DOCUSIGN, INC.
For the period ended Jan 31, 2025. Filed Mar 18, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 18, 2025
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-K
Period ended 2024-01-31; filed 2024-03-21.
0001261333-24-000045
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-01-31; filed 2025-03-18.
0001261333-25-000024
Item 7. 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 128 previous paragraphs and 122 current paragraphs.
70 unchanged; 26 reworded; 25 added; 31 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 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
Docusign solutions bring agreements to life, accelerating and simplifying the process of doing business. Docusign’s core offerings — our IAM platform, the world’s leading eSignature solution, and CLM solution — allow organizations to boost productivity, accelerate contract review cycles, and transform agreement data into insights and actions, while providing a better customer experience. For example, Docusign’s innovative IAM platform automates agreement workflows, uncovers actionable insights, and leverages AI capabilities, which enables organizations to create, commit to, and manage agreements, from virtually anywhere in the world, securely. As of January 31, 2025, nearly 1.7 million customers and more than a billion users worldwide utilize Docusign to accelerate and simplify the process of doing business.
Current report
We believe that our market opportunity is large, and we plan to invest to support long-term growth. We have three growth pillars in our long-term strategy. The first is to accelerate product innovation through research and development investments for our IAM platform. We aim to deliver category-leading value in the agreement management market while evolving into a platform company. This includes supporting a community of developers, builders, and partners to create new solutions that extend the capabilities of our IAM platform.
Current report
The second growth pillar is to strengthen our omnichannel go-to-market by refining our direct sales, partner, and digital e-commerce and self-service channels to better address customer needs. By optimizing these routes with a more efficient cost structure, we aim to target growth opportunities and expand our reach in the market.
Current report
Finally, our third growth pillar is to enhance operational and financial efficiency to scale effectively and sustainably. This includes prioritizing the infrastructure and technology investments that best serve our diverse customer base, as well as generating incremental revenue and growth with a lower cost profile. Additionally, we continue to evaluate strategic acquisitions and partnerships that align with our growth objectives and expand our product offerings.
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
As of January 31, 2025, we had a total of nearly 1.7 million customers, including over 260,000 small and medium-sized businesses (“SMBs”), mid-market companies, and large enterprise customers served by our direct sales force. We had a total of over 1.5 million customers and approximately 242,000 customers served by our direct sales force as of January 31, 2024.
Current report
Provision for (Benefit from) Income Taxes
Current report
Our income tax benefit consisted primarily of the release of a 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 January 31, 2025, 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 we will realize our U.S. federal and U.S. states deferred tax assets, 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 as they have not met the “more likely than not” realization criterion.
Current report
•$42.1 million in information technology costs, including a $33.8 million increase in hosting costs as we transition from co-located data centers to public cloud infrastructure to support future growth;
Current report
•$18.0 million in personnel costs and $6.7 million in stock-based compensation expense due to higher headcount; and
Current report
•$7.9 million in depreciation and amortization of our capitalized software projects and technology acquired in the Lexion acquisition.
Current report
Cost of professional services revenue decreased by $23.5 million, or 21%, in the year ended January 31, 2025, primarily driven by lower headcount resulting in lower personnel costs and stock-based compensation expense. In the year ended January 31, 2025, stock-based compensation expense decreased by $9.7 million, and personnel costs decreased by $7.7 million.
Current report
Sales and marketing expenses decreased $7.1 million, or 1%, in the year ended January 31, 2025, primarily due to a decrease in marketing and advertising costs due to shifts in line with our go-to-market strategy. Main drivers primarily consisted of:
Current report
•$12.4 million decrease in marketing and advertising costs, including a reduction in paid search, in line with cost efficiency measures; partially offset by
Current report
•$23.6 million in personnel costs due to higher headcount, including the Lexion acquisition; and
Current report
General and administrative expenses decreased $43.6 million, or 10%, in the year ended January 31, 2025. Decreases primarily consisted of:
Current report
•$23.9 million in professional fees and related expenses, including the receipt of insurance reimbursements for defense costs and the release of litigation related accruals in the current year; and
Current report
•$22.1 million in stock-based compensation expense mainly due to executive transitions that occurred in fiscal 2024 and lower headcount.
