Domo Announces Second Quarter Fiscal 2024 Financial Results

Domo, Inc. (Nasdaq: DOMO) today announced results for its fiscal second quarter ended July 31, 2023.

Fiscal Second Quarter Results

  • Total revenue was $79.7 million, an increase of 5% year over year
  • Subscription revenue was $71.2 million, an increase of 6% year over year
  • Subscription revenue represented 89% of total revenue
  • Billings were $70.6 million, a decrease of 2% year-over-year
  • Remaining Performance Obligations (RPO) was $357.6 million as of July 31, 2023, an increase of 2% year over year
  • RPO expected to be recognized as revenue in the next 12 months was $232.1 million as of July 31, 2023, an increase of 3% year over year
  • Net cash provided by operating activities was $0.6 million
  • GAAP subscription gross margin was 84%, consistent with Q2 FY23
  • Non-GAAP subscription gross margin was 85%, consistent with Q2 FY23
  • GAAP operating margin increased by 21 percentage points year over year
  • Non-GAAP operating margin increased by 12 percentage points year over year
  • GAAP net loss was $16.1 million, and GAAP net loss per share was $0.45, based on 35.9 million weighted-average shares outstanding
  • Non-GAAP net loss was $0.8 million, and non-GAAP net loss per share was $0.02, based on 35.9 million weighted-average shares outstanding
  • Cash, cash equivalents, and restricted cash were $63.9 million as of July 31, 2023

“Domo’s data experience platform helps companies of all sizes put data to work for everyone so they can multiply their impact on the business with real-time insights and action,” said Josh James, founder and CEO, Domo.

James continued, “I’m excited about the momentum in consumption pricing; we believe this will drive improved relationships with customers and enable meaningful impact to our business model. I’m also thrilled with our advancements in AI and the new possibilities it will deliver for customers to innovate and grow. I feel confident we have the right priorities, roadmap and people to drive Domo’s long-term growth.”

Recent Highlights

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

  • Domo was ranked as the number one vendor in the Dresner Advisory Services’ 2023 Self-Service Business Intelligence (BI) Market Study for the fifth consecutive year, placing ahead of 15 other vendors. In addition, Domo was named an overall leader and received its seventh consecutive perfect recommendation score in Dresner Advisory Services’ 2023 Wisdom of Crowds ® Business Intelligence (BI) Market Study and its Customer Experience and Vendor Credibility Models.
  • Domo announced its placement in the Q2 2023 Constellation Research ShortList™ for Multicloud Analytics and Business Intelligence Platforms (BI) for the eighth consecutive year. Domo was also named to Constellation's first-ever Q2 2023 Embedded Analytics ShortList.
  • For the fourth consecutive year, Domo was named to the 2023 Parity.Org Best Companies for Women to Advance™, which spotlights companies that are committed to supporting women and creating opportunities for them to advance their careers.

Business Outlook

Based on information available as of August 24, 2023, Domo is providing the following guidance for its third fiscal quarter and full year fiscal 2024:

Q3 Fiscal 2024

  • Revenue is expected to be in the range of $78.5 million to $79.5 million
  • Non-GAAP net loss per share, basic and diluted, is expected to be between $0.10 and $0.14 based on 36.3 million weighted-average shares outstanding, basic and diluted

Full Year Fiscal 2024

  • Revenue is expected to be in the range of $316.0 million to $320.0 million, representing year-over-year growth of 2-4%
  • Non-GAAP net loss per share, basic and diluted, is expected to be between $0.39 and $0.47 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 second 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) September 7, 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 Twitter, 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, 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 Twitter account and the @JoshJames Twitter 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 third 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 July 31, 2023 expected to be filed with the SEC on or about September 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 Six Months Ended
July 31, July 31,

 

2022

 

 

2023

 

 

2022

 

 

2023

 

Revenue:
Subscription

$

67,406

 

$

71,211

 

$

131,981

 

$

142,301

 

Professional services and other

 

8,125

 

 

8,461

 

 

18,014

 

 

16,829

 

Total revenue

 

75,531

 

 

79,672

 

 

149,995

 

 

159,130

 

Cost of revenue:
Subscription (1)

 

10,712

 

 

11,453

 

 

