senior notes based on the quoted market prices in an inactive market on the last trading day of the reporting period (Level 2).

The Notes are recorded at face value less unamortized debt discount and transaction costs as “Convertible senior notes—current” and “Convertible senior notes, net—noncurrent” on our condensed consolidated balance sheets.

Refer to Note 6 for further information.

(in thousands) April 30, 2021 January 31, 2021

(in thousands) July 31, 2021 January 31, 2021

0.5 % Convertible Senior Notes due in 2023

4 unchanged sentences

Fair value amount 736,713 725,100

DocuSign, Inc.

| 2022 Form 10Q | 15

Property and Equipment, Net

Property and equipment consisted of the following:

(in thousands) April 30, 2021 January 31, 2021

(in thousands) July 31, 2021 January 31, 2021

Computer and network equipment $ 112,420 $ 102,163

6 unchanged sentences

Work in progress 36,592 25,473

$ 164,128 $ 165,039

Depreciation and amortization expense associated with property and equipment was $ 13.5 million and $ 9.8 million for the three months ended April 30, 2021 and 2020.

For the three months ended April 30, 2021 and 2020, we capitalized $ 7.8 million and $ 5.1 million of internally developed software.

Intangible Assets, Net

Intangible assets consisted of the following:

As of April 30, 2021 As of January 31, 2021

(in thousands, except years) Weighted-average Remaining Useful Life (Years) Estimated Fair Value Accumulated Amortization Acquisition-related Intangibles, Net Estimated Fair Value Accumulated Amortization Acquisition-related Intangibles, Net

Existing technology 3.7 $ 72,994 $ ( 38,808 ) $ 34,186 $ 72,994 $ ( 35,613 ) $ 37,381

Customer contracts & related relationships 7.7 110,082 ( 32,022 ) 78,060 110,082 ( 29,393 ) 80,689

Other 1.0 22,534 ( 20,107 ) 2,427 22,534 ( 19,356 ) 3,178

6.4 $ 205,610 $ ( 90,937 ) 114,673 $ 205,610 $ ( 84,362 ) 121,248

Cumulative translation adjustment 336 580

Total $ 173,983 $ 165,039

Amortization of finite-lived intangible assets was as follows:

Three Months Ended April 30,

(in thousands) 2021 2020

Cost of subscription revenue $ 3,171 $ 1,348

Sales and marketing 3,358 2,911

Total $ 6,529 $ 4,259

As of April 30, 2021, future amortization of finite-lived intangibles that will be recorded is estimated as follows, excluding cumulative translation adjustment:

Fiscal Period:

Amount (in thousands)

2022, remainder $ 17,707

Thereafter 28,099

Total $ 114,673

Depreciation and amortization expense associated with property and equipment was $ 14.3 million and $ 10.5 million for the three months ended July 31, 2021 and 2020, and $ 27.8 million and $ 20.3 million for the six months ended July 31, 2021 and 2020.

For the three months ended July 31, 2021 and 2020, we capitalized $ 9.3 million and $ 6.8 million of internally developed software.

F or the six months ended July 31, 2021 and 2020, we capitalized $ 17.1 million and $ 11.0 million of internally developed software.

Deferred Contract Acquisition and Fulfillment Costs

The following table represents a rollforward of our deferred contract acquisition and fulfillment costs:

Three Months Ended April 30,

Six Months Ended July 31,

(in thousands) 2021 2020

13 unchanged sentences

The net proceeds from the issuance of the 2023 Notes were $ 560.8 million after deducting the initial purchasers’ discounts and transaction costs.

In each fiscal quarter since the quarter ended July 31, 2020, the last reported sales price of our common stock for at least 20 trading days during a period of 30 consecutive trading days ending on, and including, the last trading day was greater than or equal to 130 % of the conversion price of the 2023 Notes.

The 2023 Notes therefore became convertible on August 1, 2020 and continue to be convertible through April 30, 2021.

Based upon the reported sales price of our common stock, the 2023 Notes became convertible on August 1, 2020 and continue to be convertible through July 31, 2021.

In January 2021 we issued $ 690.0 million in aggregate principal amount of the 0 % Convertible Senior Notes due in 2024 (“2024 Notes,” and together with the 2023 Notes, the “Notes”).

The net proceeds from the issuance of the 2024 Notes were $ 677.3 million after deducting the initial purchasers’ discounts and transaction costs.

