DocuSign Inc at UBS Global TMT Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Great. Well, you obviously put up a very strong 3Q number, and I'd love to dig in a little bit to the results. Maybe, Dan, just to start off, it feels like this quarter was again led by strength on the eSignature side. And I guess I wanted to ask you a question in terms of where we are on the penetration of eSignature. It's a tough one for all of us on the outside to get to. I don't know how you can describe it, whether it's all the potential transactions that could be electronically signed in your largest customers, what portion currently are. Maybe just some sense for here today after several years of amazing success where we are on eSignature penetration to put these results in context.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Yes. It's certainly true when at least, Dan, I do checks. I sometimes come across some younger, call them, Silicon Valley companies that tell me they're relatively full in terms of their DocuSign use, that they're already sort of wall-to-wall. But I think what you're getting at it is there's a long tail of larger organizations that are early enough such that the blended growth rate is still relatively high and the penetration rates relatively low.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Great. That certainly sounds like it. So maybe just using that as a springboard to talk a little bit about the 3Q results. I think one thing that gets people intrigued -- and I know you took 1 or 2 questions about this on the call. So Cynthia, maybe you could chime in as well. And that has to do with the unusual volume gains that DocuSign has experienced since the COVID crisis hit in March such that they're running above their minimum, so to speak, and they're forced to upsize or accelerate their contracts. Dan or Cynthia, can you talk a little bit about how big a phenomenon that was for billings in the third quarter? And then I'm curious as we look into the fourth quarter, one would think that that's -- given that it's typically a larger renewal quarter, but that phenomenon should be helpful in 4Q as well.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. That makes sense. Thank you for that. And maybe another thing that stood out, at least to me from the recent quarter, was the international growth. If I recall, it was 77%, and that was an acceleration. So maybe Dan or Cynthia, you can talk a little bit about what's driving that besides the obvious, which is that Mike Sheridan is doing a bang-up job leading that effort.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : So Dan, it sounds like the acceleration, if I'm interpreting you correctly, had more to do with DocuSign itself executing on the opportunity rather than any demand changes or regulatory changes in those end markets altering and becoming more favorable to DocuSign, right? So it sounds like more of a DocuSign-driven success here in the last few quarters.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Okay. Great. Moving from the international opportunity, I'd love to talk about one of my favorite subjects, and that's the broader Agreement Cloud and the CLM suite, which I happen to think is one of the sort of undercovered, maybe underappreciated, parts of the DocuSign story. So maybe, Dan, I know you always touch on this to some extent on the earnings call, but maybe you could take a minute to describe the traction that you're seeing in terms of customer inquiries and RFPs, deal wins on the broader Agreement Cloud upsell opportunity.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : That's -- to me, that's super exciting. And maybe, Dan, I'll press a little bit more on both the sales and the product side of the broader Agreement Cloud. On the sales execution, you touched on a little bit that the ROI is different, the implementation time frame is different. But is the audience for this, or the buyers different such that you needed to make some either tactical or perhaps even more substantive changes to the way that your enterprise sales force is organized to execute on that upsell? I'd love to hear a little color on the sales motion and how it's different versus a "more traditional eSignature sale." REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 07, 2020 / 5:05PM, DOCU.OQ - DocuSign Inc at UBS Global TMT Conference (Virtual)

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. And what about on the product side, Dan? I know you've built it out fairly well. At least when I talk to customers and I ask them if there's anything missing from the Agreement Cloud that if they could advise you to acquire, they would. The most often thing I hear is that they'd love more AI search capabilities. And then you went out and bought Seal, and it feels like you addressed that need. But I'm just wondering, post the Seal deal, whether there's any other element that you would envision as being a terrific place to expand the suite.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Yes. And Dan, maybe just sticking to the product just more broadly across both the CLM side and the eSignature side. Are there 1 or 2 relatively new products? You mentioned even in the short conversations, so far, Notary and Analyzer. Are there 1 or 2 that you think could be, let's say, needle movers in fiscal '22 or fiscal '23? What are you most excited about as having an impact on the business as we look out into next year?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. But maybe qualitatively, the answer to the question of when CLM could be needle moving, if I am interpreting you correctly, Dan, it could be next year. You're not going to disclose it, but it could make the difference between, as you put it, a great year and a good year if CLM really takes off as you started to see towards the tail end of 3Q, correct?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Maybe one more on the... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 07, 2020 / 5:05PM, DOCU.OQ - DocuSign Inc at UBS Global TMT Conference (Virtual)

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Right. So maybe this is a good segue to a question, Dan, that I know you've taken since the company went public, and that's the competition with Adobe. It seems to me that to the extent that -- to Cynthia's point that you build out successfully the CLM suite and it's more strategic, it actually ends up providing a tailwind to the sale of your core eSignature. Do you view this broader suite as a competitive differentiator relative to Adobe that obviously has their own document cloud, but perhaps not as strong a pure CLM suite as you have?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : That's interesting. I wasn't aware of that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 07, 2020 / 5:05PM, DOCU.OQ - DocuSign Inc at UBS Global TMT Conference (Virtual)

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. And maybe, Dan, just sticking on the competition front, whereas Adobe might be your closest rival on the eSignature side, you do have a couple of more boutique firms that you compete with on the CLM side, at least when I talk to some of your customers that are evaluating you against the competition. The 2 that I most often hear are Icertis and Conga, and we've actually got the CEO of one of those, too, at the UBS conference to speak. Do you mind just taking a moment to describe how DocuSign differs from those 2 vendors on the CLM side?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Okay. That's actually super helpful, Dan. And maybe just in our last 5 or so minutes, I'd love to ask you and Cynthia some questions about next year. I'll keep it very qualitative because, Cynthia, I know you're going to provide more quantitative guidance on your next fourth quarter call. But Dan, to the extent that a lot of investors view DocuSign as being a big COVID beneficiary, maybe this is unfair, but maybe there's a perception that you've got a slightly better crystal ball about when the world "returns to normal," when a recovery scenario starts occurring, when sales reps go back into the office. What's the internal DocuSign view you, Cynthia and the Board about when there will be some return to normal based on all the evidence you have? Maybe you're guessing just like us, Dan. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 07, 2020 / 5:05PM, DOCU.OQ - DocuSign Inc at UBS Global TMT Conference (Virtual)

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Right.

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : That sounds pretty bullish, Dan. Because if in the third quarter, there was somewhat less of the frenzy that you had in the March through September time frame, but you still put up 60-plus percent billings growth, that speaks to the secular opportunities in your business. That's amazing. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 07, 2020 / 5:05PM, DOCU.OQ - DocuSign Inc at UBS Global TMT Conference (Virtual) So maybe we'll just finish up with one more. Cynthia, if you could take Dan's comments about a return to the office and perhaps enterprise sales rep getting back into more of a flying, dining motion. How do you factor that return to a more normal environment into your margin outlook for next year? I take it that there should be some uplift from a return to more normal sales motion, perhaps offset by investments? How are you framing that post-COVID change in sales expenses as the travel portion begins to pick up a little bit?

Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst : Got it. Okay. Well, that's a great place to end. I thought that was a fantastic 35, 40-minute summary of what you're seeing out there in the business. So Dan, Cynthia and Annie, thanks so much for spending time with us and educating us and investors about DocuSign.