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Domo Announces Second Quarter Fiscal 2025 Financial Results

Business Wire 29-Aug-2024 4:05 PM

Domo, Inc. (NASDAQ:DOMO) today announced results for its fiscal second quarter ended July 31, 2024.

Fiscal Second Quarter Results

  • Total revenue was $78.4 million, a decrease of 2% year over year
  • Subscription revenue was $70.9 million
  • Billings were $68.6 million, a decrease of 3% year over year
  • Remaining Performance Obligations (RPO) was $358.9 million as of July 31, 2024
  • Net cash used in operating activities was $6.2 million
  • Adjusted free cash flow was negative $5.6 million
  • GAAP operating margin decreased by 5 percentage points year over year
  • Non-GAAP operating margin decreased by 3 percentage points year over year
  • GAAP net loss was $19.5 million, and GAAP net loss per share was $0.51, based on 38.4 million weighted-average shares outstanding
  • Non-GAAP net loss was $2.7 million, and non-GAAP net loss per share was $0.07, based on 38.4 million weighted-average shares outstanding
  • Cash, cash equivalents, and restricted cash were $55.7 million as of July 31, 2024

"We've made great progress with ecosystem partnerships and consumption customers in Q2, and are already seeing these strategic initiatives deliver exciting new opportunities for Domo," said Josh James, founder and CEO, Domo. "We are now better positioned than ever to compete in today's data and AI landscape, and I'm incredibly optimistic about our future."

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 Business Intelligence and Analytics Technology Value Matrix for the fourth consecutive year. Additionally, Domo and customer, Manulife Financial Corporation, were honored with a 2024 Nucleus Research ROI Award for achieving a total ROI of 184% through the adoption of the Domo platform.
  • Domo was the top-ranked vendor in the Dresner Advisory Services' 2024 Collective Insights report, placing ahead of 14 other vendors, and was named an overall leader in Dresner's 2024 Wisdom of Crowds® Industry Excellence Awards. In addition, Domo was named a leader in the Customer Experience and Vendor Credibility Models and received its eighth consecutive perfect recommendation score in Dresner's 2024 Wisdom of Crowds® Business Intelligence (BI) Market Study in which Domo is ranked as a "High Value/Low TCO" platform.
  • Domo was named to the Q3 2024 Constellation ShortList™ for Multicloud Analytics and Business Intelligence Platforms and the Q3 2024 ShortList for Marketing Analytics Solutions for the ninth consecutive year. In addition, Domo was named to the Q3 2024 Embedded Analytics ShortList.
  • At the Forrester B2B Summit North America 2024, Domo was recognized as a B2B Program of the Year winner for improving functional performance in engagement, set apart for the company's ability to cultivate a user community, Domo Central, that transformed customer relationships through strategic community engagements.
  • Domo was named to the 2024 Parity.Org Best Companies for Women to AdvanceTM, a program recognizing organizations that are creating the culture and conditions in which all employees have an equal opportunity to compete and advance, for the fifth consecutive year.

Business Outlook

Based on information available as of August 29, 2024, Domo is providing the following guidance for its third quarter of fiscal 2025 and full year fiscal 2025:

Q3 Fiscal 2025

  • Revenue is expected to be in the range of $77.0 million to $78.0 million
  • Non-GAAP net loss per share, basic and diluted, is expected to be between $0.14 and $0.18 based on 38.9 million weighted-average shares outstanding, basic and diluted

Full Year Fiscal 2025

  • Revenue is expected to be in the range of $313.0 million to $315.0 million
  • Non-GAAP net loss per share, basic and diluted, is expected to be between $0.69 and $0.77 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 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 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# 13748360 following the completion of the conference call until 11:59 p.m. (ET) September 27, 2024.

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, 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, remeasurement of warrant liability, net change to structured payables, 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 also add back the net change to structured payables 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 third 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 July 31, 2024 expected to be filed with the SEC on or about September 9, 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

 

Six Months Ended

July 31,

 

July 31,

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

Revenue:
Subscription

$

71,211

 

$

70,921

 

$

142,301

 

$

143,031

 

Professional services and other

 

8,461

 

 

7,486

 

 

16,829

 

 

15,479

 

Total revenue

 

79,672

 

 

78,407

 

 

159,130

 

 

158,510

 

Cost of revenue:
Subscription (1)

 

11,453

 

 

13,301

 

 

22,065

 

 

26,076

 

Professional services and other (1)

 

7,637

 

 

6,823

 

 

15,594

 

 

14,762

 

Total cost of revenue

 

19,090

 

 

20,124

 

 

37,659

 

 

40,838

 

Gross profit

 

60,582

 

 

58,283

 

 

121,471

 

 

117,672

 

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

 

41,040

 

 

36,627

 

 

84,202

 

 

78,846

 

Research and development (1)

 

20,767

 

 

21,969

 

 

44,202

 

 

44,688

 

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

 

9,378

 

 

14,174

 

 

23,379

 

 

