Domo Announces Third Quarter Fiscal 2024 Financial Results

Rhea-AI Summary

Domo, Inc. (Nasdaq: DOMO) reported a 1% year-over-year increase in total revenue to $79.7 million for the fiscal third quarter ended October 31, 2023. Subscription revenue increased by 3% year over year to $71.3 million, representing 89% of total revenue. The company achieved a 4% year-over-year increase in Remaining Performance Obligations (RPO) to $367.2 million. Domo's GAAP subscription gross margin was 84%, and its non-GAAP subscription gross margin was 85%, both consistent with Q3 FY23. The company reported a GAAP net loss of $16.4 million, or $0.45 per share, and a non-GAAP net loss of $24.0 thousand, or $0.00 per share. Cash, cash equivalents, and restricted cash stood at $57.4 million as of October 31, 2023. Domo provided guidance for its fourth fiscal quarter and full year fiscal 2024, expecting revenue to be in the range of $79.0 million to $80.0 million for Q4 Fiscal 2024, and in the range of $317.8 million to $318.8 million for Full Year Fiscal 2024.

SILICON SLOPES, Utah--(BUSINESS WIRE)-- Domo, Inc. (Nasdaq: DOMO) today announced results for its fiscal third quarter ended October 31, 2023.

Fiscal Third Quarter Results

• Total revenue was $79.7 million, an increase of 1% year over year
• Subscription revenue was $71.3 million, an increase of 3% year over year
• Subscription revenue represented 89% of total revenue
• Billings were $74.8 million, an increase of 1% year-over-year
• Remaining Performance Obligations (RPO) was $367.2 million as of October 31, 2023, an increase of 4% year over year
• RPO expected to be recognized as revenue in the next 12 months was $230.8 million as of October 31, 2023, consistent with Q3 FY23
• Net cash used in operating activities was $4.3 million
• GAAP subscription gross margin was 84%, consistent with Q3 FY23
• Non-GAAP subscription gross margin was 85%, consistent with Q3 FY23
• GAAP operating margin increased by 9 percentage points year over year
• Non-GAAP operating margin increased by 5 percentage points year over year
• GAAP net loss was $16.4 million, and GAAP net loss per share was $0.45, based on 36.3 million weighted-average shares outstanding
• Non-GAAP net loss was $24.0 thousand, and non-GAAP net loss per share was $0.00, based on 36.3 million weighted-average shares outstanding
• Cash, cash equivalents, and restricted cash were $57.4 million as of October 31, 2023

“In Q3, we exceeded guidance for key top-line metrics and delivered record operating margin. I am confident we are focused on the right initiatives--such as driving consumption and offering a true freemium model--to help accelerate our path to long-term, profitable growth,” said Josh James, founder and CEO, Domo. “Customers continue to realize significant value from our platform, and I’m incredibly proud of the talent and dedication of our team in helping us deliver on our mission to put data to work for everyone.”

Recent Highlights

We believe the following announcements and recognition demonstrate our commitment to product innovation and customer value:

• Domo was a leader in Nucleus Research’s 2023 Embedded Analytics Technology Value Matrix for the third consecutive year.
• Domo and customer Regional One Health received a Nucleus Research ROI Award for achieving a total ROI of 190% through the adoption of Domo's data experience platform.
• Domo was ranked as an Overall Experience Leader in Dresner Advisory Services' 2023 Small and Midsize Enterprise Business Intelligence Market Study and was named an Overall Leader in Dresner Advisory Services’ 2023 Industry Excellence Awards.
• Domo was named to the 2023 Constellation ShortList™ for Marketing Analytics Solutions, its ninth placement on this ShortList.

