DOCUSIGN INC
For the period ended Jul 31, 2024. Filed Sep 6, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2024 · Filed Sep 6, 2024
DOCU$77.61-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-04-30; filed 2024-06-07.
0001261333-24-000087
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-07-31; filed 2024-09-06.
0001261333-24-000121
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 95 previous paragraphs and 113 current paragraphs.
61 unchanged; 26 reworded; 25 added; 8 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 16 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Executive Overview of Second Quarter Results
Current report
We believe these combined efforts will strengthen our ability to retain and grow within our existing customer base, while also attracting new customers.
Current report
Provision for (Benefit from) Income Taxes
Current report
Our income tax benefit consists primarily of the release of a $837.7 million valuation allowance related to our U.S. deferred tax assets. We regularly assess the need for a valuation allowance on our deferred tax assets. In making this assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of available evidence, whether it is more likely than not that some or all the deferred tax assets will not be realized. As of July 31, 2024, based on all available positive and negative evidence, having demonstrated sustained U.S. profitability, which is objective and verifiable, and taking into account anticipated future earnings, we have concluded it is more likely than not that our U.S. federal and states deferred tax assets will be realizable, with the exception of certain federal deferred tax assets subject to limitation on use and our California deferred tax assets. We continue to maintain a valuation allowance against these deferred tax assets due to the uncertainty regarding realizability of these deferred tax assets as they have not met the “more likely than not” realization criterion.
Current report
•$4.7 million in personnel costs due to higher headcount driven by additional hiring and the Lexion acquisition.
Current report
Increases in the six months ended July 31, 2024, primarily consisted of:
Current report
•$10.0 million in personnel costs and $5.3 million in stock-based compensation expense due to higher headcount driven by additional hiring.
Current report
Cost of professional services revenue decreased by $6.3 million, or 21%, in the three months ended July 31, 2024, and by $11.0 million, or 19% in the six months ended July 31, 2024, primarily driven by lower headcount resulting in lower personnel costs and stock-based compensation expense for both the three months and six months ended July 31, 2024.
Current report
Sales and marketing expenses decreased by $7.4 million, or 3%, in the three months ended July 31, 2024 and by $6.3 million, or 1%, in the six months ended July 31, 2024, primarily due to a decrease in marketing and advertising costs due to shifts in line with our go-to-market strategy.
Current report
Main drivers in the three months ended July 31, 2024, primarily consisted of:
Current report
•$10.1 million decrease in marketing and advertising, including a reduction in paid search, in line with cost efficiency measures, partially offset by
Current report
•$7.2 million increase in stock-based compensation expense due to executive transitions and annual merit increases.
Current report
Main drivers in the six months ended July 31, 2024, primarily consisted of:
Current report
•$10.5 million decrease in marketing and advertising, including a reduction in paid search, in line with cost efficiency measures, partially offset by
Current report
•$8.2 million increase in stock-based compensation expense due to executive transitions and annual merit increases.
Current report
General and administrative expenses decreased by $16.8 million, or 16%, in the three months ended July 31, 2024 and $29.1 million, or 14%, in the six months ended July 31, 2024.
Current report
The decrease in the three months ended July 31, 2024, primarily consisted of $13.5 million in professional fees and related expenses, including release of litigation accruals and insurance reimbursements for defense costs.
Current report
Decreases in the six months ended July 31, 2024, primarily consisted of:
Current report
•$14.8 million in stock-based compensation expense mainly due to executive transitions that occurred in fiscal 2024; and
Current report
•$14.0 million in professional fees and related expenses, including release of litigation related accruals and insurance reimbursements related to litigation fees.
Current report
Provision for (Benefit from) Income Taxes
Current report
The change in income tax benefit for the three and six months ended July 31, 2024, was primarily due to the release of $837.7 million of our valuation allowance related to our U.S. deferred tax assets, as a discrete tax benefit during the three months ended July 31, 2024. As of July 31, 2024, based on all available positive and negative evidence, having demonstrated sustained profitability which is objective and verifiable, and taking into account anticipated future earnings, we concluded that it is more likely than not that our U.S. federal and state deferred tax assets will be realizable, with the exception of certain federal deferred tax assets subject to limitation on use and our California deferred tax assets. We will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis (see Note 13 to the Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Form 10-Q for further details).
