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Domo Announces Third Quarter Fiscal 2023 Financial Results

Domo, Inc. (Nasdaq: DOMO) today announced results for its fiscal third quarter ended October 31, 2022.

Fiscal Third Quarter Results

  • Total revenue was $79.0 million, an increase of 21% year over year
  • Subscription revenue was $69.0 million, an increase of 22% year over year
  • Subscription revenue represented 87% of total revenue
  • Billings were $74.0 million or 5% year-over-year growth
  • Remaining Performance Obligations (RPO) was $354.3 million as of October 31, 2022, an increase of 19% year over year
  • RPO expected to be recognized as revenue in the next twelve months was $230.3 million as of October 31, 2022, an increase of 21% year over year
  • Net cash used in operating activities was $6.5 million
  • GAAP subscription gross margin was 84%, an improvement of 2 percentage points from Q3 FY22
  • Non-GAAP subscription gross margin was 85%, an improvement of 2 percentage points from Q3 FY22
  • GAAP operating margin increased by 15 percentage points year over year
  • Non-GAAP operating margin increased by 11 percentage points year over year
  • GAAP net loss was $23.7 million, and GAAP net loss per share was $0.69, based on 34.4 million weighted-average shares outstanding
  • Non-GAAP net loss was $4.5 million, and non-GAAP net loss per share was $0.13, based on 34.4 million weighted-average shares outstanding
  • Cash, cash equivalents, and restricted cash were $71.1 million as of October 31, 2022

“Domo helps companies of all sizes better leverage data so every employee can be a multiplier of business impact,” said John Mellor, CEO, Domo. “I'm proud of the team for their continued focus on delivering customer value while operating the business with efficiency. Based on the size and health of the pipeline and the strong demand at the top of the funnel, we remain bullish on our long-term prospects.”

Domo also announced today that Bruce Felt is transitioning out as the company's Chief Financial Officer. Felt will remain in his current role until a successor is named. He is also an active member of the search team to find a replacement and is committed to a seamless transition once his successor is identified. Domo has initiated an executive search with the assistance of Heidrick & Struggles, a leading executive search firm.

Mellor remarked, “On behalf of everyone at Domo, I would like to thank Bruce for his many contributions to our company as CFO. He has played an important role in advancing our strategy, elevating our finance function and successfully navigating us through the pandemic. His leadership has put the company in a place where this change can occur without disruption to our customers, internal operations or other finance functions. We wish him all the best in his next chapter and appreciate his continued support during the transition period.”

Felt said, “The last eight years have been among the most rewarding for me professionally, and I am grateful to the Domo Board and leadership team for their collaboration and partnership. I’m proud of all that we have accomplished together and have enormous confidence in Domo’s continued success.”

Recent Highlights

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

  • Domo was named “Customers’ Choice” in Gartner® Peer Insights™ Voice of the Customer Report for Analytics and Business Intelligence Platforms
  • Domo was named a Leader in Nucleus Research’s 2022 Embedded Analytics Technology Value Matrix
  • Domo was named with customer Walker Edison as a 2022 Nucleus ROI Winner
  • Domo was ranked as a Technology and a Credibility Leader in Dresner Advisory Services' 2022 Small and Mid-Sized Enterprise Business Intelligence Market Study
  • Domo was named to the Constellation ShortLists™ for Cloud-Based BI and Analytics Platforms and Marketing Analytics Solutions

Business Outlook

Based on information available as of December 8, 2022, Domo is providing the following guidance for its fourth fiscal quarter and full year fiscal 2023:

Q4 Fiscal 2023

  • Revenue is expected to be in the range of $77.0 million to $78.0 million
  • Non-GAAP net loss per share is expected to be between $0.07 and $0.11 based on 34.7 million weighted-average shares outstanding

Full Year Fiscal 2023

  • Revenue is expected to be in the range of $306.0 million to $307.0 million
  • Non-GAAP net loss per share is expected to be between $0.68 and $0.72 based on 34.1 million weighted-average shares outstanding

We have not reconciled guidance for non-GAAP metrics to their most directly comparable GAAP measures because such 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 2023 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/zYvDlnjs. 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 22, 2022.