Business Outlook

Based on information available as of November 30, 2023, Domo is providing the following guidance for its fourth fiscal quarter and full year fiscal 2024:

Q4 Fiscal 2024

• Revenue is expected to be in the range of $79.0 million to $80.0 million
• Non-GAAP net loss per share, basic and diluted, is expected to be between $0.05 and $0.09 based on 36.8 million weighted-average shares outstanding, basic and diluted

Full Year Fiscal 2024

• Revenue is expected to be in the range of $317.8 million to $318.8 million, representing year-over-year growth of 2-4%.
• Non-GAAP net loss per share, basic and diluted, is expected to be between $0.24 and $0.28 based on 36.1 million weighted-average shares outstanding, basic and diluted

We have not reconciled guidance for non-GAAP metrics to their most directly comparable GAAP measures because certain items that impact these measures are not within our control or cannot be reasonably predicted.

Earnings Call Details

Domo plans to host a conference call today to review its fiscal 2024 third quarter financial results and to discuss its financial outlook. The call is scheduled to begin at 3:00 p.m. MT/ 5:00 p.m. ET. A live webcast of the event will be available on the Domo Investor Relations website at https://www.domo.com/ir. Participants can register for the call in advance by visiting https://conferencingportals.com/event/UamMeXVB. Instructions will be shared on how to join the call after registering.

A replay will be available at (800) 770-2030 or (647) 362-9199 with conference ID #41576 following the completion of the conference call until 11:59 p.m. (ET) December 14, 2023.

About Domo

Domo puts data to work for everyone so they can multiply their impact on the business. Our cloud-native data experience platform goes beyond traditional business intelligence and analytics, making data visible and actionable with user-friendly dashboards and apps. Underpinned by AI, data science and a secure data foundation that connects with existing cloud and legacy systems, Domo helps companies optimize critical business processes at scale and in record time to spark the bold curiosity that powers exponential business results.

For more information, visit www.domo.com. You can also follow Domo on X, Facebook and LinkedIn.

Domo Disclosure Channels to Disseminate Information

Domo investors and others should note that we announce material information to the public about our company, products and services, and other issues through a variety of means, including Domo’s website, press releases, SEC filings, blogs and social media, in order to achieve broad, non-exclusionary distribution of information to the public. We intend to use the Domo Facebook page, the Domo LinkedIn page, the Domo blog, the @Domotalk X account and the @JoshJames X account as a means of disclosing information about the Company and its services and for complying with the disclosure obligations under Regulation FD. The information we post through these social media channels may be deemed material. Accordingly, we encourage investors and others to monitor these social media channels in addition to following our press releases, SEC filings and public conference calls and webcasts. The social media channels that we intend to use as a means of disclosing the information described here may be updated from time to time as listed on our investor relations webpage.

Use of Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), we reference in this press release and the accompanying tables the following non-GAAP financial measures: billings, non-GAAP subscription gross margin, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, and adjusted free cash flow. In computing these measures, we exclude the effects of certain items including stock-based compensation expense, amortization of certain intangible assets, severance of executive officers who report to the Chief Executive Officer, and proceeds from shares issued in connection with the employee stock purchase plan.

As it relates to adjusted free cash flow, we add back amounts equal to the proceeds from shares issued in connection with employee stock purchase plan to reflect the non-cash nature of these transactions. Because no cash is exchanged in these transactions, showing proceeds in the financing section of the statement of cash flows as required by GAAP results in a corresponding decrease in the operating section, which management believes is not indicative of actual cash used in or provided by our operations. We believe that this non-GAAP cash metric is useful because it provides investors with the same information that management uses to consistently evaluate, forecast and measure the Company’s actual cash flows and its ability to achieve and maintain positive cash flows.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses that may not be indicative of our ongoing core business operating results. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and planning, forecasting, and analyzing future periods.

During the current fiscal year, we revised our definition for non-GAAP statement of operations line items to adjust for executive severance expenses. We have revised the prior period amounts to conform to our current period presentation.

For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Reconciliation of Non-GAAP Financial Measures" included at the end of this release.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements of our Chief Executive Officer, statements regarding our future, expectations for RPO in the next 12 months, our financial outlook for our fourth fiscal quarter and full fiscal year 2024, and results for future periods. Forward-looking statements are subject to risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our filings with the SEC, including, without limitation, the Annual Report on Form 10-K filed with the SEC on March 27, 2023 and the Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2023 expected to be filed with the SEC on or about December 11, 2023. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update this information unless required by law.