21,379

 

 

22,065

 

Professional services and other (1)

 

7,601

 

 

7,637

 

 

14,595

 

 

15,594

 

Total cost of revenue

 

18,313

 

 

19,090

 

 

35,974

 

 

37,659

 

Gross profit

 

57,218

 

 

60,582

 

 

114,021

 

 

121,471

 

 
Operating expenses:
Sales and marketing (1), (3)

 

44,700

 

 

41,040

 

 

90,287

 

 

84,202

 

Research and development (1)

 

25,334

 

 

20,767

 

 

48,525

 

 

44,202

 

General and administrative (1), (2), (3)

 

12,825

 

 

9,378

 

 

29,485

 

 

23,379

 

Total operating expenses

 

82,859

 

 

71,185

 

 

168,297

 

 

151,783

 

Loss from operations

 

(25,641

)

 

(10,603

)

 

(54,276

)

 

(30,312

)

 
Other expense, net (1)

 

(3,286

)

 

(5,124

)

 

(7,351

)

 

(9,619

)

Loss before income taxes

 

(28,927

)

 

(15,727

)

 

(61,627

)

 

(39,931

)

Provision for income taxes

 

212

 

 

341

 

 

400

 

 

540

 

Net loss

$

(29,139

)

$

(16,068

)

$

(62,027

)

$

(40,471

)

 
Net loss per share (basic and diluted)

$

(0.86

)

$

(0.45

)

$

(1.84

)

$

(1.14

)

Weighted-average number of shares (basic and diluted)

 

33,973

 

 

35,884

 

 

33,640

 

 

35,558

 

 
 
(1) Includes stock-based compensation expenses, as follows:
Cost of revenue:
Subscription

$

778

 

$

670

 

$

1,509

 

$

1,288

 

Professional services and other

 

563

 

 

473

 

 

1,031

 

 

952

 

Sales and marketing

 

7,873

 

 

6,166

 

 

15,948

 

 

12,896

 

Research and development

 

6,283

 

 

4,618

 

 

13,287

 

 

9,593

 

General and administrative

 

4,707

 

 

2,960

 

 

13,512

 

 

6,468

 

Other expense, net

 

189

 

 

173

 

 

370

 

 

335

 

Total stock-based compensation expenses

$

20,393

 

$

15,060

 

$

45,657

 

$

31,532

 

 
(2) Includes amortization of certain intangible assets, as follows:
General and administrative

$

20

 

$

20

 

$

40

 

$

40

 

 
(3) Includes executive officer severance, as follows:
Sales and marketing

$

507

 

$

-

 

$

507

 

$

443

 

General and administrative

 

-

 

 

225

 

 

-

 

 

1,553

 

Total executive officer severance

$

507

 

$

225

 

$

507

 

$

1,996

 

 
Domo, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
January 31, July 31,

 

2023

 

 

2023

 

Assets
Current assets:
Cash, cash equivalents, and restricted cash

$

66,500

 

$

63,852

 

Accounts receivable, net

 

78,958

 

 

52,186

 

Contract acquisition costs

 

15,908

 

 

15,867

 

Prepaid expenses and other current assets

 

7,447

 

 

8,053

 

Total current assets

 

168,813

 

 

139,958

 

 
Property and equipment, net

 

21,375

 

 

23,998

 

Right-of-use assets

 

15,255

 

 

13,804

 

Contract acquisition costs, noncurrent

 

22,299

 

 

20,190

 

Intangible assets, net

 

2,794

 

 

2,780

 

Goodwill

 

9,478

 

 

9,478

 

Other assets

 

2,102

 

 

1,892

 

Total assets

$

242,116

 

$

212,100

 

 
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable

$

12,120

 

$

9,155

 

Accrued expenses and other current liabilities

 

49,306

 

 

44,850

 

Lease liabilities

 

4,905

 

 

5,349

 

Current portion of deferred revenue

 

182,273

 

 

164,882

 

Total current liabilities

 

248,604

 

 

224,236

 

 
Lease liabilities, noncurrent

 

15,271

 

 

12,866

 

Deferred revenue, noncurrent

 

3,609

 

 

2,732

 

Other liabilities, noncurrent

 

12,425

 

 