As of April 30, 2021, the conversion conditions for the 2024 Notes described in our 2021 Annual Report on Form 10-K were not met.

As of July 31, 2021, the conversion conditions for the 2024 Notes described in our 2021 Annual Report on Form 10-K were not met.

DocuSign, Inc.

| 2022 Form 10Q | 16

Conversions of the 2023 Notes

Early conversions and settlements of the Notes during the three months ended April 30, 2021 were accounted for under ASU 2020-06.

We accounted for early conversions and settlements of the 2023 Notes during the six months ended July 31, 2021 under ASU 2020-06.

Refer to Note 1 for further discussion of early adoption.

During the three months ended April 30, 2021, we settled $ 36.7 million aggregate amount of the principal of 2023 Notes, including $ 23.9 million elected for conversion as of January 31, 2021, for aggregate consideration of $ 111.3 million, consisting of $ 36.7 million in cash and 0.4 million shares of our common stock with a value of $ 74.7 million.

During the six months ended July 31, 2021, we settled $ 61.7 million aggregate amount of the principal of 2023 Notes, including $ 23.9 million elected for conversion as of January 31, 2021, for aggregate consideration of $ 195.0 million, consisting of $ 61.7 million in cash and 0.6 million shares of our common stock with a value of $ 133.3 million.

The $ 0.7 million excess of the cash consideration over the corresponding carrying value was recorded as a reduction to additional paid-in capital.

Additionally, as of April 30, 2021, we had received conversion notices on our 2023 Notes for $ 13.5 million in aggregate principal amount to be settled in the following quarter.

The corresponding carrying value is reflected in Convertible senior notes—current on our condensed consolidated balance sheet.

From May 1, 2021 through June 3, 2021, we received conversion notices on our 2023 Notes for $ 10.0 million in aggregate principal amount, for which we elected to settle the principal amount in cash during the three months ended July 31, 2021.

Additionally, as of July 31, 2021, we had received conversion notices on our 2023 Notes for $ 2.0 million in aggregate principal amount, the corresponding carrying value is reflected in Convertible senior notes—current on our condensed consolidated balance sheet.

From August 1, 2021 through September 2, 2021, we received conversion notices on our 2023 Notes for $ 1.1 million in aggregate principal amount.

We plan to settle the principal amount in cash during the three months ended October 31, 2021.

DocuSign, Inc.

| 2022 Form 10Q | 17

The net carrying amounts of the liability and equity components of the Notes were as follows:

(in thousands) April 30, 2021 January 31, 2021

(in thousands) July 31, 2021 January 31, 2021

Principal $ 53,289 $ 115,000

17 unchanged sentences

Interest expense recognized related to the Notes was as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

(in thousands) 2021 2020 2021 2020

13 unchanged sentences

(1) Subject to adjustments for certain events, such as merger events and tender offers, and anti-dilution adjustments

DocuSign, Inc.

| 2022 Form 10Q | 18

Impact on Loss Per Share

After February 1, 2021, the date of the adoption of ASU 2020-06, in periods when we have net income, the shares of our common stock subject to the Notes outstanding during the period are included in our diluted earnings per share under the if-converted method.

After February 1, 2021, upon adoption of ASU 2020-06, in periods when we have net income, the shares of our common stock subject to the Notes outstanding during the period are included in our diluted earnings per share under the if-converted method.

As of the beginning of the fourth quarter of 2021, share settlement was presumed, and shares subject to the Notes would have been included under the if-converted method.

2 unchanged sentences

Upon conversion, there will be no economic dilution from the Notes unless the market price of our common stock exceeds the cap prices listed above in the Capped Calls section, as exercise of the Capped Calls offsets any dilution from the Notes from the conversion price up to the cap price.

As of April 30, 2021, the market price of our common stock exceeded the $ 110.00 per share cap price associated with the 2023 Notes but not the $ 525.30 cap price associated with the 2024 Notes;

As of July 31, 2021, the market price of our common stock exceeded the $ 110.00 per share cap price associated with the 2023 Notes but not the $ 525.30 cap price associated with the 2024 Notes;

therefore, the 2023 Notes would have caused economic dilution if converted.

2 unchanged sentences

The credit agreement extended a senior secured revolving credit facility (the “Credit Facility”) to us in an aggregate principal amount of $ 500.0 million, which amount may be increased by an additional $ 250.0 million subject to the terms of the credit agreement.

