DocuSign, Inc. (NASDAQ:DOCU) Q1 2024 Earnings Call Transcript

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Shebly Seyrafi: Okay. As a follow-up, the product revenue or innovation that you alluded to, is that referring to the three new releases, the Web Forms, highly regulated markets and ID? Or — and add some additional products perhaps later this year? Just elaborate on what you mean by the product innovation.

Allan Thygesen: Yes. I think overall, my goal has been to dramatically improve our pace of innovation and pace of product releases. And so, I think we did a good job of that in Q1, and there’s more to come here in Q2. In fact, we’ll share some parts of our Q2 releases next week at our user conference. So, I look at that at every quarter, you’ll see pretty meaningful new functionality across our vision of delivering agreement workflow. Some of the things that I’m most excited about that we intend to deliver this fiscal year, but a little further out, include things like searching across your repository of agreements. As you can imagine, an incredibly important functionality. No one really delivers that today. I think we’re planning to do that before the end of the year.

Another example of something more evocative and enabling future growth of the categories, we call orchestration, which basically enables you to pick components of the DocuSign suite and any third-party app that we interface with and combine them in ways that are custom for your organization and workflow. We’ve had a lot of increase for that over the years. No one has ever delivered that in the agreement space, and we intend to do that. So those are examples of things that are more evocative and could unlock the full potential of the category.

Shebly Seyrafi: Thank you.

Operator: Thank you. Our next question comes from Rob Owens with Piper Sandler. Please proceed with your question.

Rob Owens: Great, and thanks for taking my question. I think building on Brent’s question a little earlier, I just wanted to better understand the pace of spend as we move throughout the year, because I guess 90 days ago, you had an operating margin that was at the low end, ramping throughout the year, and now, the inverse is happening where you have the high watermark in Q1 and incremental spend. So, just trying to understand, was there a change relative to spend trying to accelerate incremental products or what’s going on from that perspective?

Cynthia Gaylor: Yes. I think in Q1, I mean, again, it’s a good observation. I think in Q1, we saw lower spend across categories. So, we just got a slower start to the year. So part of it was across the investment areas and the key priorities and higher net new hiring kind of got off to a slower start. However, we expect that to kind of ramp as we move through the year. So we’d expect Q1 to be the high watermark, Q2 to come down slightly, and then Q3 and Q4 to moderate in the low 20s would be what we would expect. And so the year will come up 1 point, but the overall spend, again, in the run rate and the bow wave will be in line with our expectation coming into the year across the AOP.

Rob Owens: And I guess, secondarily, could you talk about pricing and what you’re seeing in the more tradition e-signature market throughout the various lenses, I guess, of where you’re at in SMB and what enterprise looks like? Thanks.

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