30,075

 

Total operating expenses

 

71,185

 

 

72,770

 

 

151,783

 

 

153,609

 

Loss from operations

 

(10,603

)

 

(14,487

)

 

(30,312

)

 

(35,937

)

 
Other expense, net (1), (4)

 

(5,124

)

 

(4,752

)

 

(9,619

)

 

(9,183

)

Loss before income taxes

 

(15,727

)

 

(19,239

)

 

(39,931

)

 

(45,120

)

Provision for income taxes

 

341

 

 

251

 

 

540

 

 

377

 

Net loss

$

(16,068

)

$

(19,490

)

$

(40,471

)

$

(45,497

)

 
Net loss per share (basic and diluted)

$

(0.45

)

$

(0.51

)

$

(1.14

)

$

(1.20

)

Weighted-average number of shares (basic and diluted)

 

35,884

 

 

38,389

 

 

35,558

 

 

37,943

 

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

$

670

 

$

807

 

$

1,288

 

$

1,605

 

Professional services and other

 

473

 

 

314

 

 

952

 

 

647

 

Sales and marketing

 

6,166

 

 

5,170

 

 

12,896

 

 

10,484

 

Research and development

 

4,618

 

 

4,069

 

 

9,593

 

 

8,491

 

General and administrative

 

2,960

 

 

5,911

 

 

6,468

 

 

8,995

 

Other expense, net

 

173

 

 

202

 

 

335

 

 

393

 

Total stock-based compensation expenses

$

15,060

 

$

16,473

 

$

31,532

 

$

30,615

 

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

$

20

 

$

142

 

$

40

 

$

284

 

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

$

-

 

$

-

 

$

443

 

$

-

 

General and administrative

 

225

 

 

-

 

 

1,553

 

 

-

 

Total executive officer severance

$

225

 

$

-

 

$

1,996

 

$

-

 

 
(4) Includes remeasurement of warrant liability, as follows:
Other expense, net

$

-

 

$

144

 

$

-

 

$

(422

)

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

January 31,

 

July 31,

 

2024

 

 

 

2024

 

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

$

60,939

 

$

55,704

 

Accounts receivable, net

 

67,197

 

 

48,688

 

Contract acquisition costs

 

16,006

 

 

15,266

 

Prepaid expenses and other current assets

 

9,602

 

 

9,171

 

Total current assets

 

153,744

 

 

128,829

 

 
Property and equipment, net

 

27,003

 

 

27,195

 

Right-of-use assets

 

11,746

 

 

10,942

 

Contract acquisition costs, noncurrent

 

19,542

 

 

17,339

 

Intangible assets, net

 

2,740

 

 

2,409

 

Goodwill

 

9,478

 

 

9,478

 

Other assets

 

1,407

 

 

1,565

 

Total assets

$

225,660

 

$

197,757

 

 
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable

$

4,313

 

$

18,418

 

Accrued expenses and other current liabilities

 

43,430

 

 

39,004

 

Lease liabilities

 

4,807

 

 

5,597

 

Current portion of deferred revenue

 

185,250

 

 

161,601

 

Total current liabilities

 

237,800

 

 

224,620

 

 
Lease liabilities, noncurrent

 

11,135

 

 

9,110

 

Deferred revenue, noncurrent

 

2,736

 

 

1,997

 

Other liabilities, noncurrent

 

14,001

 

 

13,180

 

Long-term debt

 

113,534

 

 

115,211

 

Total liabilities

 

379,206

 

 

364,118

 

 
Commitments and contingencies
 
Convertible preferred stock

 

-

 

 

-

 

Stockholders' deficit:
Common stock

 

37

 

 

38

 

Additional paid-in capital

 

1,252,200

 

 

1,284,781

 

Accumulated other comprehensive loss

 

(180

)

 

(80

)

Accumulated deficit

 

(1,405,603

)

 

(1,451,100

)

Total stockholders' deficit

 

(153,546

)

 

(166,361

)

Total liabilities and stockholders' deficit

$

225,660

 

$

197,757

 

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

Three Months Ended

 

Six Months Ended

July 31,

 

July 31,

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

Cash flows from operating activities
Net loss

$

(16,068

)

$

(19,490

)

$

(40,471

)

$

(45,497

)

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

 

1,611

 

 

2,507

 

 

3,102

 

 

4,863

 

Non-cash lease expense

 

1,023

 

 

1,098

 

 

2,172

 

 

2,178

 

Amortization of contract acquisition costs

 

4,388

 

 

4,426

 

 

8,956

 

 

8,727

 

Stock-based compensation

 

15,060

 

 

16,473

 

 

31,532

 

 

30,615

 

Remeasurement of warrant liability

 

-

 

 

143

 

 

-

 

 

(423

)

Other, net

 

1,054

 

 

886

 

 

2,571

 

 

1,944

 

Changes in operating assets and liabilities:
Accounts receivable, net

 

4,704

 

 

(840

)

 

26,772

 

 

