DocuSign has filed paperwork with the SEC indicating it plans to lay off 10% of its employees, or roughly 700 individuals.
DocuSign experienced rapid growth during the pandemic as record numbers of people worked remotely, making digital document signing a critical component of day-to-day operations. As many companies have experienced, however, with the economic downturn has come a reduced need for many of the products and services that were flying high just months before.
On February 16, 2023, DocuSign, Inc. (the “Company”) announced a restructuring plan (the “Restructuring Plan”) that is designed to support the Company’s growth, scale and profitability objectives. As part of the Restructuring Plan, the Company expects it will restructure and reduce its current workforce by approximately 10%, primarily in the Company’s worldwide field organization.
Interestingly, the company expects to pay $25 to $35 million to implement this plan:
The Company currently estimates that it will incur charges of approximately $25 to $35 million in connection with the Restructuring Plan, consisting primarily of cash expenditures for employee transition, notice period and severance payments, employee benefits, and related costs as well as non-cash expenses related to vesting of share-based awards. The Company expects that the majority of the restructuring charges will be incurred in the first quarter of fiscal 2024, and that the execution of the Restructuring Plan will be substantially complete by the end of the second quarter of fiscal 2024.
“We have seen significant acceleration since the COVID-19 pandemic,” says DocuSign CEO Dan Springer. “A significant portion of that (increase) was due to increased use cases from customers driving that digital transformation faster with services like DocuSign. We don’t see customers going back. Once they’ve got the benefits from that efficiency in their business, the better customer experience, and the better employee experience, they’re going to stay in a digitally transformed world.”
We’ve been really pleased with the growth we’ve had since going public a few years. We have also seen significant acceleration since the COVID-19 pandemic. It’s obviously a horrible pandemic and our number one priority has been the health and wellbeing of our employees so we can take good care of our customers. As you can see in our Q1 earnings we did see an acceleration of our bookings to 59 percent.
Traditionally, if you look at the billings-type metric they have been in the mid-30s’. A significant portion of that (increase) was due to increased use cases from customers driving that digital transformation faster with services like DocuSign.
Companies To Stay In This Digitally Transformed World
One of the things we’ve seen with the pandemic impact is that it has really accelerated the path that companies were already on to drive that digital transformation. We don’t see companies after the pandemic settles down going back and saying they want more paper and more manual processes.
Once they’ve got the benefits from that efficiency in their business, the better customer experience, and the better employee experience, they’re going to stay in a digitally transformed world. They are going to use DocuSign and other fantastic services to do that.
The Future Is Going To Have eSignature At The Center
We really think that the future is going to have eSignature at the center of what we call the overall Agreement Cloud. Companies want to be more agreeable. They want to be easier to do business with and be easier to do business for. They’re going to not just use DocuSign for signature but all of the other components of preparing agreements and managing those agreements digitally once they’ve been created. That’s why we’re excited about our very robust future.
We just past a billion dollars in revenue (for DocuSign eSignature). We are only four percent penetrated today and we’re six times larger than the next biggest player in the space. There’s not a lot of penetration yet in that core business. Notary is still predominantly done manually. We are making investments there. We believe we can bring the same ease of use that we brought to eSignature we can bring to notary.
AI To Power The DocuSign Agreement Cloud
Much bigger than that, even expanding upon the opportunity of eSignature is that broader Agreement Cloud opportunity. We think this is the next big cloud opportunity. You are going to see companies increasingly say I don’t just want to do the workflow and signature. I also want to drive the creations of those agreements. I want to think about artificial intelligence and search capability to manage my agreements. This would enable me to actually manage my business and make my company more agreeable.
Those are some of the investments we’re making. That’s why we just finished the acquisition of Seal Software last month so we can bring additional artificial intelligence and analytic capability to help people run their businesses better.
COVID Accelerated Digital Transformation, Says DocuSign CEO Dan Springer
DocuSign CEO Dan Springer is out as the company’s stock has tanked while the company struggles to return to its pandemic-fueled highs.
Like many companies, DocuSign reached all-new highs during the early days of the pandemic as businesses turned to cloud-based tools to stay productive as employees worked from home. Unfortunately for DocuSign, the company has struggled to maintain its pandemic-level growth rate, and its stock has reflected that. After posting disappointing quarterly results, the company announced that Springer would resign as CEO.
The company struck a positive tone about its future prospects.
“DocuSign has the people, the products and the brand to transform the way the world agrees, making us a leader in our Anywhere Economy,” said chairman Pete Solvik, according to TheStreet.
