The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst
: Cynthia, I think everybody just wants to stress test the back half billings guidance, just to arrive at a viewpoint as to how conservative
it is. So I think your second half billings guidance implies $1.31 billion or call it, roughly $650 million in billings per quarter, 3Q and
4Q. I'd just love to ask you what assumptions you're baking into that guidance? What you're assuming in terms of the continuation
of the customer hesitation that Dan just flagged, what you're assuming in terms of sales productivity improvements in the third and
fourth quarter, just so that we can get an understanding of how conservative it is. Appreciate any color.
Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst
: Okay. I just figured we might as well get the bad news out now. Isn't that kind of the mechanics of how the business works?
Question: Rishi Nitya Jaluria - RBC Capital Markets, Research Division - Analyst
: I got 2 here. One, I want to really understand the mechanics of the Q2 billings guidance, right? Because if we look at it, not only is it
optically really disappointing at 1% year-over-year, but you're talking about effectively adding $0 in deferred revenue from Q1 to
Q2. And I mean, I guess what assumptions are baked into that? I don't think I've ever seen that historically happen in your business
from a Q1 to Q2 where you're adding $0 of net new DR. Was there like some pull-forward business from Q2 that landed in Q1? Or
what's going on in that guidance? Maybe if you can just help us better understand that. And then I've got a follow-up.
Question: Rishi Nitya Jaluria - RBC Capital Markets, Research Division - Analyst
: Okay. Cynthia, point taken, I get it. But like unless there was an actual pull forward of business from Q2 to Q1, right? The Q2 billings
is a guidance you're giving us, right? It's not a number that's actually happened, and we can say things move around. And I guess
I'm still struggling to understand that, but I'll leave that alone. I want to turn to geographies, right?
So international growth slowed down. That itself is disappointing. But then if I look at the U.S. side of the business, that grew 1% --
sorry, 0.6% sequentially from Q4 to Q1, and yet you're talking about being underpenetrated in the market opportunity. Is this just
the onetime use cases churning off? Is it -- or what's leading that? Because we're effectively on the edge of U.S. revenue starting to
decline sequentially, right? We're not that far away from that, especially because revenue is a lagging indicator and macro is only
going to get worse from here, right, not better. Just help me understand what's going on and how I should be reading that number?
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JUNE 09, 2022 / 8:30PM, DOCU.OQ - Q1 2023 DocuSign Inc Earnings Call
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