Domo is a registered trademark of Domo, Inc.

Domo, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
		Three Months Ended								Nine Months Ended
		October 31,								October 31,
			2022				2023				2022				2023
Revenue:
Subscription		$	69,041			$	71,293			$	201,022			$	213,594
Professional services and other			9,985				8,382				27,999				25,211
Total revenue			79,026				79,675				229,021				238,805
Cost of revenue:
Subscription (1)			11,342				11,523				32,721				33,588
Professional services and other (1)			7,572				7,253				22,167				22,847
Total cost of revenue			18,914				18,776				54,888				56,435
Gross profit			60,112				60,899				174,133				182,370
Operating expenses:
Sales and marketing (1), (3)			41,012				40,262				131,299				124,464
Research and development (1)			24,583				19,729				73,108				63,931
General and administrative (1), (2), (3)			13,029				12,130				42,514				35,509
Total operating expenses			78,624				72,121				246,921				223,904
Loss from operations			(18,512	)			(11,222	)			(72,788	)			(41,534	)
Other expense, net (1)			(5,032	)			(4,930	)			(12,383	)			(14,549	)
Loss before income taxes			(23,544	)			(16,152	)			(85,171	)			(56,083	)
Provision for income taxes			167				261				567				801
Net loss		$	(23,711	)		$	(16,413	)		$	(85,738	)		$	(56,884	)
Net loss per share (basic and diluted)		$	(0.69	)		$	(0.45	)		$	(2.53	)		$	(1.59	)
Weighted-average number of shares (basic and diluted)			34,392				36,310				33,893				35,812
(1) Includes stock-based compensation expenses, as follows:
Cost of revenue:
Subscription		$	667			$	670			$	2,176			$	1,958
Professional services and other			308				359				1,339				1,311
Sales and marketing			7,336				6,364				23,284				19,260
Research and development			5,909				4,621				19,196				14,214
General and administrative			4,807				4,174				18,319				10,642
Other expense, net			180				181				550				516
Total stock-based compensation expenses		$	19,207			$	16,369			$	64,864			$	47,901
(2) Includes amortization of certain intangible assets, as follows:
General and administrative		$	20			$	20			$	60			$	60
(3) Includes executive officer severance, as follows:
Sales and marketing		$	113			$	-			$	620			$	443
General and administrative			-				-				-				1,553
Total executive officer severance		$	113			$	-			$	620			$	1,996

Domo, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
	January 31,				October 31,
		2023				2023
Assets
Current assets:
Cash, cash equivalents, and restricted cash	$	66,500			$	57,387
Accounts receivable, net		78,958				55,208
Contract acquisition costs		15,908				15,794
Prepaid expenses and other current assets		7,447				7,881
Total current assets		168,813				136,270
Property and equipment, net		21,375				26,130
Right-of-use assets		15,255				12,333
Contract acquisition costs, noncurrent		22,299				19,601
Intangible assets, net		2,794				2,760
Goodwill		9,478				9,478
Other assets		2,102				1,647
Total assets	$	242,116			$	208,219
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable	$	12,120			$	10,451
Accrued expenses and other current liabilities		49,306				43,510
Lease liabilities		4,905				4,407
Current portion of deferred revenue		182,273				158,522
Total current liabilities		248,604				216,890
Lease liabilities, noncurrent		15,271				12,161
Deferred revenue, noncurrent		3,609				4,236
Other liabilities, noncurrent		12,425				13,448
Long-term debt		108,607				112,255
Total liabilities		388,516				358,990
Commitments and contingencies
Stockholders' deficit:
Common stock		35				36
Additional paid-in capital		1,183,921				1,236,895
Accumulated other comprehensive loss		(322	)			(784	)
Accumulated deficit		(1,330,034	)			(1,386,918	)
Total stockholders' deficit		(146,400	)			(150,771	)
Total liabilities and stockholders' deficit	$	242,116			$	208,219

Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
	Three Months Ended								Nine Months Ended
	October 31,								October 31,
		2022				2023				2022				2023
Cash flows from operating activities
Net loss	$	(23,711	)		$	(16,413	)		$	(85,738	)		$	(56,884	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,269				1,636				4,089				4,738
Non-cash lease expense		987				1,063				3,362				3,235
Amortization of contract acquisition costs		4,247				4,398				12,825				13,354
Stock-based compensation		19,207				16,369				64,864				47,901
Other, net		1,135				1,072				3,027				3,643
Changes in operating assets and liabilities:
Accounts receivable, net		(4,166	)			(3,022	)			10,835				23,750
Contract acquisition costs		(4,405	)			(4,016	)			(11,687	)			(10,921	)
Prepaid expenses and other assets		1,282				291				2,063				(173	)
Accounts payable		384				998				13,291				(966	)
Operating lease liabilities		(1,239	)			(1,237	)			(3,378	)			(4,054	)
Accrued and other liabilities		3,527				(608	)			(11,872	)			(3,361	)
Deferred revenue		(4,999	)			(4,856	)			(9,740	)			(23,124	)
Net cash used in operating activities		(6,482	)			(4,325	)			(8,059	)			(2,862	)
Cash flows from investing activities
Purchases of property and equipment		(1,657	)			(2,714	)			(5,073	)			(9,214	)
Purchases of intangible assets		-				-				-				(26	)
Net cash used in investing activities		(1,657	)			(2,714	)			(5,073	)			(9,240	)
Cash flows from financing activities
Proceeds from shares issued in connection with employee stock purchase plan		-				1,374				1,563				3,406
Proceeds from structured payables		6,624				-				6,624				-
Payments on structured payables		(6,624	)			-				(6,624	)			-
Proceeds from exercise of stock options		56				62				861				65
Net cash provided by financing activities		56				1,436				2,424				3,471
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(729	)			(862	)			(1,771	)			(482	)
Net decrease in cash, cash equivalents, and restricted cash		(8,812	)			(6,465	)			(12,479	)			(9,113	)
Cash, cash equivalents, and restricted cash at beginning of period		79,894				63,852				83,561				66,500
Cash, cash equivalents, and restricted cash at end of period	$	71,082			$	57,387			$	71,082			$	57,387