Current report
Valuation of Acquired Intangible Assets in Business Combinations
Current report
See Note 1, “Summary of Significant Accounting Policies,” to our consolidated financial statements included in our fiscal 2024 Annual Report on Form 10-K, for information regarding our significant accounting policies for business combinations.
Current report
At the acquisition date, we make significant estimates and assumptions when we determine the fair value of acquired assets and liabilities, especially with respect to acquired intangible assets. Key assumptions include, but are not limited to, time and resources required to recreate the assets acquired. Although we believe the assumptions and estimates we have made are reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain. During the measurement period of up to one year, from the acquisition date, based on new information obtained that relates to the facts and circumstances that existed as of the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. We record adjustments identified, if any, subsequent to the end of the measurement period in our consolidated statement of operations.
Removed paragraphs (8)
Previous report
Executive Overview of First Quarter Results
Previous report
We believe these collective activities will help us retain and expand within our current customers’ organizations and attract new customers.
Previous report
Provision for Income Taxes
Previous report
Our provision for income taxes consists primarily of income taxes in certain foreign jurisdictions where we conduct business and U.S. income taxes from a tax law change related to mandatory capitalization of research and development expenses for tax years starting January 1, 2022. We maintain a valuation allowance against certain deferred tax assets, including all U.S. consolidated group deferred tax assets and certain foreign deferred tax assets as a result of our history of losses in the U.S. and certain foreign jurisdictions, and the variability and uncertainty of our operating results. 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. Given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that during fiscal year 2025, sufficient positive evidence may become available to allow us to reach a conclusion that some portion of or the entire U.S. valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of material U.S. federal and state deferred tax assets and a corresponding decrease to income tax expense estimated to be$750 million to$850 million in the period the release is recorded. The exact timing and amount of the valuation allowance release are subject to change based on the level of sustained U.S. profitability that we are able to actually achieve, as well as the amount of tax deductible stock compensation dependent upon our publicly traded stock price, market acceptance for our products and solutions offerings such as our new IAM platform, and macroeconomic conditions, among other factors.
Previous report
•$5.3 million in personnel costs due to annual salary increases and higher headcount as a result of internal reorganization in our platform and customer support organization.
Previous report
Sales and marketing expenses remained relatively flat in the three months ended April 30, 2024. We continued to invest in our marketing efforts, resulting in a slight increase in marketing expenses. Specifically, our spending on customer events increased to support the launch of our IAM platform, which was mostly offset by decreases in paid advertising. Additionally, personnel costs decreased due to lower headcount driven by the implementation of the FY2025 Restructuring Plan, which was partially offset by an increase in commissions in line with increased sales.
Previous report
General and administrative expenses decreased by $12.3 million, or 12%, in the three months ended April 30, 2024 primarily due to an $11.8 million decrease in stock-based compensation expense. Stock-based compensation expense for the three months ended April 30, 2023 included additional charges related to an executive transition.
Previous report
Additionally, in May 2024, we agreed to acquire Lexion pursuant to an Agreement and Plan of Merger in exchange for consideration of approximately $165 million in cash. The acquisition closed on May 31, 2024.
Reworded paragraphs (26)
Previous wording
Docusign offers solutions that address agreement workflows and digital transformation. Docusign’s core offerings, including the world’s leading electronic signature and CLM products, allow organizations to boost productivity, accelerate contract review cycles, and transform agreement data into insights and actions, while providing a better experience for their customers. Additionally, Docusign has introduced its IAM platform, enabling organizations to create, commit to, and manage agreements, from virtually anywhere in the world, securely. As a result, over 1.5 million customers andmore than a billion users worldwide utilize our platform to accelerate and simplify the process of doing business.
Current wording
Docusign offers solutions that address agreement workflows and digital transformation. Docusign’s core offerings, including the world’s leading electronic signature and CLM products, allow organizations to boost productivity, accelerate contract review cycles, and transform agreement data into insights and actions, while providing a better experience for their customers. Additionally, Docusign has introduced its IAM platform, enabling organizations to create, commit to, and manage agreements, from virtually anywhere in the world, securely. As a result, approximately 1.6 million customers andmore than a billion users worldwide utilize our platform to accelerate and simplify the process of doing business.