Current report
Interest income and other income, net decreased by $19.3 million in the year ended January 31, 2025. Decreases primarily consisted of $13.1 million decrease in interest income due to lower average investment balances.
Current report
Provision for (benefit from) Income Taxes
Current report
The change in income tax benefit for the year ended January 31, 2025 was primarily due to the release of $837.3 million of valuation allowance related to U.S. federal and certain state deferred tax assets.
Current report
In addition to our contractual commitments, our board of directors has authorized a stock repurchase program, which commenced in March 2022. During the year ended January 31, 2025, we repurchased 11.0 million shares of common stock for $685.0 million through our stock repurchase program. Included in the repurchase amount is the 1% excise taxas 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.
Current report
Valuation of Acquired Intangible Assets in 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 information obtained from the management of the acquired companies, our assessment of the information, and historical experience. 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.
Current report
We regularly assess the need for a valuation allowance against our deferred tax assets. In making this assessment, we weigh both positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and results of recent operations, to determine whether it is more likely than not that a deferred tax asset will be realized. This assessment requires significant judgement and is performed for each jurisdiction in which we operate. In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made.
Removed paragraphs (31)
Previous report
DocuSign offers products that address agreement workflows and digital transformation as part of its agreement management platform, enabling agreements to be signed electronically on a wide variety of devices, from virtually anywhere in the world, securely. DocuSign’s core product offerings, including the world’s leading electronic signature product, allow organizations to do business faster with less risk and at a lower cost, while providing a better experience for customers. As a result, over 1.5 million customers and more than a billion users worldwide utilize our platform to accelerate and simplify the process of doing business.
Previous report
We generally offer access to our products on a subscription basis with prices based on the functionality our customers require and the quantity of Envelopes provisioned. Similar to the physical envelopes historically used to mail paper documents, an Envelope is 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. For a number of use cases, such as buying a home, multiple Envelopes are used over the course of the process. To drive customer reach and adoption, we also offer for free certain limited-time or feature-constrained versions of our platform.
Previous report
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.
Previous report
We believe these collective activities will help us retain and expand within our current customers’ organizations and attract new customers.
Previous report
Retaining and Expanding Contracts with Existing Enterprise and Commercial Customers
Previous report
Many of our customers have increased spend with us as they have expanded their use of our offerings in both existing and new use cases across their front or back office operations. Our enterprise and commercial customers may start with just one use case and gradually implement additional use cases across their organization once they see the benefits of our products. Several of our largest enterprise customers have deployed our software platform for hundreds of use cases across their organizations. We believe there is significant expansion opportunity with our customers following their initial adoption of our software platform.
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 have a valuation allowance against our U.S. consolidated group and certain foreign deferred tax assets and will release the valuation allowance when there is sufficient positive evidence to support a conclusion that it is more likely than not the deferred tax assets will be realized. Depending on our operating results in the future, we may release the valuation allowance associated with the U.S. deferred tax assets within the next year. The timing and amount of the valuation allowance release could vary based on our assessment of all available evidence. Release of all, or a portion, of the valuation allowance would result in the recognition of certain deferred tax assets and may result in a material decrease to income tax expense for the period the release is recorded.
Previous report
•$13.3 million in operating costs to support our platform and revenue growth, including increases in hosting costs as well as processing and authentication costs;
Previous report
•$7.1 million due to higher information technology costs; and
Previous report
Sales and marketing expenses decreased $74.6 million, or 6%, in the year ended January 31, 2024, primarily driven by savings on personnel costs from the restructuring plans implemented during the third quarter of fiscal 2023 and the first quarter of fiscal 2024 as well as shifts in the allocation of resources for our go-to-market initiatives. Decreases primarily consisted of:
Previous report
•$31.5 million in marketing and advertising costs due to reduced spending on paid media in line with our go-to-market strategy and expansion of our self-serve experience; and
Previous report
•$34.2 million in stock-based compensation expense and $15.1 million in personnel costs due to annual merit increases; and
Previous report
•$11.9 million due to higher information technology costs to drive product innovation.
Previous report
General and administrative expenses increased $103.4 million, or 33%, in the year ended January 31, 2024, primarily due to investments in workforce and information technology. Increases primarily consisted of:
Previous report
•$55.6 million in stock-based compensation expense driven by charges due to executive new hire grants and transitions and annual merit increases;
Previous report
•$27.8 million in personnel costs driven by annual salary increases to align with the increasing cost of labor; and
Previous report
•$11.4 million due to higher information technology costs.