We may use the proceeds of future borrowings under the credit facility to finance working capital, capital expenditures and for other general corporate purposes, including permitted acquisitions.

We may use the proceeds of future borrowings under the credit facility to finance working capital, for capital expenditures and for other general corporate purposes, including permitted acquisitions.

The Credit Facility matures in January 2026 and requires us to comply with customary affirmative and negative covenants.

We were in compliance with all covenants as of April 30, 2021.

As of April 30, 2021, there were no outstanding borrowings under the Credit Facility.

We were in compliance with all covenants as of July 31, 2021.

As of July 31, 2021, there were no outstanding borrowings under the Credit Facility.

The Credit Facility is subject to customary fees for loan facilities of this type, including ongoing commitment fees at a rate between 0.25 % and 0.30 % per annum on the daily undrawn balance.

Commitments and Contingencies

As of April 30, 2021, we had unused letters of credit outstanding associated with our various operating leases totaling $ 7.7 million.

We have entered into certain noncancelable contractual arrangements that require future purchases of goods and services.

As of July 31, 2021, we had outstanding unused letters of credit associated with our various operating leases totaling $ 7.4 million.

We have entered into certain noncancellable contractual arrangements that require future purchases of goods and services.

These arrangements primarily relate to cloud infrastructure support and sales and marketing activities.

As of April 30, 2021, the future noncancelable minimum payments due under these contractual obligations with a remaining term of more than one year were as follows:

As of July 31, 2021, the future noncancellable minimum payments due under these contractual obligations with a remaining term of more than one year were as follows:

Fiscal Period:

3 unchanged sentences

Total $ 94,343

DocuSign, Inc.

| 2022 Form 10Q | 19

Indemnification

4 unchanged sentences

Historically, we have not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements.

As a result, we believe the fair value of these indemnification agreements is not material as of April 30, 2021, and January 31, 2021.

As a result, we believe the fair value of these indemnification agreements is not material as of July 31, 2021, and January 31, 2021.

We maintain commercial general liability insurance and product liability insurance to offset certain of our potential liabilities under these indemnification agreements.

12 unchanged sentences

Outstanding awards under these two plans continue to be subject to the terms and conditions of the respective plans.

As of April 30, 2021, 43.1 million shares of our common stock were available for issuance under the 2018 Plan.

As of July 31, 2021, 42.2 million shares of our common stock were available for issuance under the 2018 Plan.

The 2018 Plan provides that the number of shares reserved will automatically increase on the first day of each fiscal year, beginning on February 1, 2019 and ending on February 1, 2028, by 5 % of the total number of shares of our capital stock outstanding on the immediately preceding January 31st (or such lesser number of shares as our board of directors or a committee of our board of directors may approve).

6 unchanged sentences

The market-based conditions will be satisfied if certain milestones based on our common stock price or relative total shareholder return are met.

RSU activity for the three months ended April 30, 2021 was as follows:

DocuSign, Inc.

| 2022 Form 10Q | 20

RSU activity for the six months ended July 31, 2021 was as follows:

(in thousands, except per share data) Number of Units Weighted-Average Grant Date Fair Value

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Canceled ( 757 ) $ 93.58

Unvested at April 30, 2021 9,194 $ 94.26

As of April 30, 2021, our total unrecognized compensation cost related to RSUs was $ 671.2 million.

Unvested at July 31, 2021 9,305 $ 119.83

As of July 31, 2021, our total unrecognized compensation cost related to RSUs was $ 869.0 million.

We expect to recognize this expense over the remaining weighted-average period of approximately 2.3 years.

Stock Options

Option activity for the three months ended April 30, 2021 was as follows:

Option activity for the six months ended July 31, 2021 was as follows:

(in thousands, except years and per share data) Number of Options Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value

1 unchanged sentence

Exercised ( 1,112 ) 13.52

Outstanding at April 30, 2021, all vested and exercisable 4,310 $ 15.78 4.9 $ 892,949

As of April 30, 2021, there was no remaining unrecognized compensation cost related to stock option grants.

Outstanding at July 31, 2021, all vested and exercisable 3,686 $ 16.16 4.8 $ 1,039,112

As of July 31, 2021, there was no remaining unrecognized compensation cost related to stock option grants.

