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Docusign CEO on Q4 earnings: ‘we’re bullish that the growth will continue’

Yahoo Finance’s Julie Hyman, Myles Udland, and Brian Sozzi speak with Docusign CEO Dan Springer about the company’s better than expected Q4 earnings report, and 2021 outlook.

Video Transcript

MYLES UDLAND: Let's take a look at shares of DocuSign. The company out reporting a better-than-expected quarter on the top as well as the bottom line. Stock under a little bit of pressure this morning though, as the company's guidance, again, projecting a slowdown as we get into a more normal environment.

Joining us now to discuss everything going on with DocuSign is the company's CEO, Dan Springer. Dan, thanks for coming on the show once again. I want to start with that guidance and the way that you guys are kind of managing through what, from my vantage point, looks like sort of a return to normal-- a normal growth trajectory, given where you guys were pre-pandemic and how you're thinking about that kind of dynamic internally.

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DAN SPRINGER: Yeah. Absolutely. We're quite pleased, as, you know, you mentioned, with the growth for last year. You know, fiscal 2021 for us was a fantastic year. We grew the top line about 50% from about a billion to about a billion and a half.

And we actually gave guidance that we grow that to about $2 billion this year. So continued strong growth. And you know, we do believe that the pandemic to turbo charge some businesses. And we're-- and the kind of company that benefits to some extent when COVID occurred and people needed to really be part of it what we like to call the anywhere economy.

And at the same time, we think coming out of the pandemic, which we hope, you know, will happen in the quarters, if not the months ahead, we don't think people are going back. People are going to stay using the benefits of things like electronic signature, our core product offering. And that's why we're bullish that the growth's going to continue.

BRIAN SOZZI: So, Dan, fourth quarter, we were all pretty much locked in a lock in our homes still, not in the office. The first quarter's shaping up to be a little different. Have you seen any change in demand in bookings in February and March?

DAN SPRINGER: You know, we have not. Yeah, at this point, we are still seeing that same kind of robust demand for the, you know, core DocuSign services. It's one thing that I think is a nuance. We've talked in the past about signature versus some of the other DocuSign Agreement Cloud, products that we have.

And in the pandemic, we saw as sort of an acceleration of people needing electronic signature because it allowed people, you know, again, to participate in that and that anywhere economy, but it also created the opportunity for people to move away from some of the things like CLM, Contract Lifecycle Management, where there's sort of a longer lead time. There's a little more professional services to sort of do an implementation.

And now we see that coming back. So now as we see that demand profile building, which is very strong for us in Q1, we're seeing a shift where it's not just a signature where's the demand's occurring, but also in the broader DocuSign agreement could.

JULIE HYMAN: Dan, it's Julie here. It's good to see you. You know, I suspect I know the answer to this, but I'm curious your take. A lot of the things that we've talked about as moving online during the pandemic, we've talked about some of that behavior reversing, right, once we get back and out and about again. Once people go digital in terms of documents, do they ever go back-- I mean, like, is this a behavior that ever reverses in your experience where a company might say, no, we're going to go back to paper? I imagine that doesn't really happen.

DAN SPRINGER: We haven't seen that happen. We don't think people will go back. And the way we look at it is a lot of people, particularly in this last year, needed to leverage things like electronic signature 'cause they couldn't go into their office and see people, and they couldn't send sales contracts to someone else's office to sign because no one was in that office. So they realized they needed to have electronic signature.

But we find once they see the benefit, once they see the cost savings, and the time savings, which are dramatic, they now have the opportunity to make a choice. And we don't see people saying, I want to go to the more expensive, more cumbersome, worse-for-the-environment sort of model of shipping documents around the world and cutting down trees to print out those documents. So we're pretty confident we won't see people go back.

BRIAN SOZZI: Dan, March 24, pretty big investor day coming up for you. What are you going to share? Are you going to share five-year targets? Are you gonna share how are you going to allocate your cash? What's on tap?

DAN SPRINGER: I think the primary thing people really want to see is around the product roadmap. And they want to see what we're going to be doing with things like notary. We see investors saying, can you take us deeper into the size of that opportunity and the approach between both the first party and the third party notary? So there'll be a lot of that product innovation.

I think they want to see what we're doing with our advanced analytics capability. You mentioned future M&A. I think they want to hear, hey, you have the Spring CEM, the Seal-- those kinds of deals-- has that really created the opportunity you guys believe you were going to get? And then I do think you're right. People are going to want to say, what's that look like going forward?

You've got a big balance sheet. At the beginning of this year, we did a real nice financing to sort of stop any dilution from occurring from a previous convert, but also create that opportunity in-room if we were to see some additional sort of tuck-in opportunities. And of course, we have a very strong currency, you know, in our stock as well. So I think those are probably the areas that investors are most interested in. And we'll do our best in that analyst day to give them all that information.

MYLES UDLAND: You know, Dan, finally, I want to ask a little more of a fun question. I'm curious if you guys are thinking at all about NFTs and about that kind of new way that people are interested in, you know, just, I guess, digital agreements that are non-replicable? And really the way the public is now thinking about this, I find fascinating from an investment perspective. I don't know if you guys have thought about it or talked about it at all, but it would seem from my vantage, kind of apropo to sort of the business that you've carved out.

DAN SPRINGER: Yeah. It's an interesting question. I tell you, only on "Yahoo Finance" does someone start off by saying, I have a really fun question, and then it's NFTs. So I really like that you guys got the focus at the right place, and you guys are really committed to what you do. Strangely enough, only at places like DocuSign, but we also think that's a fun question. So I guess, we're just as nerdy as you are.

But I think the answer is, we really believe that we're gonna have a dramatic change in how people think about digital assets. We see already this phenomenon-- tell you about our business a little bit and how it might, you know, relate to that a lot of people didn't think about a way to manage their contracts in a digital way, having a digital repository. They didn't think about that until they had e-signature.

Now they had all of their agreements being signed digitally, and they realized, where am I going to put them? How am I going to manage them? Where do I get insight from?

And I think we've had a phenomenon. And you know, we've seen some really interesting around digital art, you know, in the last few weeks where people have realized when it was so reproducible and so difficult without an NFT sort of framework, there wasn't the value.

And now we see with that ability, that technological innovation that's allowed someone to say, I can really be clear. This is-- you know, this is copy one, then the value has soared. I think we're going to continue to see those sorts of opportunities with digital, where it's going to open up new business opportunities and new value creation opportunities. So we're long-term believers, for sure.

MYLES UDLAND: Yeah. It's certainly an interesting time in the art world and all that kind of stuff. Probably tough for authors of, you know, spy novels and things like that-- kind of cuts out a whole genre. But, no--

DAN SPRINGER: Exactly.

MYLES UDLAND: We'll find another way to pivot. All right. Dan Springer, CEO at DocuSign. Dan, always fun to have you on. Thanks for jumping on, and I know we'll talk soon.

DAN SPRINGER: All right. Thanks so much for having me. Cheers.