Previous report
Interest income and other income, net increased by $64.4 million in the year ended January 31, 2024. Increases primarily consisted of:
Previous report
•$44.3 million increase in interest income due to rising interest rates;
Previous report
•$8.8 million increase in accretion of investments purchased at a discount as the investments near maturity; and
Previous report
•$7.4 million reduction of our net foreign currency exchange loss due to the strengthening of the euro and British pound compared to the U.S. dollar.
Previous report
Provision for Income Taxes
Previous report
The provision for income taxes increased by $12.1 million in the year ended January 31, 2024 . The increase in the provision for income taxes in the current year is a result of higher pre-tax income and limitations on net operating losses allowed to reduce taxable income.
Previous report
Further details of these transactions are described in Note 7 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K.
Previous report
We were in compliance with all debt covenants at January 31, 2024.
Previous report
We believe our existing cash, cash equivalents and marketable securities will be sufficient to meet our working capital and capital expenditures needs over at least the next 12 months. While we generated positive cash flows from operations in the recent years, we have generated losses from operations in the past as reflected in our accumulated deficit of $1.7 billion as of January 31, 2024. We may continue to incur operating losses in the foreseeable future due to the investments we intend to make and may require additional capital resources to execute strategic initiatives to grow our business.
Previous report
Cash provided by operating activities was $506.8 million for the year ended January 31, 2023. Cash provided by operating activities increased slightly due to increases in collections of accounts receivable and higher revenues, partially offset by a decrease in amounts billed to customers and recognized as contract liabilities.
Previous report
Obligations and Commitments
Previous report
We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. Accordingly, the need to establish such allowance is assessed periodically by considering matters such as future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and results of recent operations. The evaluation of recoverability of the deferred tax assets requires that we weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified.
Previous report
(1)Represents the income tax adjustment using our estimated non-GAAP tax rate of 20%. Estimating a non-GAAP tax rate of 20%, the income tax effect of non-GAAP adjustments was $79.7 million for the year ended January 31, 2022.
Reworded paragraphs (26)
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 years ended January 31, 2024, 2023 and 2022. 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 with 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 years ended January 31, 2025, 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 offer subscriptions to our products to businesses at all scales, from global enterprise down to local, VSBs. We have an omnichannel go-to-market approach that consists of direct sales, partners to sell to our customers, and digital self-serve. We offer more than 900 active partner integrations with the applications that many of our customers already use so that they can create, commit, and manage agreements directly within these applications. We have a diverse customer base spanning across virtually all industries and around the world with no significant customer concentration. No single customer accounted for more than 10% of total revenue in any of the years presented.
Current wording
One pillar of our long-term strategy is to evolve our GTM channels from the historically direct sales-driven approach. We are currently investing in three routes to market, including direct sales, partner-assisted sales, and digital self-service purchasing. We expect that Docusign’s IAM platform will increasingly be offered across all three channels. We offer subscriptions to our products to businesses at all scales, from global enterprise down to local VSBs. We offer more than 1,000 active partner integrations with the applications that many of our customers already use so that they can create, commit, and manage agreements directly within these applications. We have a diverse customer base spanning across virtually all industries and around the world with no significant customer concentration. No single customer accounted for more than 10% of total revenue in any of the years presented.
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 1,060 customers as of January 31, 2024 compared to 1,080 customers as of January 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.
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 1,131 customers as of January 31, 2025 compared to 1,060 customers as of January 31, 2024. 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
Cash, cash equivalents, restricted cash and investments were $1.2 billion as of January 31, 2024.
Current wording
Cash, cash equivalents, restricted cash and investments were $1.1 billion as of January 31, 2025.
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 January 31, 2024, we had a total of over 1.5 million customers, including approximately 242,000 enterprise and commercial customers, compared to over 1.3 million customers and approximately 211,000 enterprise and commercial customers as of January 31, 2023. We define enterprise customers as companies generally included in the Global 2000. We define commercial customers to include both mid-market companies, which includes companies outside the Global 2000 that have greater than 250 employees, and medium-sized businesses (“SMBs”) which are companies with between 10 and 249 employees, in each case excluding any enterprise customers. We define VSBs as companies with fewer than 10 employees. We refer to total customers as all enterprises, commercial businesses and VSBs.