Previous wording
In addition, we expect to offer our new IAM platform on a user-based subscription basis. The subscription offerings are anticipated to have multiple pricing tiers as well as specialized packages for specific user personas and end markets beginning with sales and customer experience. The rollout of the platform and additional pricing model is expected to occur gradually starting fiscal 2025 across customer segments and geographies. As a result, we currently expect eSignature to continue to represent the majority of our revenue for the foreseeable future.
Current wording
In addition, we have begun offering our new IAM platform on a user-based subscription basis. The subscription offerings have multiple pricing tiers as well as specialized packages for specific user personas and end markets beginning with sales and customer experience. The rollout of the platform and additional pricing model began gradually in certain customer segments and geographies starting in the second quarter of fiscal 2025, and we plan to continue the platform rollout across additional segments and geographies. As a result, we currently expect eSignature to continue to represent the majority of our revenue for the foreseeable future.
Previous wording
We generate substantially all our revenue from sales of subscriptions, which accounted for 97% of our revenue in each of the three month periods ended April 30, 2024 and 2023. Our subscription fees include the use of our products and access to customer support. Subscriptions generally range from one to three years, and substantially all our multi-year customers pay in annual installments, one year in advance.
Current wording
We generate substantially all our revenue from sales of subscriptions, which accounted for 97% of our revenue in each of the three and six month periods ended July 31, 2024 and 2023. Our subscription fees include the use of our products and access to customer support. Subscriptions generally range from one to three years, and substantially all our multi-year customers pay in annual installments, one year in advance.
Previous wording
We also generate revenue from professional and other non-subscription services, which consists primarily of fees associated with providing new customers deployment and integration services. Other revenue includes amounts derived from sales of on-premises solutions. Professional services and other revenue accounted for the remainder of total revenue in each of the three months ended April 30, 2024 and 2023. We anticipate continuing to invest in customer success through our professional services offerings as we believe it plays an important role in accelerating our customers’ adoption of our products, which helps drive customer retention and expansion.
Current wording
We also generate revenue from professional and other non-subscription services, which consists primarily of fees associated with providing new customers deployment and integration services. Other revenue includes amounts derived from sales of on-premises solutions. Professional services and other revenue accounted for the remainder of total revenue in each of the three and six months ended July 31, 2024 and 2023. We anticipate continuing to invest in customer success through our professional services offerings as we believe it plays an important role in accelerating our customers’ adoption of our products, which helps drive customer retention and expansion.
Previous wording
We are highly focused on continuing to acquire new customers to support our long-term growth. We have invested, and expect to continue to invest in our go-to-market efforts involving an omnichannel approach that consists of direct sales, partner-assisted sales and digital self-service purchasing. As of April 30, 2024, we had a total of over 1.5 million customers, including approximately 248,000 enterprise and commercial customers, comp ared to over 1.4 million customers and approximately 220,000 enterprise and commercial customers as of April 30, 2023. We define a customer as a separate and distinct buying entity, such as a company, an educational or government institution, or a distinct business unit of a large company that has an active contract to access our products.
Current wording
We are highly focused on continuing to acquire new customers to support our long-term growth. We have invested, and expect to continue to invest in our go-to-market efforts involving an omnichannel approach that consists of direct sales, partner-assisted sales and digital self-service purchasing. As of July 31, 2024, we had a total of approximately 1.6 million customers, including approximately 253,000 enterprise and commercial customers, comp ared to over 1.4 million customers and approximately 226,000 enterprise and commercial customers as of July 31, 2023. We define a customer as a separate and distinct buying entity, such as a company, an educational or government institution, or a distinct business unit of a large company that has an active contract to access our products.
Previous wording
We focused initially on selling our products to commercial businesses and VSBs and later expanded our focus to target enterprise customers. The number of our customers with greater than $300,000 in annualized contract value was 1,059 customers as of April 30, 2024 compared to 1,063 customers as of April 30, 2023. Each of our customer types has a different purchasing pattern. VSBs typically become customers by quickly utilizing our digital and self-serve channels and generate smaller average contract values, while commercial and enterprise customers typically involve longer sales cycles, larger contract values and greater expansion opportunities for us.
