Inside DocuSign’s Updated S-1: Rising Revenue, Falling Losses, Improved Cash Burn

Morning Report: DocuSign refiled its S-1 this week. Here’s what you need to know.

Impending IPO DocuSign refiled its S-1 with the SEC this week, filling the market in on its calendar 2017 performance. The information was notably missing from its prior document, which only showed performance through January of last year due to the company’s fiscal calendar.

The new doc, however, is the usual treasure trove for financial dorks. It’s got all the guts and bolts you could hope for from a company that has been around as long as DocuSign has.

But, since it’s Friday and we all need som help, here are the critical notes:

• Revenue Up: DocuSign’s top line grew from $381.5 million to $518.5 million in its most recent fiscal year, expansion of around 36 percent. That seems a solid figure given the scale of DocuSign’s business. It’s not the fastest number we’ve seen, mind, but the results indicate that DocuSign has kept growing its subscription business (93 percent of its revenue in the most recent fiscal year) without, as we’ll shortly see, spending all the money in the world.
• Losses Down: The firm’s GAAP net loss fell from $115.4 million in its fiscal year ending January 31, 2017, to $52.3 million in its most recent fiscal year. That’s a solid ramp down, as revenue grew. Here’s evidence that you can expand a SaaS business at scale while losing less money over time. (And, just under $30 million of that $52.3 million figure stemmed from share-based compensation costs.)
• Cash Burn Down: DocuSign’s free cash flow (operating cash flow + investing cash flow + financing cash flow) rose from -$48.1 million in its fiscal year ending early 2017, to positive $36.1 million in its most recent fiscal year. Operating cash flow grew to nearly $55 million during the same period, up from -$4.8 million the year before.
• Recur This: Here’s a kinda weird one. DocuSign’s dollar-based net retention rate (you can read its definition on page 64 if you want to vet its strictness) of 115 percent was flat from the year prior — again. Indeed, for every fiscal year that we have on record, DocuSign put up a 115 percent figure for this metric.

So, there you go. That’s the highest possible level. We’ll have some more notes when it prices. In the meantime, stay out of the rain!

Illustration Credit: Li Anne Dias

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