Current wording
We define enterprise customers as companies generally included in the Global 2000. We define mid-market customers as companies outside the Global 2000 that have more than 250 employees, and define SMBs as companies with between 10 and 249 employees, in each case excluding any enterprise customers. We define very small businesses (“VSBs”) as companies with fewer than 10 employees. VSBs are our most numerous group of customers, and we typically serve them through digital and self-service resources outside of our direct sales channels. We refer to total customers as all enterprises, mid-market, SMBs, and VSBs.
Previous wording
Our international revenue represented 26%, 25% and 23% of our total revenue in each of the years ended January 31, 2024, 2023, and 2022.
Current wording
Our international revenue represented 28%, 26% and 25% of our total revenue in each of the years ended January 31, 2025, 2024, and 2023.
Previous wording
Our operating expenses consist of sales and marketing, research and development, general and administrative, and restructuring and other related charges. As our revenues continue to increase, our operating expenses as a percentage of revenue may increase or decrease at different rates, driven by the timing of revenue recognition, the timing of hiring, our investments in growth and other factors.
Current wording
Our operating expenses consist of sales and marketing, research and development, general and administrative, and restructuring and other related charges. As our revenues continue to increase, our operating expenses as a percentage of revenue may increase or decrease at different rates, driven by the timing of revenue recognition, thetiming of hiring, our investments in growth and other factors.
Previous wording
Interest expense consists primarily of contractual interest expense and amortization of debt issuance costs on our Convertible Senior Notes due 2023 and our Convertible Senior Notes due 2024 (collectively, the “Notes”).
Current wording
In fiscal 2023 and 2024, interest expense consisted primarily of contractual interest expense and amortization of debt issuance costs on our Convertible Senior Notes due 2023 (the “2023 Notes”) and our Convertible Senior Notes due 2024 (the “2024 Notes”). The 2023 Notes and the 2024 Notes (collectively, the “Notes”) were extinguished during fiscal 2024. In fiscal 2025, interest expense consisted primarily of commitment fees on the undrawn balance of our revolving credit facility and the amortization of the associated issuance costs.
Previous wording
Subscription revenue increased $244.5 million, or 10%, in the year ended January 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.
Current wording
Subscription revenue increased $214.6 million, or 8%, in the year ended January 31, 2025. The increase was due to the expansion of revenue from existing customers, primarily within our commercial and enterprise segments and the addition of new customers, primarily from our digital channel. 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 $33.8 million, or 8%, in the year ended January 31, 2024, primarily driven by higher costs to support our growing customer base. Increases primarily consisted of:
Current wording
Cost of subscription revenue increased $72.5 million, or 16%, in the year ended January 31, 2025, primarily driven by higher costs to support our growing customer base. Increases primarily consisted of:
Previous wording
•$6.9 million in depreciation on our capitalized software projects.
Current wording
•$9.0 million increase in depreciation on our capitalized software projects.
Previous wording
Research and development expenses increased $58.9 million, or 12%, in the year ended January 31, 2024, primarily due to investments in our workforce and product innovation. Increases primarily consisted of:
Current wording
Research and development expenses increased $49.0 million, or 9%, in the year ended January 31, 2025, primarily due to investments in our workforce and product innovation. Increases primarily consisted of:
Previous wording
•$21.3 million in personnel costs and $18.5 million in stock-based compensation expense due to lower headcount, partially offset by higher commissions in line with higher sales and annual merit increases.
Current wording
•$20.0 million in stock-based compensation expense due to annual merit increases, and higher headcount, offset partially by lower executive costs.
Previous wording
Our principal sources of liquidity were cash, cash equivalents and investments as well as cash generated from operations. As of January 31, 2024, we had $1.0 billion in cash and cash equivalents and short-term investments. We also had $122.0 million in 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 through debt financing.
Current wording
Our principal sources of liquidity were cash, cash equivalents and investments as well as cash generated from operations. As of January 31, 2025, we had $963.5 million in cash and cash equivalents and short-term investments. We also had $134.1 million in 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 January 2021 we entered into a $500.0 million credit facility, as amended in May 2023, which may be increased by an additional $250.0 million subject to customary terms and conditions. The credit facility is available until January 11, 2026 to optimize our capital structure and strengthen our balance sheet. There were no outstanding borrowings under the credit facility as of January 31, 2024.