In the meantime, board member Maggie Wilderotter will serve as interim CEO while the company looks for a permanent replacement. The company’s stock had rebounded 4.1% in early Tuesday trading before settling back down.
DocuSign has acquired Liveoak Technologies in an effort to offer remote notarization services to customers.
As an unprecedented number of individuals are working from home and companies are conducting business remotely, the ability to sign documents remotely is more important than ever. Unfortunately, notarization is a weak point in the process, often still requiring in-person dealings.
DocuSign is working to change that with the acquisition of Liveoak. The two companies previously had a partnership, integrating DocuSign’s eSignature into Liveoak’s platform. With the acquisition, DocuSign will use Liveoak’s technology to rollout DocuSign Notary, a remote notary service that will use video concerning to enable legally binding, notarized transactions. State laws are increasingly recognizing these kind of agreements, and the pandemic is likely to drive further adoption.
“DocuSign is practically synonymous with the electronic completion of agreements from almost anywhere, on almost any device,” said DocuSign COO, Scott Olrich. “But there is an important class of high-value agreements that require the live participation of a notary or other representative. With this acquisition, we intend to bring the DocuSign experience to those agreements too—so signers and those assisting can get business done no matter where they are.”
“Given the state of technology today, people often wonder why they still need to sign any document in-person—and the pandemic has only exacerbated this concern,” said Liveoak CEO, Tim Ramza. “We’ve been working to solve this very issue for years, and we’ve had a strong partnership with DocuSign as a result. By joining forces and fully integrating our solutions now, we can bring the ease and simplicity of DocuSign to the execution of notarized and other complex assisted agreements.”
DocuSign Notary is the next evolution of electronic document signing, and will help address one of the pain points associated with contracts and transactions.
DocuSign is moving into AI with the acquisition of Seal Software, maker of AI-driven contract analysis, for $188 million in cash.
DocuSign is one of the leading electronic contract platforms, providing a way for companies to share, organize and sign electronic documents. DocuSign already resells Seal’s software as part of its DocuSign Agreement Cloud. The acquisition will drive further integration between the two platforms.
“As the Agreement Cloud company, DocuSign is about digitally transforming the very foundation of doing business: agreements and agreement processes,” said Scott Olrich, DocuSign’s chief operating officer. “We believe that AI will play a vital role in this transformation. And by integrating Seal into DocuSign, we can benefit from its deep technology expertise and its broad experience applying AI to agreements.”
According to the statement, “Seal is recognized as one of the pioneers in AI-driven contract analytics. Its technology can rapidly search large collections of agreements by legal concepts (rather than just by keywords); automatically extract and compare critical clauses and terms side-by-side; quickly identify areas of risk and opportunity; and deliver actionable insights that help solve legal and business challenges.”
DocuSign will continue to sell Seal’s software, in addition to integrating it with DocuSign CLM.
“For DocuSign customers, these capabilities will mean faster, more efficient agreement processes. Seal customers will in turn benefit from deeper access to the full capability of the DocuSign Agreement Cloud—especially document generation and advanced workflows.”
DocuSign’s acquisition of Seal Software illustrates the wide-ranging industries AI continues to impact.
“The new cloud opportunity that we see is in the Agreement Cloud,” says DocuSign CEO Dan Springer. “It is going to be the next big cloud because we think this is about bringing multiple clouds together. We work strongly with ERP and strongly with CRM. We’re actually finding opportunities increasingly every day to make the other cloud investments that people are making have more value before them by bringing them together. What connects them is the agreements those companies do.”
Dan Springer, CEO of DocuSign, discusses their launch of the Agreement Cloud and how it will transform companies to more easily work together and “be more agreeable.” Springer was interviewed on CNBC:
DocuSign Helping Companies Be “More Agreeable”
We’re super excited about the DocuSign Agreement Cloud. We realize that our customers have said e-signature is a fantastic foundation for their business. But they have a broader set of needs around the way they not only sign agreements but the way they prepare them and the way they manage them after they’ve been signed. So we’ve built out a broader suite of products and that’s what we’re bringing to market today.
I think it’s key, the connectedness that Slack is seeing and pushing for is very similar to what we see as well. Companies want to be, in our terminology, more agreeable. Those are the communications they want to have within their companies or their back-office functions that they’ve tried to digitally transform, but also for the front office. They really want to have a customer experience that is what the customers expect so they will be easy to do business with. We see that the Slack moves are very similar to what we’re seeing in the Agreement Cloud.