About Domo

Domo transforms business by putting data to work for everyone. Domo’s low-code data app platform goes beyond traditional business intelligence and analytics to enable anyone to create data apps to power any action in their business, right where work gets done. With Domo’s fully integrated cloud-native platform, critical business processes can now be optimized in days instead of months or more. 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, 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 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, the reversal of contingent tax-related accruals and proceeds from shares issued in connection with 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.

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 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 regarding our future growth, demand for our products and services, our financial outlook for our fourth fiscal quarter and full fiscal year 2023, 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 U.S. Securities and Exchange Commission, including, without limitation, the Annual Report on Form 10-K filed with the SEC on April 1, 2021 and the Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2022 expected to be filed with the SEC on or about December 12, 2022. 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,

2021

2022

2021

2022

Revenue:
Subscription

$

56,621

 

$

69,041

 

$

163,399

 

$

201,022

 

Professional services and other

 

8,460

 

 

9,985

 

 

24,569

 

 

27,999

 

Total revenue

 

65,081

 

 

79,026

 

 

187,968

 

 

229,021

 

Cost of revenue:
Subscription (1)

 

10,514

 

 

11,342

 

 

29,590

 

 

32,721

 

Professional services and other (1)

 

6,630

 

 

7,572

 

 

19,030

 

 

22,167

 

Total cost of revenue

 

17,144

 

 

18,914

 

 

48,620

 

 

54,888

 

Gross profit

 

47,937

 

 

60,112

 

 

139,348

 

 

174,133

 

 
Operating expenses:
Sales and marketing (1)

 

37,503

 

 

41,012

 

 

104,335

 

 

131,299

 

Research and development (1)

 

21,984

 

 

24,583

 

 

57,511

 

 

73,108

 

General and administrative (1), (2)

 

13,430

 

 

13,029

 

 

36,032

 

 

42,514

 

Total operating expenses

 

72,917

 

 

78,624

 

 

197,878

 

 

246,921

 

Loss from operations

 

(24,980

)

 

(18,512

)

 

(58,530

)

 

(72,788

)

 
Other expense, net (1)

 

(3,471

)

 

(5,032

)

 

(10,238

)

 

(12,383

)

Loss before income taxes

 

(28,451

)

 

(23,544

)

 

(68,768

)

 

(85,171

)

Provision for income taxes

 

62

 

 

167

 

 

89

 

 

567

 

Net loss

$

(28,513

)

$

(23,711

)

$

(68,857

)

$

(85,738

)

 
Net loss per share (basic and diluted)

$

(0.88

)

$

(0.69

)

$

(2.17

)

$

(2.53

)

Weighted-average number of shares (basic and diluted)

 

32,363

 

 

34,392

 

 

31,758

 

 

33,893

 

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

$

800

 

$

667

 

$

1,768

 

$

2,176

 

Professional services and other

 

563

 

 

308

 

 

1,168

 

 

1,339

 

Sales and marketing

 

6,718

 

 

7,336

 

 

15,192

 

 

23,284

 

Research and development

 

5,363

 

 

5,909

 

 

10,603

 

 

19,196

 

General and administrative

 

4,543

 

 

4,807

 

 

11,596

 

 

18,319

 

Other expense, net

 

176

 

 

180

 

 

524

 

 

550

 

Total stock-based compensation expenses

$

18,163

 

$

19,207

 

$

40,851

 

$

64,864

 

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

$

20

 

$

20

 

$

60

 

$

60

 

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

2022

2022

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

$

83,561

 

$

71,082

 

Accounts receivable, net

 

64,149

 

 

53,314

 

Contract acquisition costs

 

15,417

 

 

15,146

 

Prepaid expenses and other current assets

 

9,975

 

 

7,457

 

Total current assets

 

173,102

 

 

146,999

 

 
Property and equipment, net

 

17,584

 

 

19,834

 

Right-of-use assets

 

16,392

 

 

14,871

 

Contract acquisition costs, noncurrent

 

23,177

 

 

21,390

 

Intangible assets, net

 

2,875

 

 

2,814

 

Goodwill

 

9,478

 

 

9,478

 

