Domo Announces Third Quarter Fiscal 2025 Financial Results

Business Wire

Thu, Dec 5, 2024, 2:05 PM 12 min read

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	)