2018 Employee Stock Purchase Plan

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The ESPP provides for separate six-month offering periods that begin in the first and third quarter of each year.

In the three months ended April 30, 2021, 0.1 million shares of our common stock were purchased under the ESPP.

Compensation expense related to the ESPP was $ 4.3 million and $ 1.9 million for the three months ended April 30, 2021 and 2020.

The number of shares reserved under the ESPP will automatically increase on the first day of each fiscal year, starting on February 1, 2019 and continuing through February 1, 2028, in an amount equal to the lesser of (i) 1 % of the total number of shares of our common stock outstanding on January 31 of the preceding fiscal year, (ii) 3.8 million shares, or (iii) a lesser number of shares determined by our board of directors.

As of April 30, 2021, 8.1 million shares of our common stock were reserved for issuance under the ESPP.

In the six months ended July 31, 2021, 0.1 million shares of our common stock were purchased under the ESPP.

Compensation expense related to the ESPP was $ 4.8 million and $ 2.9 million for the three months ended July 31, 2021 and 2020, and $ 9.1 million and $ 4.8 million for the six months ended July 31, 2021 and 2020.

The number of shares reserved under the ESPP will automatically increase on the first day of each fiscal year through February 1, 2028, in an amount equal to the lesser of (i) 1 % of the total number of shares of our common stock outstanding on January 31 of the preceding fiscal year, (ii) 3.8 million shares or (iii) a lesser number of shares determined by our board of directors.

As of July 31, 2021, 8.1 million shares of our common stock were reserved for issuance under the ESPP.

DocuSign, Inc.

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Net Loss per Share Attributable to Common Stockholders

The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders for periods presented:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

(in thousands, except per share data) 2021 2020 2021 2020

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There were no material discrete items in the quarter.

Our income tax provision was $ 2.0 million and $ 2.1 million for the three months ended April 30, 2021 and 2020.

Our income tax provision was $ 0.2 million and $ 0.8 million for the three months ended July 31, 2021 and 2020.

Our income tax provision was $ 2.1 million and $ 3.0 million for the six months ended July 31, 2021 and 2020.

We review the likelihood that we will realize the benefit of our deferred tax assets and, therefore, the need for valuation allowances, on a quarterly basis.

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In the event we determine our deferred tax assets are realizable based on our assessment of relevant factors, an adjustment to the valuation allowance may increase income in the period such determination is made.

As of April 30, 2021, our gross unrecognized tax benefits totaled $ 35.7 million, excluding related accrued interest and penalties, of which $ 16.3 million would impact the effective tax rate if recognized.

As of July 31, 2021, our gross unrecognized tax benefits totaled $ 37.2 million, excluding related accrued interest and penalties, of which $ 16.3 million would impact the effective tax rate if recognized.

Our policy is to account for interest and penalties related to uncertain tax positions as a component of income tax provision.

1 unchanged sentence

We are subject to taxation in the United States and various foreign jurisdictions.

Our tax years from inception in 2003 through April 30, 2021 remain subject to examination by U.S.

Our tax years from inception in 2003 through July 31, 2021 remain subject to examination by U.S.

and California taxing authorities, as well as taxing authorities in various other state and foreign jurisdictions.

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We operate in one operating segment and one reportable segment as we only report financial information on an aggregate and consolidated basis to the Chief Executive Officer, who is our chief operating decision maker.

Revenue by geography is based on the address of the customer as specified in our master subscription agreement.

DocuSign, Inc.

| 2022 Form 10Q | 22

Revenue by geography is based on the address of the customer as specified in our master subscription agreements with our customers.

Revenue by geographic area was as follows:

Three Months Ended April 30,

Three Months Ended July 31, Six Months Ended July 31,

(in thousands) 2021 2020 2021 2020

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No single country other than the U.S.

had revenue greater than 10% of total revenue in the three months ended April 30, 2021 and 2020 .

had revenue greater than 10% of total revenue in the three and six months ended July 31, 2021 and 2020 .

Our long-lived assets by geographic area, which consist of property and equipment, net and operating lease right-of-use assets were as follows:

(in thousands) April 30, 2021 January 31, 2021

(in thousands) July 31, 2021 January 31, 2021

$ 219,503 $ 221,549

3 unchanged sentences

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-Q

Item 1. Financial Statements