Domo Announces Third Quarter Fiscal 2025 Financial Results

Rhea-AI Summary

Domo announced its fiscal third-quarter results for the period ending October 31, 2024. Total revenue was $79.8 million, with subscription revenue at $71.1 million. Billings reached $73.4 million. Subscription RPO stood at $354.1 million, up 3% year over year, with $145.9 million expected to be recognized beyond twelve months, a 14% increase. Net cash used in operating activities was $13.7 million, and adjusted free cash flow was negative $13.8 million. GAAP operating margin was negative 14%, while non-GAAP operating margin was 3%. GAAP net loss was $18.8 million, or $0.48 per share. Non-GAAP net loss was $3.2 million, or $0.08 per share. Cash and cash equivalents were $40.9 million. CEO Josh James highlighted the company's focus on ecosystem-led growth and AI innovation. For Q4 fiscal 2025, Domo expects revenue between $77.5 million and $78.5 million, with a non-GAAP net loss per share of $0.13 to $0.17. For the full year, Domo projects revenue between $315.5 million and $316.5 million, with a non-GAAP net loss per share of $0.60 to $0.64.

Positive

• Total revenue of $79.8 million.
• Subscription revenue of $71.1 million.
• Subscription RPO increased by 3% to $354.1 million.
• Subscription RPO beyond twelve months increased by 14% to $145.9 million.
• Non-GAAP operating margin of 3%.

Negative

• Net cash used in operating activities was $13.7 million.
• Adjusted free cash flow was negative $13.8 million.
• GAAP operating margin was negative 14%.
• GAAP net loss was $18.8 million.
• GAAP net loss per share was $0.48.
• Non-GAAP net loss was $3.2 million.
• Non-GAAP net loss per share was $0.08.

Insights

Financial Analyst

The Q3 results present a mixed financial picture for Domo. Total revenue of $79.8 million shows stability, with subscription revenue comprising $71.1 million. However, concerning signals include a negative operating cash flow of $13.7 million and a GAAP net loss of $18.8 million. The 3% YoY increase in RPO to $354.1 million indicates modest growth momentum. Forward guidance suggesting Q4 revenue between $77.5-78.5 million points to potential sequential decline. The cash position of $40.9 million requires monitoring given the negative free cash flow. While the company's focus on AI innovation and ecosystem-led growth shows strategic direction, the financial metrics suggest operational challenges that need addressing.

Tech Industry Analyst

Domo's strategic pivot towards AI integration and consumption-based contracts represents an important adaptation to current market trends. Their recognition in Nucleus Research's Embedded Analytics Matrix and top ranking in Dresner Advisory's reports validate their technological capabilities. The 14% increase in long-term subscription RPO suggests growing customer confidence in their platform. However, the transition to consumption-based models typically creates near-term revenue pressure as seen in their guidance. The emphasis on becoming an "anchor technology" in customers' data stacks shows promise, particularly as organizations seek to consolidate their data and AI tools, but execution will be important in this competitive landscape.

SILICON SLOPES, Utah--(BUSINESS WIRE)-- Domo, Inc. (Nasdaq: DOMO) today announced results for its fiscal third quarter ended October 31, 2024.

Fiscal Third Quarter Results

• Total revenue was $79.8 million
• Subscription revenue was $71.1 million
• Billings were $73.4 million
• Subscription Remaining Performance Obligations (RPO) was $354.1 million as of October 31, 2024, an increase of 3% year over year
• Subscription RPO expected to be recognized beyond twelve months was $145.9 million as of October 31, 2024, an increase of 14% year over year
• Net cash used in operating activities was $13.7 million
• Adjusted free cash flow was negative $13.8 million
• GAAP operating margin was negative 14%
• Non-GAAP operating margin was 3%
• GAAP net loss was $18.8 million, and GAAP net loss per share was $0.48, based on 38.8 million weighted-average shares outstanding
• Non-GAAP net loss was $3.2 million, and non-GAAP net loss per share was $0.08, based on 38.8 million weighted-average shares outstanding
• Cash and cash equivalents were $40.9 million as of October 31, 2024

“Our focus on ecosystem-led growth, consumption-based contracts and AI innovation is paying off with promising momentum, as we see more demand for Domo as an anchor technology in customers’ data stacks,” said Josh James, founder and CEO, Domo. “The data and AI landscape is evolving to create new market opportunities for Domo, and we feel confident we’re in the right position to capitalize on this moment.”