The DocuSign Agreement Cloud Explained
We Like To Talk About How DocuSign Is Unusual
We’re super excited about the core e-signature business. While we talk about the Agreement Cloud, we think that’s the broader opportunity to really make this one of the most significant cloud opportunities. We don’t in any way want to move away from the excitement we have over the course e-signature business. It’s sort of what brought us to the dance. If you think about the roughly billion dollars of revenue that we will deliver this year the bulk of it will still come from e-signature. The growth opportunities are very broad.
We like to talk about the fact that DocuSign is unusual. We serve from the smallest business to the largest enterprise and across all verticals. We are excited to talk about federal. We had our first million-dollar ACVD deal that we just announced in the quarter. So it’s not just that segment, it really is very broad. We think financial services will continue to be a driver for us and as I mentioned federal will be exciting. You’re going to see us continue to expand internationally and domestically. It really is a broad-based opportunity.
The Agreement Cloud Is Going To Be The Next Big Cloud
If you think about the overall TAM, e-signature is a $25 billion dollar market. With the broader Agreement Cloud that gets into a magnitude of many billions more, maybe doubling the overall opportunity. When you think about the competitive set it’s so early. We’re only about four or five percent penetrated in the core signature business and less on the broader ones. When we actually talk about competition, we talk about paper and manual processes. This business is so early days. We’re in the early innings. We believe that our biggest competition really is paper and manual processes. We like to say it’s a great competitive set to have because they don’t fight back very hard. It’s just a matter of time before we really are going to be able to replace and modernize those systems.
When you think about the infrastructure side, it’s a huge part of where the cloud is going. We’ve been much more focused on the application and thinking about that end-user value. But on the infrastructure side, I think it’s a hugely competitive space. It used to be looking like a two-horse race with Microsoft and Amazon. Now looking at some of the other players, such as what Google’s doing, I think you’re going to see more and more competition in that space. I don’t think it’s going to be necessarily bad for those players because it’s a really large expanding market.
On the application side, the new cloud opportunity that we see is in the Agreement Cloud. It is going to be the next big cloud because we think this is about bringing multiple clouds together. We work strongly with ERP and strongly with CRM. We’re actually finding opportunities increasingly every day to make the other cloud investments that people are making have more value before them by bringing them together. What connects them is the agreements those companies do.
The Agreement Cloud Is Going To Be The Next Big Cloud, Says DocuSign CEO Dan Springer
Microsoft Office has always been an important part of Microsoft’s overall strategy, but Office 365 is seemingly now the most important aspect of Microsoft’s core enterprise business. The company has been busysecuring partnerships that add useful applications to Office 365 with this week’s addition being no exception.
Microsoft announced today that it has entered into a “long-term strategic partnership” with DocuSign to offer the latter’s eSignature apps across all of Office 365. What this means is that Office 365 will now be able to submit and digitally sign documents without having to leave Office. It’s a win for DocuSign as its product will be used in more places and it’s a win for Microsoft as it keeps users inside the Office ecosystem.
“Leading partners like DocuSign are building apps on the Office platform to help our customers get more value directly from their most highly used applications,” said John Case, vice president of Marketing, Microsoft Office. “This partnership with DocuSign helps our customers keep transactions digital and manage eSignatures seamlessly from within Office 365, where they already communicate, collaborate and create.”
Here’s a list of benefits users will experience thanks to this partnership:
Easy administration and use. Office 365 and SharePoint administrators will be able to add DocuSign Apps for all users directly from their administration consoles.
Single sign-on. DocuSign has adopted Windows Azure Active Directory to provide single sign-on capabilities with Office 365 credentials, providing a seamless path to manage accounts.
Secured storage. DocuSigned documents are automatically stored in Microsoft OneDrive for Business for full control.
Office Store availability. Individuals can use self-service to access the apps and Word templates directly from the Office Store.
Continued innovation. DocuSign and Microsoft will continue to collaborate to bring new innovations to customers on the Office 365 platform.
“We’re excited about the momentum behind Office 365 and customers making the transition from their traditional Office applications to all-new scenarios enabled by cloud services,” said Keith Krach, chairman and CEO, DocuSign. “We believe Office 365 customers of all sizes will appreciate the seamless availability of DocuSign integrated into the applications they use every day. The combination of Microsoft and DocuSign further helps organizations keep business digital, and leverages the power of the cloud to help them focus on business results.”