Current wording
We focused initially on selling our products to commercial businesses and VSBs and later expanded our focus to target enterprise customers. The number of our customers with greater than $300,000 in annualized contract value was 1,066 customers as of July 31, 2024 compared to 1,047 customers as of July 31, 2023. Each of our customer types has a different purchasing pattern. VSBs typically become customers by quickly utilizing our digital and self-serve channels and generate smaller average contract values, while commercial and enterprise customers typically involve longer sales cycles, larger contract values and greater expansion opportunities for us.
Previous wording
Financial Results for the Three Months Ended April 30, 2024 and 2023
Current wording
Financial Results for the Three and Six Months Ended July 31, 2024 and 2023
Previous wording
Cash, cash equivalents, restricted cash and investments were$1.2 billion as of April 30, 2024.
Current wording
Cash, cash equivalents, restricted cash and investments were$1.0 billion as of July 31, 2024.
Previous wording
We believe that our market opportunity is large, and we plan to invest to support further growth. This includes optimizing our go-to-market efforts to focus on attractive growth opportunities and investing in research and development to drive product innovation and meet customer needs at scale. We also continue to assess and evaluate strategic acquisitions and investments. As we focus on infrastructure and technology that best serve our customers across industries, we will prioritize initiatives that accelerate our product capabilities and expand our product solutions.
Current wording
We believe that our market opportunity is large, and we plan to invest to support long-term growth. This includes optimizing our omnichannel go-to-market opportunities to target attractive growth opportunities balanced with a more efficient go-to-market cost structure, accelerating product innovation through the continued investment in research and development, and enhancing operational and financial efficiency to scale effectively. Additionally, we continue to evaluate strategic acquisitions and investments. By focusing on infrastructure and technology that best serve our diverse customer base, we are prioritizing initiatives that not only enhance our product capabilities but also expand our product solutions.
Previous wording
Our international revenue represented 28% of total revenue in the three months ended April 30, 2024 compared to 25% of total revenue in the three months ended April 30, 2023.
Current wording
Our international revenue represented 28% of total revenue in each of the three and six months ended July 31, 2024 compared to 26% of total revenue in each of the three and six months ended July 31, 2023.
Previous wording
The following discussion and analysis is for the three months ended April 30, 2024, compared to the same period in 2023, unless otherwise stated.
Current wording
The following discussion and analysis is for the three and six months ended July 31, 2024, compared to the same period in 2023, unless otherwise stated.
Previous wording
Subscription revenue increased by $52.2 million, or 8%, in the three months ended April 30, 2024. The increase was primarily due to the expansion of revenue from existing customers and the addition of new customers, as well as an increase in sales to our commercial and enterprise customers through our direct and indirect go-to-market initiatives. We continue to invest in a variety of customer programs and initiatives, which, along with expanded customer use cases, have helped increase our subscription revenue over time.
Current wording
Subscription revenue increased by $48.0 million, or 7%, in the three months ended July 31, 2024 and by $100.2 million, or 8%, in the six months ended July 31, 2024. The increase was primarily due to the expansion of revenue from existing customers and the addition of new customers, as well as an increase in sales to our commercial and enterprise customers through our direct and indirect go-to-market initiatives. We continue to invest in a variety of customer programs and initiatives, which, along with expanded customer use cases, have helped increase our subscription revenue over time.
Previous wording
Cost of subscription revenue increased by $17.7 million, or 16%, in the three months ended April 30, 2024, primarily driven by higher costs to support our growing customer base.
Current wording
Cost of subscription revenue increased by $16.2 million, or 14%, in the three months ended July 31, 2024 and by $33.8 million, or 15%, in the six months ended July 31, 2024, primarily driven by higher costs to support our growing customer base.
Previous wording
•$10.0 million in information technology costs, including a $7.6 million increase in hosting costs as we transition from on-premise storage to cloud storage to support future growth; and
Current wording
•$11.2 million in information technology costs, including a $7.7 million increase in hosting costs as we transition from co-located data centers to public cloud storage infrastructure to support future growth; and
Previous wording
Research and development expenses increased by $19.0 million, or 16%, in the three months ended April 30, 2024, primarily due to investments in our workforce to drive product innovation. Increases in the three months ended April 30, 2024, primarily consisted of $9.0 million in personnel costs due to annual salary increases in addition to rising headcount and an $8.2 million increase in stock-based compensation expense due to annual merit increases.