13,105

 

Long-term debt

 

108,607

 

 

111,002

 

Total liabilities

 

388,516

 

 

363,941

 

 
Commitments and contingencies
 
Stockholders' deficit:
Common stock

 

35

 

 

36

 

Additional paid-in capital

 

1,183,921

 

 

1,218,604

 

Accumulated other comprehensive (loss) income

 

(322

)

 

24

 

Accumulated deficit

 

(1,330,034

)

 

(1,370,505

)

Total stockholders' deficit

 

(146,400

)

 

(151,841

)

Total liabilities and stockholders' deficit

$

242,116

 

$

212,100

 

 
Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
Three Months Ended Six Months Ended
July 31, July 31,

 

2022

 

 

2023

 

 

2022

 

 

2023

 

Cash flows from operating activities
Net loss

$

(29,139

)

$

(16,068

)

$

(62,027

)

$

(40,471

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization

 

1,213

 

 

1,611

 

 

2,820

 

 

3,102

 

Non-cash lease expense

 

1,177

 

 

1,023

 

 

2,375

 

 

2,172

 

Amortization of contract acquisition costs

 

4,266

 

 

4,388

 

 

8,578

 

 

8,956

 

Stock-based compensation

 

20,393

 

 

15,060

 

 

45,657

 

 

31,532

 

Other, net

 

972

 

 

1,054

 

 

1,892

 

 

2,571

 

Changes in operating assets and liabilities:
Accounts receivable, net

 

(2,514

)

 

4,704

 

 

15,001

 

 

26,772

 

Contract acquisition costs

 

(4,079

)

 

(3,832

)

 

(7,282

)

 

(6,905

)

Prepaid expenses and other assets

 

6,584

 

 

933

 

 

781

 

 

(464

)

Accounts payable

 

4,822

 

 

(3,454

)

 

12,907

 

 

(1,964

)

Operating lease liabilities

 

(1,637

)

 

(1,220

)

 

(2,139

)

 

(2,817

)

Accrued and other liabilities

 

(1,213

)

 

5,545

 

 

(15,399

)

 

(2,753

)

Deferred revenue

 

(3,203

)

 

(9,109

)

 

(4,741

)

 

(18,268

)

Net cash (used in) provided by operating activities

 

(2,358

)

 

635

 

 

(1,577

)

 

1,463

 

 
Cash flows from investing activities
Purchases of property and equipment

 

(1,479

)

 

(2,924

)

 

(3,416

)

 

(6,500

)

Purchases of intangible assets

 

-

 

 

(26

)

 

-

 

 

(26

)

Net cash used in investing activities

 

(1,479

)

 

(2,950

)

 

(3,416

)

 

(6,526

)

 
Cash flows from financing activities
Proceeds from shares issued in connection with employee stock purchase plan

 

-

 

 

-

 

 

1,563

 

 

2,032

 

Proceeds from exercise of stock options

 

81

 

 

3

 

 

805

 

 

3

 

Net cash provided by financing activities

 

81

 

 

3

 

 

2,368

 

 

2,035

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

(345

)

 

176

 

 

(1,042

)

 

380

 

Net decrease in cash, cash equivalents, and restricted cash

 

(4,101

)

 

(2,136

)

 

(3,667

)

 

(2,648

)

Cash, cash equivalents, and restricted cash at beginning of period

 

83,995

 

 

65,988

 

 

83,561

 

 

66,500

 

Cash, cash equivalents, and restricted cash at end of period

$

79,894

 

$

63,852

 

$

79,894

 

$

63,852

 

 
Domo, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)
 
Three Months Ended Six Months Ended
July 31, July 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

$

67,406

 

$

71,211

 

$

131,981

 

$

142,301

 

Cost of revenue:
Subscription

 

10,712

 

 

11,453

 

 

21,379

 

 

22,065

 

Subscription gross profit on a GAAP basis

 

56,694

 

 

59,758

 

 

110,602

 

 

120,236

 

Subscription gross margin on a GAAP basis

 

84

%

 

84

%

 

84

%

 

84

%

 
Stock-based compensation

 

778

 

 

670

 

 

1,509

 

 

1,288

 

Subscription gross profit on a non-GAAP basis

$

57,472

 