Recent Highlights

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

• Domo was named a leader in Nucleus Research’s 2024 Embedded Analytics Technology Value Matrix for the fourth consecutive year.
• Domo ranked #1 in the 2024 Dresner Advisory Wisdom of Crowds® Analytical Platforms Report for the fourth consecutive year, and was ranked an “Overall Leader” in Dresner Advisory Services’ 2024 Wisdom of Crowds® Small and Midsize Enterprise (SME) Business Intelligence (BI) Market Study for the eighth consecutive year.
• Domo and Domo.AI were named a finalist in the Business Intelligence or Analytics category of the 2024 SaaS Awards.
• Domo was recognized as a Business Intelligence (BI) One to Watch in the Modern Marketing Data Stack 2025: How Leading Marketers Are Thriving In a World Redefined By AI, Privacy and Data Gravity executed and launched by Snowflake, the AI Data Cloud company.

Business Outlook

Based on information available as of December 5, 2024, Domo is providing the following guidance for its fourth quarter of fiscal 2025 and full year fiscal 2025:

Q4 Fiscal 2025

• Revenue is expected to be in the range of $77.5 million to $78.5 million
• Non-GAAP net loss per share, basic and diluted, is expected to be between $0.13 and $0.17 based on 39.3 million weighted-average shares outstanding, basic and diluted

Full Year Fiscal 2025

• Revenue is expected to be in the range of $315.5 million to $316.5 million
• Non-GAAP net loss per share, basic and diluted, is expected to be between $0.60 and $0.64 based on 38.5 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 2025 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 and a live dial-in is available at (877) 484-6065 or (201) 689-8846.

A replay will be available at (877) 660-6853 or (201) 612-7415 with the access ID#13750075 following the completion of the conference call until 11:59 p.m. (ET) January 4, 2025.

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 LinkedIn, X and Facebook.

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, filings with the U.S. Securities and Exchange Commission (SEC), 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: 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, billings, and adjusted free cash flow. In computing the measures other than billings and adjusted free cash flow, we exclude the effects of stock-based compensation expense, amortization of certain intangible assets, severance of executive officers who report to the Chief Executive Officer, loss on extinguishment of debt, and remeasurement of warrant liability. Billings is defined as total revenue plus the change in deferred revenue in a period. In computing adjusted free cash flow, we exclude the effects of proceeds from shares issued in connection with the employee stock purchase plan, purchases of property and equipment, and net change in short-term payable financing.

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 also add back the net change to short-term payable financing to adjusted free cash flow. 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 items 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.

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 competitive positions, our financial outlook for our fourth fiscal quarter, 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 28, 2024 and the Quarterly Report on Form 10-Q for the quarter ended October 31, 2024 expected to be filed with the SEC on or about December 10, 2024. 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,
		2023				2024				2023				2024
Revenue:
Subscription		$	71,293			$	71,113			$	213,594			$	214,144
Professional services and other			8,382				8,651				25,211				24,130
Total revenue			79,675				79,764				238,805				238,274
Cost of revenue:
Subscription (1)			11,523				13,334				33,588				39,410
Professional services and other (1)			7,253				6,627				22,847				21,389
Total cost of revenue			18,776				19,961				56,435				60,799
Gross profit			60,899				59,803				182,370				177,475
Operating expenses:
Sales and marketing (1), (3)			40,262				37,194				124,464				116,040
Research and development (1)			19,729				21,264				63,931				65,952
General and administrative (1), (2), (3)			12,130				12,429				35,509				42,504
Total operating expenses			72,121				70,887				223,904				224,496
Loss from operations			(11,222	)			(11,084	)			(41,534	)			(47,021	)
Other expense:
Loss on extinguishment of debt			-				(1,850	)			-				(1,850	)
Other expense, net (1), (4)			(4,930	)			(5,622	)			(14,549	)			(14,805	)
Total other expense			(4,930	)			(7,472	)			(14,549	)			(16,655	)
Loss before income taxes			(16,152	)			(18,556	)			(56,083	)			(63,676	)
Provision for income taxes			261				205				801				582
Net loss		$	(16,413	)		$	(18,761	)		$	(56,884	)		$	(64,258	)
Net loss per share (basic and diluted)		$	(0.45	)		$	(0.48	)		$	(1.59	)		$	(1.68	)
Weighted-average number of shares (basic and diluted)			36,310				38,832				35,812				38,243
(1) Includes stock-based compensation expenses, as follows:
Cost of revenue:
Subscription		$	670			$	784			$	1,958			$	2,389
Professional services and other			359				295				1,311				942
Sales and marketing			6,364				4,754				19,260				15,238
Research and development			4,621				4,038				14,214				12,529
General and administrative			4,174				3,080				10,642				12,075
Other expense, net			181				210				516				603
Total stock-based compensation expenses		$	16,369			$	13,161			$	47,901			$	43,776
(2) Includes amortization of certain intangible assets, as follows:
General and administrative		$	20			$	142			$	60			$	426
(3) Includes executive officer severance, as follows:
Sales and marketing		$	-			$	-			$	443			$	-
General and administrative			-				-				1,553				-
Total executive officer severance		$	-			$	-			$	1,996			$	-
(4) Includes remeasurement of warrant liability, as follows:
Other expense, net		$	-			$	455			$	-			$	33