Current wording
Research and development expenses increased by $11.6 million, or 9%, in the three months ended July 31, 2024 and by $30.6 million, or 12%, in the six months ended July 31, 2024, primarily due to investments in our workforce to drive product innovation. In the three months ended July 31, 2024, stock-based compensation increased $8.3 million due to executive transitions, annual merit increases, and higher headcount. In the six months ended July 31, 2024, stock-based compensation expense increased $16.5 million due to annual merit increases and executive transitions, and personnel expense increased $11.0 million due to rising headcount.
Previous wording
Our principal sources of liquidity were cash, cash equivalents and investments, as well as cash generated from operations. As of April 30, 2024, we had $1.1 billion in cash and cash equivalents and short-term investments. We also had $139.1 millionin long-term investments that provide additional capital resources. We finance our operations primarily through payments by our customers for use of our product offerings and related services, and we have additional borrowing capacity available from our credit facility.
Current wording
Our principal sources of liquidity were cash, cash equivalents and investments, as well as cash generated from operations. As of July 31, 2024, we had $938.4 million in cash and cash equivalents and short-term investments. We also had $102.5 millionin long-term investments that provide additional capital resources. We finance our operations primarily through payments by our customers for use of our product offerings and related services, and we have additional borrowing capacity available from our credit facility.
Previous wording
In addition to our contractual commitments, our board of directors has authorized a stock repurchase program, which commenced in March 2022 and does not have an expiration date. During the three months ended April 30, 2024, we repurchased 2.5 million shares of common stock for $149.1 million through our stock repurchase program. Subsequently, in May 2024, our board of directors authorized an increase to our existing stock repurchase program for an additional amount of up to $1 billion of our common stock. The program has no minimum purchase and no mandated end date. The repurchase program may be suspended or discontinued at any time at our discretion. We expect that our existing sources of liquidity, including our existing cash, cash equivalents and investments, expected future operating cash flows, and borrowing capacity of our credit facility, will finance the repurchase of common stock at management’s discretion. The timing and amount of any repurchases of common stock will be determined by management based on its evaluation of market conditions and other factors.
Current wording
In addition to our contractual commitments, our board of directors has authorized a stock repurchase program, which commenced in March 2022 and does not have an expiration date. During the six months ended July 31, 2024, we repurchased 6.3 million shares of common stock for $350.8 million through our stock repurchase program. Included in the repurchase amount is the 1% excise tax as a result of the IRA. The program has no minimum purchase and no mandated end date. The repurchase program may be suspended or discontinued at any time at our discretion. We expect that our existing sources of liquidity, including our existing cash, cash equivalents and investments, expected future operating cash flows, and borrowing capacity of our credit facility, will finance the repurchase of common stock at management’s discretion. The timing and amount of any repurchases of common stock will be determined by management based on its evaluation of market conditions and other factors.
Previous wording
Cash provided by operating activities was $254.8 million in thethree months ended April 30, 2024. Our primary sources of cash provided by operating activities were billings and the related cash collections in addition to interest income due to higher interest rates. Our primary uses of cash include the payment of employee salaries and benefits, including the payment of termination benefits under the 2025 Restructuring Plan implemented in the first quarter of fiscal 2025, in addition to vendor payments.
Current wording
Cash provided by operating activities was $475.0 million in thesix months ended July 31, 2024. Our primary sources of cash provided by operating activities were billings and the related cash collections in addition to interest income due to higher interest rates. Our primary uses of cash include the payment of employee salaries and benefits, including the payment of termination benefits under the 2025 Restructuring Plan implemented in the first quarter of fiscal 2025, in addition to vendor payments. Additionally, in connection with the acquisition of Lexion, we agreed to pay$19.1 million in deferred compensation for key employees, which we paid into an escrow account.