Other assets

 

1,981

 

 

1,945

 

Total assets

$

244,589

 

$

217,331

 

 
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable

$

4,770

 

$

17,843

 

Accrued expenses and other current liabilities

 

59,976

 

 

45,928

 

Lease liabilities

 

3,439

 

 

4,062

 

Current portion of deferred revenue

 

168,335

 

 

157,915

 

Total current liabilities

 

236,520

 

 

225,748

 

 
Lease liabilities, noncurrent

 

16,757

 

 

15,239

 

Deferred revenue, noncurrent

 

2,420

 

 

3,100

 

Other liabilities, noncurrent

 

10,882

 

 

11,945

 

Long-term debt

 

103,988

 

 

107,424

 

Total liabilities

 

370,567

 

 

363,456

 

 
Commitments and contingencies
 
Stockholders' deficit:
Common stock

 

33

 

 

34

 

Additional paid-in capital

 

1,098,084

 

 

1,165,522

 

Accumulated other comprehensive income

 

388

 

 

(1,460

)

Accumulated deficit

 

(1,224,483

)

 

(1,310,221

)

Total stockholders' deficit

 

(125,978

)

 

(146,125

)

Total liabilities and stockholders' deficit

$

244,589

 

$

217,331

 

Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 

Three Months Ended

 

Nine Months Ended

October 31,

 

October 31,

2021

 

2022

 

2021

 

2022

Cash flows from operating activities
Net loss

$

(28,513

)

$

(23,711

)

$

(68,857

)

$

(85,738

)

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

 

1,533

 

 

1,269

 

 

3,789

 

 

4,089

 

Non-cash lease expense

 

1,224

 

 

987

 

 

3,540

 

 

3,362

 

Amortization of contract acquisition costs

 

3,944

 

 

4,247

 

 

11,779

 

 

12,825

 

Stock-based compensation

 

18,163

 

 

19,207

 

 

40,851

 

 

64,864

 

Other, net

 

877

 

 

1,135

 

 

2,663

 

 

3,027

 

Changes in operating assets and liabilities:
Accounts receivable, net

 

(7,746

)

 

(4,166

)

 

9,377

 

 

10,835

 

Contract acquisition costs

 

(4,354

)

 

(4,405

)

 

(11,719

)

 

(11,687

)

Prepaid expenses and other assets

 

664

 

 

1,282

 

 

4,949

 

 

2,063

 

Accounts payable

 

4,652

 

 

384

 

 

10,965

 

 

13,291

 

Operating lease liabilities

 

(669

)

 

(1,239

)

 

(2,380

)

 

(3,378

)

Accrued and other liabilities

 

5,131

 

 

3,527

 

 

(5,972

)

 

(11,872

)

Deferred revenue

 

5,123

 

 

(4,999

)

 

485

 

 

(9,740

)

Net cash provided by (used in) operating activities

 

29

 

 

(6,482

)

 

(530

)

 

(8,059

)

 
Cash flows from investing activities
Purchases of property and equipment

 

(1,547

)

 

(1,657

)

 

(4,965

)

 

(5,073

)

Net cash used in investing activities

 

(1,547

)

 

(1,657

)

 

(4,965

)

 

(5,073

)

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

 

-

 

 

-

 

 

4,133

 

 

1,563

 

Shares repurchased for tax withholdings on vesting of restricted stock

 

(1,280

)

 

-

 

 

(8,858

)

 

-

 

Proceeds from structured payables

 

-

 

 

6,624

 

 

-

 

 

6,624

 

Payments on structured payables

 

-

 

 

(6,624

)

 

-

 

 

(6,624

)

Proceeds from exercise of stock options

 

745

 

 

56

 

 

3,908

 

 

861

 

Net cash (used in) provided by financing activities

 

(535

)

 

56

 

 

(817

)

 

2,424

 

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

 

(75

)

 

(729

)

 

(237

)

 

(1,771

)

Net decrease in cash, cash equivalents, and restricted cash

 

(2,128

)

 

(8,812

)

 

(6,549

)

 

(12,479

)

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

 

86,373

 

 

79,894

 

 

90,794

 

 

83,561

 