Domo, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
		January 31,				October 31,
		2024				2024
Assets
Current assets:
Cash, cash equivalents, and restricted cash		$	60,939			$	40,925
Accounts receivable, net			67,197				57,177
Contract acquisition costs			16,006				15,288
Prepaid expenses and other current assets			9,602				7,083
Total current assets			153,744				120,473
Property and equipment, net			27,003				27,937
Right-of-use assets			11,746				10,108
Contract acquisition costs, noncurrent			19,542				17,420
Intangible assets, net			2,740				2,267
Goodwill			9,478				9,478
Other assets			1,407				2,528
Total assets		$	225,660			$	190,211
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable		$	4,313			$	8,403
Accrued expenses and other current liabilities			43,430				58,392
Lease liabilities			4,807				5,506
Current portion of deferred revenue			185,250				153,919
Total current liabilities			237,800				226,220
Lease liabilities, noncurrent			11,135				8,125
Deferred revenue, noncurrent			2,736				3,311
Other liabilities, noncurrent			14,001				8,151
Long-term debt			113,534				115,574
Total liabilities			379,206				361,381
Commitments and contingencies
Stockholders' deficit:
Common stock			37				39
Additional paid-in capital			1,252,200				1,298,596
Accumulated other comprehensive (loss) income			(180	)			56
Accumulated deficit			(1,405,603	)			(1,469,861	)
Total stockholders' deficit			(153,546	)			(171,170	)
Total liabilities and stockholders' deficit		$	225,660			$	190,211

Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
		Three Months Ended								Nine Months Ended
		October 31,								October 31,
		2023				2024				2023				2024
Cash flows from operating activities
Net loss		$	(16,413	)		$	(18,761	)		$	(56,884	)		$	(64,258	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			1,636				2,254				4,738				7,117
Non-cash lease expense			1,063				1,142				3,235				3,320
Amortization of contract acquisition costs			4,398				4,454				13,354				13,181
Stock-based compensation			16,369				13,161				47,901				43,776
Loss on extinguishment of debt			-				1,850				-				1,850
Remeasurement of warrant liability			-				456				-				33
Other, net			1,072				2,390				3,643				4,334
Changes in operating assets and liabilities:
Accounts receivable, net			(3,022	)			(8,489	)			23,750				10,020
Contract acquisition costs			(4,016	)			(4,524	)			(10,921	)			(10,328	)
Prepaid expenses and other assets			291				1,543				(173	)			1,819
Accounts payable			998				(11,655	)			(966	)			(152	)
Operating lease liabilities			(1,237	)			(1,392	)			(4,054	)			(4,000	)
Accrued and other liabilities			(608	)			10,238				(3,361	)			6,073
Deferred revenue			(4,856	)			(6,368	)			(23,124	)			(30,756	)
Net cash used in operating activities			(4,325	)			(13,701	)			(2,862	)			(17,971	)
Cash flows from investing activities
Purchases of property and equipment			(2,714	)			(2,515	)			(9,214	)			(7,245	)
Purchases of intangible assets			-				-				(26	)			-
Net cash used in investing activities			(2,714	)			(2,515	)			(9,240	)			(7,245	)
Cash flows from financing activities
Payments of deferred offering costs for registration statement			-				(402	)			-				(402	)
Proceeds from shares issued in connection with employee stock purchase plan			1,374				789				3,406				1,910
Shares repurchased for tax withholdings on vesting of restricted stock			-				(296	)			-				(504	)
Debt proceeds, net of issuance costs			-				52,758				-				52,758
Repayment of debt and related fees			-				(53,177	)			-				(53,177	)
Proceeds from short-term payable financing			-				6,190				-				8,972
Payments on short-term payable financing			-				(4,536	)			-				(4,536	)
Proceeds from exercise of stock options			62				-				65				-
Net cash provided by financing activities			1,436				1,326				3,471				5,021
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(862	)			111				(482	)			181
Net decrease in cash, cash equivalents, and restricted cash			(6,465	)			(14,779	)			(9,113	)			(20,014	)
Cash, cash equivalents, and restricted cash at beginning of period			63,852				55,704				66,500				60,939
Cash, cash equivalents, and restricted cash at end of period		$	57,387			$	40,925			$	57,387			$	40,925