$

60,428

 

$

112,111

 

$

121,524

 

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

$

82,859

 

$

71,185

 

$

168,297

 

$

151,783

 

Stock-based compensation

 

(18,863

)

 

(13,744

)

 

(42,747

)

 

(28,957

)

Amortization of certain intangible assets

 

(20

)

 

(20

)

 

(40

)

 

(40

)

Executive officer severance (1)

 

(507

)

 

(225

)

 

(507

)

 

(1,996

)

Total operating expenses on a non-GAAP basis

$

63,469

 

$

57,196

 

$

125,003

 

$

120,790

 

 
Reconciliation of Operating (Loss) Income on a GAAP Basis to Operating Loss on a Non-GAAP Basis:
Operating loss on a GAAP basis

$

(25,641

)

$

(10,603

)

$

(54,276

)

$

(30,312

)

Stock-based compensation

 

20,204

 

 

14,887

 

 

45,287

 

 

31,197

 

Amortization of certain intangible assets

 

20

 

 

20

 

 

40

 

 

40

 

Executive officer severance (1)

 

507

 

 

225

 

 

507

 

 

1,996

 

Operating (loss) income on a non-GAAP basis

$

(4,910

)

$

4,529

 

$

(8,442

)

$

2,921

 

 
Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis:
Operating margin on a GAAP basis

 

(34

)%

 

(13

)%

 

(36

)%

 

(19

)%

Stock-based compensation

 

26

 

 

19

 

 

30

 

 

20

 

Executive officer severance (1)

 

1

 

 

-

 

 

-

 

 

1

 

Operating margin on a non-GAAP basis

 

(7

)%

 

6

%

 

(6

)%

 

2

%

 
Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis:
Net loss on a GAAP basis

$

(29,139

)

$

(16,068

)

$

(62,027

)

$

(40,471

)

Stock-based compensation

 

20,393

 

 

15,060

 

 

45,657

 

 

31,532

 

Amortization of certain intangible assets

 

20

 

 

20

 

 

40

 

 

40

 

Executive officer severance (1)

 

507

 

 

225

 

 

507

 

 

1,996

 

Net loss on a non-GAAP basis

$

(8,219

)

$

(763

)

$

(15,823

)

$

(6,903

)

 
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

$

(0.86

)

$

(0.45

)

$

(1.84

)

$

(1.14

)

Stock-based compensation

 

0.60

 

 

0.42

 

 

1.36

 

 

0.89

 

Executive officer severance (1)

 

0.01

 

 

0.01

 

 

0.02

 

 

0.06

 

Net loss per share on a non-GAAP basis

$

(0.25

)

$

(0.02

)

$

(0.46

)

$

(0.19

)

 
Billings:
Total revenue

$

75,531

 

$

79,672

 

$

149,995

 

$

159,130

 

Add:
Deferred revenue (end of period)

 

163,454

 

 

164,882

 

 

163,454

 

 

164,882

 

Deferred revenue, noncurrent (end of period)

 

2,560

 

 

2,732

 

 

2,560

 

 

2,732

 

Less:
Deferred revenue (beginning of period)

 

(167,091

)

 

(173,646

)

 

(168,335

)

 

(182,273

)

Deferred revenue, noncurrent (beginning of period)

 

(2,126

)

 

(3,077

)

 

(2,420

)

 

(3,609

)

Decrease in deferred revenue (current and noncurrent)

 

(3,203

)

 

(9,109

)

 

(4,741

)

 

(18,268

)

Billings

$

72,328

 

$

70,563

 

$

145,254

 

$

140,862

 

 
Reconciliation of Net Cash (Used in) Provided by Operating Activities to Adjusted Free Cash Flow:
Net cash (used in) provided by operating activities

$

(2,358

)

$

635

 

$

(1,577

)

$

1,463

 

Proceeds from shares issued in connection with employee stock purchase plan

 

-

 

 

-

 

 

1,563

 

 

2,032

 

Purchases of property and equipment

 

(1,479

)

 

(2,924

)

 

(3,416

)

 

(6,500

)

Adjusted free cash flow

$

(3,837

)

$

(2,289

)

$

(3,430

)

$

(3,005

)

(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.

 

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