Domo, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)
			Three Months Ended								Nine Months Ended
			October 31,								October 31,
				2022				2023				2022				2023
Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:
Revenue:
Subscription			$	69,041			$	71,293			$	201,022			$	213,594
Cost of revenue:
Subscription				11,342				11,523				32,721				33,588
Subscription gross profit on a GAAP basis				57,699				59,770				168,301				180,006
Subscription gross margin on a GAAP basis				84	%			84	%			84	%			84	%
Stock-based compensation				667				670				2,176				1,958
Subscription gross profit on a non-GAAP basis			$	58,366			$	60,440			$	170,477			$	181,964
Subscription gross margin on a non-GAAP basis				85	%			85	%			85	%			85	%
Reconciliation of Total Operating Expenses on a GAAP Basis to Total Operating Expenses on a Non-GAAP Basis:
Total operating expenses on a GAAP basis			$	78,624			$	72,121			$	246,921			$	223,904
Stock-based compensation				(18,052	)			(15,159	)			(60,799	)			(44,116	)
Amortization of certain intangible assets				(20	)			(20	)			(60	)			(60	)
Executive officer severance (1)				(113	)			-				(620	)			(1,996	)
Total operating expenses on a non-GAAP basis			$	60,439			$	56,942			$	185,442			$	177,732
Reconciliation of Operating Loss on a GAAP Basis to Operating Income (Loss) on a Non-GAAP Basis:
Operating loss on a GAAP basis			$	(18,512	)		$	(11,222	)		$	(72,788	)		$	(41,534	)
Stock-based compensation				19,027				16,188				64,314				47,385
Amortization of certain intangible assets				20				20				60				60
Executive officer severance (1)				113				-				620				1,996
Operating income (loss) on a non-GAAP basis			$	648			$	4,986			$	(7,794	)		$	7,907
Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis:
Operating margin on a GAAP basis				(23	)%			(14	)%			(32	)%			(17	)%
Stock-based compensation				24				20				28				19
Executive officer severance (1)				-				-				1				1
Operating margin on a non-GAAP basis				1	%			6	%			(3	)%			3	%
Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis:
Net loss on a GAAP basis			$	(23,711	)		$	(16,413	)		$	(85,738	)		$	(56,884	)
Stock-based compensation				19,207				16,369				64,864				47,901
Amortization of certain intangible assets				20				20				60				60
Executive officer severance (1)				113				-				620				1,996
Net (loss) income on a non-GAAP basis			$	(4,371	)		$	(24	)		$	(20,194	)		$	(6,927	)
Reconciliation of Net Loss per Share on a GAAP Basis to Net Loss per Share on a Non-GAAP Basis:
Net loss per share on a GAAP basis			$	(0.69	)		$	(0.45	)		$	(2.53	)		$	(1.59	)
Stock-based compensation				0.56				0.45				1.91				1.34
Executive officer severance (1)				—				—				0.01				0.06
Net loss per share on a non-GAAP basis			$	(0.13	)		$	—			$	(0.61	)		$	(0.19	)
Billings:
Total revenue			$	79,026			$	79,675			$	229,021			$	238,805
Add:
Deferred revenue (end of period)				157,915				158,522				157,915				158,522
Deferred revenue, noncurrent (end of period)				3,100				4,236				3,100				4,236
Less:
Deferred revenue (beginning of period)				(163,454	)			(164,882	)			(168,335	)			(182,273	)
Deferred revenue, noncurrent (beginning of period)				(2,560	)			(2,732	)			(2,420	)			(3,609	)
Decrease in deferred revenue (current and noncurrent)				(4,999	)			(4,856	)			(9,740	)			(23,124	)
Billings			$	74,027			$	74,819			$	219,281			$	215,681
Reconciliation of Net Cash Used in Operating Activities to Adjusted Free Cash Flow:
Net cash used in operating activities			$	(6,482	)		$	(4,325	)		$	(8,059	)		$	(2,862	)
Proceeds from shares issued in connection with employee stock purchase plan				-				1,374				1,563				3,406
Purchases of property and equipment				(1,657	)			(2,714	)			(5,073	)			(9,214	)
Adjusted free cash flow			$	(8,139	)		$	(5,665	)		$	(11,569	)		$	(8,670	)
(1) During the current fiscal year, we revised our definition for non-GAAP statement of operations line items to adjust for executive severance expenses. We have revised the prior period amounts to conform to our current period presentation.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231130408624/en/

Media: Cynthia Cowen

PR@domo.com

Investors: Peter Lowry

IR@Domo.com

Source: Domo, Inc.

FAQ

What were Domo, Inc.'s (Nasdaq: DOMO) total revenue and subscription revenue for the fiscal third quarter ended October 31, 2023?

Domo, Inc. reported total revenue of $79.7 million, with subscription revenue of $71.3 million.

What was the year-over-year change in Domo, Inc.'s (Nasdaq: DOMO) subscription revenue for the fiscal third quarter ended October 31, 2023?

Domo, Inc. experienced a 3% year-over-year increase in subscription revenue.

What was Domo, Inc.'s (Nasdaq: DOMO) GAAP subscription gross margin for the fiscal third quarter ended October 31, 2023?

Domo, Inc.'s GAAP subscription gross margin was 84%, consistent with Q3 FY23.

What was Domo, Inc.'s (Nasdaq: DOMO) non-GAAP net loss per share for the fiscal third quarter ended October 31, 2023?

Domo, Inc. reported a non-GAAP net loss per share of $0.00, based on 36.3 million weighted-average shares outstanding.

What is Domo, Inc.'s (Nasdaq: DOMO) guidance for its full year fiscal 2024 revenue?

Domo, Inc. expects its full year fiscal 2024 revenue to be in the range of $317.8 million to $318.8 million.