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,
		2023				2024				2023				2024
Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:
Revenue:
Subscription		$	71,293			$	71,113			$	213,594			$	214,144
Cost of revenue:
Subscription			11,523				13,334				33,588				39,410
Subscription gross profit on a GAAP basis			59,770				57,779				180,006				174,734
Subscription gross margin on a GAAP basis			84	%			81	%			84	%			82	%
Stock-based compensation			670				784				1,958				2,389
Subscription gross profit on a non-GAAP basis		$	60,440			$	58,563			$	181,964			$	177,123
Subscription gross margin on a non-GAAP basis			85	%			82	%			85	%			83	%
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		$	72,121			$	70,887			$	223,904			$	224,496
Stock-based compensation			(15,159	)			(11,872	)			(44,116	)			(39,842	)
Amortization of certain intangible assets			(20	)			(142	)			(60	)			(426	)
Executive officer severance			-				-				(1,996	)			-
Total operating expenses on a non-GAAP basis		$	56,942			$	58,873			$	177,732			$	184,228
Reconciliation of Operating Loss on a GAAP Basis to Operating Income (Loss) on a Non-GAAP Basis:
Operating loss on a GAAP basis		$	(11,222	)		$	(11,084	)		$	(41,534	)		$	(47,021	)
Stock-based compensation			16,188				12,951				47,385				43,173
Amortization of certain intangible assets			20				142				60				426
Executive officer severance			-				-				1,996				-
Operating income (loss) on a non-GAAP basis		$	4,986			$	2,009			$	7,907			$	(3,422	)
Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis:
Operating margin on a GAAP basis			(14	)%			(14	)%			(17	)%			(20	)%
Stock-based compensation			20				17				19				19
Executive officer severance			-				-				1				-
Operating margin on a non-GAAP basis			6	%			3	%			3	%			(1	)%
Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis:
Net loss on a GAAP basis		$	(16,413	)		$	(18,761	)		$	(56,884	)		$	(64,258	)
Stock-based compensation			16,369				13,161				47,901				43,776
Amortization of certain intangible assets			20				142				60				426
Executive officer severance			-				-				1,996				-
Loss on extinguishment of debt			-				1,850				-				1,850
Remeasurement of warrant liability			-				455				-				33
Net loss on a non-GAAP basis		$	(24	)		$	(3,153	)		$	(6,927	)		$	(18,173	)
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		$	(0.45	)		$	(0.48	)		$	(1.59	)		$	(1.68	)
Stock-based compensation			0.45				0.34				1.34				1.15
Executive officer severance			—				—				0.06				—
Loss on extinguishment of debt			—				0.05				—				0.05
Remeasurement of warrant liability			—				0.01				—				—
Net loss per share on a non-GAAP basis		$	—			$	(0.08	)		$	(0.19	)		$	(0.48	)
Billings:
Total revenue		$	79,675			$	79,764			$	238,805			$	238,274
Add:
Deferred revenue (end of period)			158,522				153,919				158,522				153,919
Deferred revenue, noncurrent (end of period)			4,236				3,311				4,236				3,311
Less:
Deferred revenue (beginning of period)			(164,882	)			(161,601	)			(182,273	)			(185,250	)
Deferred revenue, noncurrent (beginning of period)			(2,732	)			(1,997	)			(3,609	)			(2,736	)
Decrease in deferred revenue (current and noncurrent)			(4,856	)			(6,368	)			(23,124	)			(30,756	)
Billings		$	74,819			$	73,396			$	215,681			$	207,518
Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow:
Net cash used in operating activities		$	(4,325	)		$	(13,701	)		$	(2,862	)		$	(17,971	)
Proceeds from shares issued in connection with employee stock purchase plan			1,374				789				3,406				1,910
Purchases of property and equipment			(2,714	)			(2,515	)			(9,214	)			(7,245	)
Proceeds from short-term payable financing			-				6,190				-				8,972
Payments on short-term payable financing			-				(4,536	)			-				(4,536	)
Adjusted free cash flow		$	(5,665	)		$	(13,773	)		$	(8,670	)		$	(18,870	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241205261989/en/

Media –

Cynthia Cowen

PR@domo.com

Investors –

Peter Lowry

IR@domo.com

Source: Domo, Inc.

FAQ

What were Domo's Q3 fiscal 2025 revenue and subscription revenue?

Domo's total revenue was $79.8 million, and subscription revenue was $71.1 million.

What is Domo's guidance for Q4 fiscal 2025 revenue?

Domo expects Q4 fiscal 2025 revenue to be between $77.5 million and $78.5 million.

What is Domo's projected non-GAAP net loss per share for Q4 fiscal 2025?

Domo projects a non-GAAP net loss per share of $0.13 to $0.17 for Q4 fiscal 2025.

What is Domo's full-year fiscal 2025 revenue guidance?

Domo expects full-year fiscal 2025 revenue to be between $315.5 million and $316.5 million.

What were Domo's Q3 fiscal 2025 GAAP and non-GAAP net losses per share?

Domo's GAAP net loss per share was $0.48, and non-GAAP net loss per share was $0.08.