DOCUSIGN, INC.

Previous wording

We generate substantially all our revenue from sales of subscriptions, which accounted for 98% of our revenue in the three months ended April 30, 2025, and 97% of our revenue in the three months ended April 30, 2024. 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 98% of our revenue in each of the three and six months ended July 31, 2025, and 97% of our revenue in each of the three and six months ended July 31, 2024. 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 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 three months ended April 30, 2025 and 2024. We anticipate a greater focus on investing in customer success through our professional services offered by partners. 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 three and six months ended July 31, 2025 and 2024. We anticipate a greater focus on investing in customer success through our professional services offered by partners. 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 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 1,123 customers as of April 30, 2025 compared to 1,059 customers as of April 30, 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.

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 1,137 customers as of July 31, 2025 compared to 1,066 customers as of July 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

Financial Results for the Three Months Ended April 30, 2025 and 2024

Current wording

Financial Results for the Three and Six Months Ended July 31, 2025 and 2024

Previous wording

As of April 30, 2025, we had a total of over 1.7 million customers, including approximately 268,000 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, including approximately 248,000 customers served by our direct sales force as of April 30, 2024.

Current wording

As of July 31, 2025, we had a total of over 1.7 million customers, including over 271,000 small and medium-sized businesses (“SMBs”), mid-market companies, and large enterprise customers served by our direct sales force. We had approximately 1.6 million customers, including approximately 253,000 customers served by our direct sales force as of July 31, 2024.

Previous wording

International revenue increased 10% in the three months ended April 30, 2025, compared to the three months ended April 30, 2024. Additionally, our international revenue represented 28% of our total revenue in each of the three month periods ended April 30, 2025 and April 30, 2024.

Current wording

International revenue increased by 12% in the six months ended July 31, 2025, compared to the six months ended July 31, 2024. Additionally, our international revenue represented 29% of our total revenue in each of the three and six month periods ended July 31, 2025 compared to 28% in each of thethree and six month periods ended July 31, 2024.

Previous wording

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 April 30, 2025, we continue to maintain valuation allowances related to certain federal deferred tax assets subject to limitation on use and our California and Ireland deferred tax assets.

Current wording

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 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 released $837.7 million of our valuation allowance as a discrete tax benefit during the three and six months ended July 31, 2024. As of July 31, 2025, we continue to maintain valuation allowances related to certain federal deferred tax assets subject to limitation on use and our California and Ireland deferred tax assets. We will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis.

Previous wording

The following discussion and analysis is for the three months ended April 30, 2025, compared to the same period in 2024, unless otherwise stated.

Current wording

The following discussion and analysis is for the three and six months ended July 31, 2025, compared to the same period in 2024, unless otherwise stated.

Previous wording

Subscription revenue increased by $54.7 million, or 8%, in the three months ended April 30, 2025. The increase was primarily due to the expansion of revenue from our commercial and enterprise accounts, as well as 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.

Current wording

Subscription revenue increased by $67.0 million, or 9%, in the three months ended July 31, 2025 and by $121.7 million, or 9%, in the six months ended July 31, 2025. The increase was primarily due to the expansion of revenue from our commercial and enterprise accounts, as well as 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 by $10.7 million, or 8%, in the three months ended April 30, 2025, primarily driven by higher costs to support our growing customer base. The increase in the three months ended April 30, 2025, primarily consisted of a $6.8 million increase in information technology costs, including a $5.3 million increase in hosting costs as we transition from co-located data centers to public cloud storage infrastructure to support future growth of our platform, including IAM.

Current wording

In both the three months and six months ended July 31, 2025, information technology costs, particularly hosting costs, increased as we continued our transition from co-located data centers to public cloud storage infrastructure to support future growth of our platform, including IAM. In the three months ended July 31, 2025, information technology costs increased by $7.7 million. In the six months ended July 31, 2025, information technology costs increased by $14.5 million. Additionally, in the six months ended July 31, 2025, partner and reseller fees and merchant processing fees increased by $5.5 million.

Previous wording

Sales and marketing expenses increased by $14.8 million, or 5%, in the three months ended April 30, 2025, primarily due to investments in our workforce. In the three months ended April 30, 2025, personnel costs increased $8.3 million primarily due to an increase in commissions as we continue our focus on expansion and driving customer acquisition.

Current wording

Sales and marketing expenses increased by $18.0 million, or 6%, in the three months ended July 31, 2025 and by $32.8 million, or 6%, in the six months ended July 31, 2025, primarily due to investments in our workforce.

Previous wording

Research and development expenses increased by $25.1 million, or 19%, in the three months ended April 30, 2025, primarily due to investments in our workforce to support product innovation, including acquisition of Lexion.

Current wording

Research and development expenses increased by $22.1 million, or 15%, in the three months ended July 31, 2025 and by $47.2 million, or 17%, in the six months ended July 31, 2025, primarily due to investments in our workforce to support product innovation, including our acquisition of Lexion.

Previous wording

•$12.1 million in personnel expense due to higher headcount; and

Current wording

•$12.8 million in personnel expense due to higher headcount; and

Previous wording

•$10.2 million in stock-based compensation due to annual merit increases and executive new hire grants.

Current wording

•$8.4 million in stock-based compensation due to annual merit increases and higher headcount.

Previous wording

General and administrative expenses decreased by $2.2 million, or 2%, in the three months ended April 30, 2025, primarily due to reduced litigation related expenses and receipt of insurance reimbursements for defense costs in the current year.

Current wording

In the three months ended July 31, 2025, the increase primarily consisted of $8.6 million in professional fees and related expenses due to reduced litigation related expenses and receipt of insurance reimbursements for defense costs in the prior year.