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

$

84,245

 

$

71,082

 

$

84,245

 

$

71,082

 

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,

2021

2022

2021

2022

Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:
Revenue:
Subscription

$

56,621

 

$

69,041

 

$

163,399

 

$

201,022

 

Cost of revenue:
Subscription

 

10,514

 

 

11,342

 

 

29,590

 

 

32,721

 

Subscription gross profit on a GAAP basis

 

46,107

 

 

57,699

 

 

133,809

 

 

168,301

 

Subscription gross margin on a GAAP basis

 

81

%

 

84

%

 

82

%

 

84

%

 
Stock-based compensation

 

800

 

 

667

 

 

1,768

 

 

2,176

 

Subscription gross profit on a non-GAAP basis

$

46,907

 

$

58,366

 

$

135,577

 

$

170,477

 

Subscription gross margin on a non-GAAP basis

 

83

%

 

85

%

 

83

%

 

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

$

72,917

 

$

78,624

 

$

197,878

 

$

246,921

 

Stock-based compensation

 

(16,624

)

 

(18,052

)

 

(37,391

)

 

(60,799

)

Amortization of certain intangible assets

 

(20

)

 

(20

)

 

(60

)

 

(60

)

Total operating expenses on a non-GAAP basis

$

56,273

 

$

60,552

 

$

160,427

 

$

186,062

 

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

$

(24,980

)

$

(18,512

)

$

(58,530

)

$

(72,788

)

Stock-based compensation

 

17,987

 

 

19,027

 

 

40,327

 

 

64,314

 

Amortization of certain intangible assets

 

20

 

 

20

 

 

60

 

 

60

 

Operating (loss) income on a non-GAAP basis

$

(6,973

)

$

535

 

$

(18,143

)

$

(8,414

)

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

 

(38

)%

 

(23

)%

 

(31

)%

 

(32

)%

Stock-based compensation

 

27

 

 

24

 

 

21

 

 

28

 

Operating margin on a non-GAAP basis

 

(11

)%

 

1

%

 

(10

)%

 

(4

)%

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

$

(28,513

)

$

(23,711

)

$

(68,857

)

$

(85,738

)

Stock-based compensation

 

18,163

 

 

19,207

 

 

40,851

 

 

64,864

 

Amortization of certain intangible assets

 

20

 

 

20

 

 

60

 

 

60

 

Net loss on a non-GAAP basis

$

(10,330

)

$

(4,484

)

$

(27,946

)

$

(20,814

)

 
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

$

(0.88

)

$

(0.69

)

$

(2.17

)

$

(2.53

)

Stock-based compensation

 

0.56

 

 

0.56

 

 

1.29

 

 

1.92

 

Net loss per share on a non-GAAP basis

$

(0.32

)

$

(0.13

)

$

(0.88

)

$

(0.61

)

 
Billings:
Total revenue

$

65,081

 

$

79,026

 

$

187,968

 

$

229,021

 

Add:
Deferred revenue (end of period)

 

130,385

 

 

157,915

 

 

130,385

 

 

157,915

 

Deferred revenue, noncurrent (end of period)

 

2,352

 

 

3,100

 

 

2,352

 

 

3,100

 

Less:
Deferred revenue (beginning of period)

 

(126,381

)

 

(163,454

)

 

(129,079

)

 

(168,335

)

Deferred revenue, noncurrent (beginning of period)

 

(1,233

)

 

(2,560

)

 

(3,173

)

 

(2,420

)

Increase (decrease) in deferred revenue (current and noncurrent)

 

5,123

 

 

(4,999

)

 

485

 

 

(9,740

)

Billings

$

70,204

 

$

74,027

 

$

188,453

 

$

219,281

 

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

$

29

 

$

(6,482

)

$

(530

)

$

(8,059

)

Proceeds from shares issued in connection with employee stock purchase plan

 

-

 

 

-

 

 

4,133

 

 

1,563

 

Purchases of property and equipment

 

(1,547

)

 

(1,657

)

 

(4,965

)

 

(5,073

)

Adjusted free cash flow

$

(1,518

)

$

(8,139

)

$

(1,362

)

$

(11,569

)

 

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