Previous wording
Cash provided by operating activities was $233.6 million for thethree months ended April 30, 2023. Our primary sources of cash provided by operating activities were billings and the related cash collections in addition to interest income due to favorable interest rates. Our primary uses of cash include payment of employee salaries and benefits, including the payment of termination benefits under the 2024 Restructuring Plan implemented in the first quarter of fiscal 2024.
Current wording
Cash provided by operating activities was $444.7 million for thesix months ended July 31, 2023. Our primary sources of cash provided by operating activities were billings and the related cash collections in addition to interest income due to favorable interest rates. Our primary uses of cash include payment of employee salaries and benefits, including the payment of termination benefits under the 2024 Restructuring Plan implemented in the first quarter of fiscal 2024.
Previous wording
For the three months ended April 30, 2023, cash provided by investing activities of $7.8 million was primarily driven by $26.9 million net maturities of marketable securities, which was partially offset by $19.1 million in purchases of property and equipment as wecontinued to support operations at our data centers and invest in capitalized software development projects.
Current wording
For the six months ended July 31, 2024, netcash used in investing activities of $236.9 million was primarily driven by the acquisition of Lexion, which totaled$143.6 million, net of cash acquired in addition to$47.6 million net purchases of marketable securities and $45.0 million in purchases of property and equipment as we continued to support operations at our data centers and invest in capitalized software development projects.
Previous wording
For the three months ended April 30, 2024, netcash used in investing activities of $60.8 million was primarily driven by $37.5 million net purchases of marketable securities and $22.8 million in purchases of property and equipment as we continued to support operations at our data centers and invest in capitalized software development projects.
Current wording
For the six months ended July 31, 2023, cash used in investing activities of $56.9 million was primarily driven by $10.4 million net purchases of marketable securities in addition to $46.4 million in purchases of property and equipment as wecontinued to support operations at our data centers and invest in capitalized software development projects.
Previous wording
For the three months ended April 30, 2024, cash used in financing activities of $169.9 million was primarily driven by$149.1 million to repurchase 2.5 million shares of common stock at an average price of $58.78 per share through our stock repurchase program, and$20.8 million payments for tax withholding on share settlements, net of proceeds associated with equity plans.
Current wording
For the six months ended July 31, 2024, cash used in financing activities of $408.9 million was primarily driven by$349.1 million to repurchase 6.3 million shares of common stock at an average price of $55.02 per share through our stock repurchase program, and$59.8 million payments for tax withholding on share settlements, net of proceeds associated with equity plans.
Previous wording
For the three months ended April 30, 2023, cash used infinancing activities of $20.9 million was primarily driven by $40.5 million to repurchase 0.7 million shares of common stock at an average price of $57.06 per share through our stock repurchase program, and $4.1 million payments for tax withholding on share settlements, net of proceeds associated with equity plans. We also received$23.7 million in connection with the settlement of our Capped Calls in relation to our 2023 Notes.
Current wording
For the six months ended July 31, 2023, cash used infinancing activities of $90.3 million was primarily driven by $70.5 million to repurchase 1.3 million shares of common stock at an average price of $54.51 per share through our stock repurchase program, and $43.5 million payments for tax withholding on share settlements, net of proceeds associated with equity plans. We also received$23.7 million in connection with the settlement of our Capped Calls in relation to our 2023 Notes.
Previous wording
The critical accounting estimates, assumptions and judgments that we believe to have the most significant impact on our consolidated financial statements are revenue recognition, deferred contract acquisition costs, stock-based compensation, income taxes and loss contingencies.
Current wording
The critical accounting estimates, assumptions and judgments that we believe to have the most significant impact on our consolidated financial statements are revenue recognition, deferred contract acquisition costs, stock-based compensation, income taxes, loss contingencies, business combinations, and valuation of acquired intangible assets in business combinations.
Previous wording
There have been no material changes to our critical accounting policies and estimates as described in our fiscal 2024 Annual Report on Form 10-K.
Current wording
Except for the following, there have been no material changes to our critical accounting policies and estimates as described in our fiscal 2024 Annual Report on Form 10-K.
Previous wording
Reconciliation of income (loss) from operations and operating margin:
Current wording
Reconciliation of income from operations and operating margin:
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•$21.2 million in information technology costs, including a $15.3 million increase in hosting costs as we transition from co-located data centers to public cloud infrastructure to support future growth; and