Previous wording

Restructuring and other related charges were $29.1 million in the three months ended April 30, 2024, due to the implementation of the 2025 Restructuring Plan. Restructuring costs consisted primarily of employee termination benefits, and the majority of costs were recognized in the first quarter of fiscal 2025.

Current wording

Restructuring and other related charges were $29.7 million in the six months ended July 31, 2024, due to the implementation of the 2025 Restructuring Plan. Restructuring costs consisted primarily of employee termination benefits, and the majority of costs were recognized in the first quarter of fiscal 2025.

Previous wording

Our principal sources of liquidity were cash, cash equivalents and investments, as well as cash generated from operations. As of April 30, 2025, we had $948.7 million in cash and cash equivalents and short-term investments. We also had $160.1 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, 2025, we had $844.5 million in cash and cash equivalents and short-term investments. We also had $208.9 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 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. As of April 30, 2025, there were no outstanding borrowings under this credit facility, and we were in compliance with related covenants. Subsequently, in May 2025, we entered into a new credit agreement with a syndicate of banks, which superseded and replaced the Credit Facility, and provides for a revolving credit facility in the aggregate principal amount of $750.0 million, which may be increased by an additional $250.0 million subject to customary terms and conditions. The credit facility matures in May 2030, and is available to optimize our capital structure and strengthen our balance sheet. Additional information has been included in Note 6 and Note 13 to the Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

In May 2025, we entered into an agreement with a syndicate of banks, which provides for a revolving credit facility in the aggregate principal amount of $750.0 million and may be increased by an additional $250.0 million subject to customary terms and conditions. The Credit Facility superseded and replaced the revolving credit facility that we previously entered into in January 2021. As of July 31, 2025, there were no outstanding borrowings under the Credit Facility, and we were in compliance with related covenants. The Credit Facility matures in May 2030 and is available to optimize our capital structure and strengthen our balance sheet. Additional information has been included in Note 6 to the Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

In addition to our contractual commitments, our board of directors has authorized a stock repurchase program, which commenced in March 2022. During the three months ended April 30, 2025, we repurchased 2.3 million shares of common stock for $183.4 million through our stock repurchase program. 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 the 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. During the six months ended July 31, 2025, we repurchased 4.9 million shares of common stock for $384.9 million through our stock repurchase program. 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 the 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 $251.4 million in thethree months ended April 30, 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 in addition to vendor payments.

Current wording

Cash provided by operating activities was $497.5 million in thesix months ended July 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 in addition to vendor payments.

Previous wording

Cash provided by operating activities was $254.8 million for 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. Our primary uses of cash include payment of employee salaries and benefits, including the payment of termination benefits under the 2025 Restructuring Plan implemented in the first quarter of fiscal 2024, in addition to vendor payments.

Current wording

Cash provided by operating activities was $475.0 million for 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. Our primary uses of cash include 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

For the three months ended April 30, 2025, netcash used in investing activities of $24.9 million was primarily driven by $23.6 million in purchases of property and equipment as we continued to invest in capitalized software development projects and to support operations at our data centers.

Current wording

For the six months ended July 31, 2025, netcash used in investing activities of $55.4 million was primarily driven by $52.0 million in purchases of property and equipment as we continued to invest in capitalized software development projects and to support operations at our data centers.

Previous wording

For the three months ended April 30, 2024, net cash 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 wecontinued to support the operations at our data centers and invest in capitalized software development projects.

Current wording

For the six months ended July 31, 2024, net cash 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 wecontinued to support operations at our data centers and invest in capitalized software development projects.

Previous wording

For the three months ended April 30, 2025, net cash used in financing activities of $223.5 million was primarily driven by$183.4 million to repurchase 2.3 million shares of common stock through our stock repurchase program and$40.1 million payments for tax withholding on share settlements, net of proceeds associated with equity plans.

Current wording

For the six months ended July 31, 2025, net cash used in financing activities of $496.9 million was primarily driven by$384.9 million to repurchase 4.9 million shares of common stock through our stock repurchase program and$108.8 million payments for tax withholding on share settlements, net of proceeds associated with equity plans.

Previous wording

For the three months ended April 30, 2024, net cash used infinancing activities of $169.9 million was primarily driven by$149.1 million to repurchase 2.5 million shares of common stock 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, net cash used infinancing activities of $408.9 million was primarily driven by$349.1 millionto repurchase 6.3 million shares of common stock 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

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, acquisition-related expenses, 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 2025 and fiscal 2026, 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, acquisition-related expenses, 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. We have determined the projected non-GAAP tax rate to be 20% for fiscal 2025 and 21% for fiscal 2026 due to the impact of the OBBBA.

Previous wording

Billings: We define billings as total revenues plus the change in our contract liabilities and refund liability less contract assets and unbilled accounts receivable in a given period. Billings reflects sales to new customers plus subscription renewals and additional sales to existing customers. Only amounts invoiced to a customer in a given period are included in billings. We believe billings can be used to measure our periodic performance, when taking into consideration the timing aspects of customer renewals, which represents a large component of our business. Given that most of our customers pay in annual installments one year in advance, but we typically recognize a majority of the related revenue ratably over time, we use billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers.

Current wording

Billings: We define billings as total revenues plus the change in our contract liabilities and refund liability less contract assets and unbilled accounts receivable in a given period. Billings reflects sales to new customers plus subscription renewals and additional sales to existing customers. Only amounts invoiced to a customer in a given period are included in billings. We believe billings can be used to measure our periodic performance, when taking into consideration the timing aspects of customer renewals, which represent a large component of our business. Given that most of our customers pay in annual installments one year in advance, but we typically recognize a majority of the related revenue ratably over time, we use billings to measure and monitor our ability to provide our business with the working capital generated by upfront payments from our customers.