Current wording
In January 2021 we entered into a $500.0 million credit facility, as amended in May 2023, which may be increased by an additional $250.0 million subject to customary terms and conditions. The credit facility is available until January 11, 2026 to optimize our capital structure and strengthen our balance sheet. As of January 31, 2025, there were no outstanding borrowings under the credit facility, and we were in compliance with related covenants.
Previous wording
In September 2018, we issued and sold $575.0 million in aggregate principal amount of 0.5% Convertible Senior Notes due 2023 (the “2023 Notes”). In January 2021, we issued and sold $690.0 million in aggregate principal amount of 0% Convertible Senior Notes due 2024 (the “2024 Notes”). We fully settled the outstanding principal of the 2023 Notes and 2024 Notes and during the year ended January 31, 2024. We believe that our sources of liquidity, including our cash, cash equivalents and investments, and expected future operating cash flows, and borrowing capacity available to us from our credit facility, are adequate to meet the potential cash commitments for the foreseeable future, including upcoming maturities in the next 12 months related to our lease obligations.
Current wording
We believe that our sources of liquidity, including our cash, cash equivalents and investments, and expected future operating cash flows, and borrowing capacity available to us from our credit facility, are adequate to meet our potential cash commitments as well as meet our working capital and capital expenditure needs for the foreseeable future, including upcoming maturities of our contractual obligations over the next 12 months.
Previous wording
Our principal contractual obligations and commitments consist of operating leases, as well as noncancelable contractual commitments that primarily relate to cloud infrastructure support and sales and marketing activities. Refer to Note 7, Note 8 and Note 9 to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for more information.
Current wording
Our principal contractual obligations and commitments consist of obligations under operating leases, as well asnoncancelable contractual commitments that primarily relate to cloud infrastructure support and sales and marketing activities. Refer to Note 9 and Note 10 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K.
Previous wording
Cash provided by operating activities was $979.5 million for theyear ended January 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 favorable interest rates. Our primary uses of cash include the payment of employee salaries and benefits, including the payment of termination benefits under the 2024 Restructuring plan, in addition to vendor payments.
Current wording
Cash provided by operating activities was $979.5 million for the year ended January 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 favorable interest rates. Our primary uses of cash include the payment of employee salaries and benefits, including the payment of termination benefits under the restructuring plan authorized during fiscal 2024 (the “2024 Restructuring Plan”), in addition to vendor payments.
Previous wording
For the year ended January 31, 2023, cash used in investing activities of $191.2 million was primarily driven by $109.8 million net purchases of marketable securities and $77.7 million purchases of property and equipment as we continued to invest in data center build outs to support our growing operations and capitalized software development projects.
Current wording
For the year ended January 31, 2025, net cash used in investing activities of $312.9 million was primarily driven by the acquisition of Lexion, which totaled $143.6 million, net of acquired cash. Additionally, net purchases of marketable securities were $70.9 million, and purchases of property and equipment were $97.0 million as we continued to support operations at our data centers and invest in capitalized software development projects.
Previous wording
For the year ended January 31, 2024, cash provided by investing activities of $44.6 million was primarily driven by $137.6 million net maturities of marketable securities. The increase was partially offset by purchases of property and equipment of $92.4 million as we continue to support operations at our data centers and invest in capitalized software development projects.
Current wording
For the year ended January 31, 2024, net cash provided by investing activities of $44.6 million was primarily driven by $137.6 million net maturities of marketable securities. These inflows were partially offset by purchases of property and equipment of $92.4 million as we continued to support operations at our data centers and invest in capitalized software development projects.
Previous wording
For the year ended January 31, 2023, cash used in financing activities of $98.3 million was primarily driven by $63.0 million used to repurchase 1.1 million shares of common stock at an average of $55.52 per share through our stock repurchase program which commenced in fiscal 2023, and $35.2 million payments for tax withholding on share settlements, net of proceeds associated with our equity plans.
Current wording
For the year ended January 31, 2025, net cash used in financing activities of $838.8 million was primarily driven by $683.5 million to repurchase 11.0 million shares of common stock through our stock repurchase program and $155.3 million payments for tax withholding on share settlements, net of proceeds associated with our equity plans.
Previous wording
For the year ended January 31, 2024, cash used in financing activities of $946.0 million was primarily driven by the maturity of the Notes, stock repurchase program, and payments related to our equity plans. We fully repaid the 2023 Notes and 2024 Notes during fiscal 2024 for $727.0 million. We also used $145.5 million to repurchase 3.1 million shares of common stock at an average of $47.57 per share through our stock repurchase program. In addition, we made $97.2 million payments for tax withholding on share settlements, net of proceeds associated with our equity plans.These cash outflows were partially offset by $23.7 million received in connection with the settlement of our Capped Calls in relation to our 2023 Notes.
Current wording
For the year ended January 31, 2024, net cash used in financing activities of $946.0 million was primarily driven by the maturity of the Notes, our stock repurchase program, and payments related to our equity plans. We fully repaid the 2023 Notes and 2024 Notes during fiscal 2024 for $727.0 million. We also used $145.5 million to repurchase 3.1 million shares of common stock through our stock repurchase program. In addition, we made $97.2 million payments for tax withholding on share settlements, net of proceeds associated with our equity plans. These cash outflows were partially offset by $23.7 million received in connection with the settlement of capped call transactions in relation to our 2023 Notes.
Previous wording
We prepare our financial statements in accordance with generally accepted accounting principles (“GAAP”). Preparing these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.
Current wording
We prepare our financial statements in accordance with U.S. GAAP. Preparing these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.
Previous wording
The fair value of RSUs is determined by the fair value of our underlying common stock. From time to time, we grant RSUs that also include performance-based or market-based conditions. For RSUs granted with a market condition, we use a Monte Carlo option-pricing model to determine the fair value of the RSUs. The fair value of stock options and ESPP purchase rights are determined by the Black-Scholes option pricing model.
Current wording
From time to time, we grant RSUs that also include performance-based or market-based conditions. The fair value of RSUs, including those granted with a performance condition, is estimated on the date of grant based on the fair value of our underlying common stock. For RSUs with a performance condition, we assess the probability that such performance conditions will be met or achieved every reporting period. For RSUs granted with a market condition, we use a Monte Carlo option-pricing model to determine the fair value of the RSUs. The fair value of stock options and ESPP purchase rights is estimated on the date of grant using a Black-Scholes option pricing model.
Previous wording
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Current wording
To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Previous wording
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin and non-GAAP net income: We define these non-GAAP financial measures as the respective GAAP measures, excluding expenses related to stock-based compensation, employer payroll tax on employee stock transactions, amortization of acquisition-related intangibles, amortization of debt discount and issuance costs, acquisition-related expenses, fair value adjustments to strategic investments, executive transition costs, lease-related impairment and lease-related charges, restructuring and other related charges and, as applicable, other special items. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies and over multiple periods. In addition to these exclusions, we subtract an assumed provision for income taxes to calculate non-GAAP net income. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For fiscal 2023 and fiscal 2024, we have determined the projected non-GAAP tax rate to be 20%.
Current wording
Non-GAAP gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin and non-GAAP net income: We define these non-GAAP financial measures as the respective GAAP measures, excluding expenses related to stock-based compensation, employer payroll tax on employee stock transactions, amortization of acquisition-related intangibles, amortization of debt discount and issuance costs, acquisition-related expenses, fair value adjustments to strategic investments, executive transition costs, lease-related impairment and lease-related charges, restructuring and other related charges, as these costs are not reflective of ongoing operations, and, as applicable, other special items. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of the business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies and over multiple periods. In addition to these exclusions, we subtract an assumed provision for income taxes to calculate non-GAAP net income. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. For each of the years ended January 31, 2025, 2024 and 2023, we have determined the projected non-GAAP tax rate to be 20%.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Cash provided by operating activities was $1.0 billion for theyear ended January 31, 2025. Our primary sources of cash provided by operating activities were billings and the related cash collections in addition to interest income. Our primary uses of cash include the payment of employee salaries and benefits, including the payment of termination benefits under the restructuring plan authorized in fiscal 2025 (the “2025 Restructuring Plan”), 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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For RSUs with a performance condition, we assess the probability that such performance conditions will be met or achieved every reporting period.