18,509

 

Contract acquisition costs

 

(3,832

)

 

(3,809

)

 

(6,905

)

 

(5,804

)

Prepaid expenses and other assets

 

933

 

 

621

 

 

(464

)

 

276

 

Accounts payable

 

(3,454

)

 

4,825

 

 

(1,964

)

 

11,503

 

Operating lease liabilities

 

(1,220

)

 

(1,328

)

 

(2,817

)

 

(2,608

)

Accrued and other liabilities

 

5,545

 

 

(1,902

)

 

(2,753

)

 

(4,165

)

Deferred revenue

 

(9,109

)

 

(9,781

)

 

(18,268

)

 

(24,388

)

Net cash provided by (used in) operating activities

 

635

 

 

(6,171

)

 

1,463

 

 

(4,270

)

 
Cash flows from investing activities
Purchases of property and equipment

 

(2,924

)

 

(2,204

)

 

(6,500

)

 

(4,730

)

Purchases of intangible assets

 

(26

)

 

-

 

 

(26

)

 

-

 

Net cash used in investing activities

 

(2,950

)

 

(2,204

)

 

(6,526

)

 

(4,730

)

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

 

-

 

 

-

 

 

2,032

 

 

1,121

 

Shares repurchased for tax withholdings on vesting of restricted stock

 

-

 

 

(208

)

 

-

 

 

(208

)

Proceeds from structured payables

 

-

 

 

2,782

 

 

-

 

 

2,782

 

Proceeds from exercise of stock options

 

3

 

 

-

 

 

3

 

 

-

 

Net cash provided by (used in) financing activities

 

3

 

 

2,574

 

 

2,035

 

 

3,695

 

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

 

176

 

 

347

 

 

380

 

 

70

 

Net decrease in cash, cash equivalents, and restricted cash

 

(2,136

)

 

(5,454

)

 

(2,648

)

 

(5,235

)

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

 

65,988

 

 

61,158

 

 

66,500

 

 

60,939

 

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

$

63,852

 

$

55,704

 

$

63,852

 

$

55,704

 

 
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,

 

2023

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

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

$

71,211

 

$

70,921

 

$

142,301

 

$

143,031

 

Cost of revenue:
Subscription

 

11,453

 

 

13,301

 

 

22,065

 

 

26,076

 

Subscription gross profit on a GAAP basis

 

59,758

 

 

57,620

 

 

120,236

 

 

116,955

 

Subscription gross margin on a GAAP basis

 

84

%

 

81

%

 

84

%

 

82

%

 
Stock-based compensation

 

670

 

 

807

 

 

1,288

 

 

1,605

 

Subscription gross profit on a non-GAAP basis

$

60,428

 

$

58,427

 

$

121,524

 

$

118,560

 

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

$

71,185

 

$

72,770

 

$

151,783

 

$

153,609

 

Stock-based compensation

 

(13,744

)

 

(15,150

)

 

(28,957

)

 

(27,970

)

Amortization of certain intangible assets

 

(20

)

 

(142

)

 

(40

)

 

(284

)

Executive officer severance

 

(225

)

 

-

 

 

(1,996

)

 

-

 

Total operating expenses on a non-GAAP basis

$

57,196

 

$

57,478

 

$

120,790

 

$

125,355

 

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

$

(10,603

)

$

(14,487

)

$

(30,312

)

$

(35,937

)

Stock-based compensation

 

14,887

 

 

16,271

 

 

31,197

 

 

30,222

 

Amortization of certain intangible assets

 

20

 

 

142

 

 

40

 

 

284

 

Executive officer severance

 

225

 

 

-

 

 

1,996

 

 

-

 

Operating loss on a non-GAAP basis

$

4,529

 

$

1,926

 

$

2,921

 

$

(5,431

)

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

 

(13

)%

 

(18

)%

 

(19

)%

 

(23

)%

Stock-based compensation

 

19

 

 

20

 

 

20

 

 

20

 

Executive officer severance

 

-

 

 

-

 

 

1

 

 

-

 

Operating margin on a non-GAAP basis

 

6

%

 

2

%

 

2

%

 

(3

)%

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

$

(16,068

)

$

(19,490

)

$

(40,471

)

$

(45,497

)

Stock-based compensation

 

15,060

 

 

16,473

 

 

31,532

 

 

30,615

 

Amortization of certain intangible assets

 

20

 

 

142

 

 

40

 

 

284

 

Executive officer severance

 

225

 

 

-

 

 

1,996

 

 

-

 

Remeasurement of warrant liability

 

-

 

 

144

 

 

-

 

 

(422

)

Net loss on a non-GAAP basis

$

(763

)

$

(2,731

)

$

(6,903

)

$

(15,020

)

 
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

)

$

(0.51

)

$

(1.14

)

$

(1.20

)

Stock-based compensation

 

0.42

 

 

0.43

 

 

0.89

 

 

0.81

 

Executive officer severance

 

0.01

 

 

 

 

0.06

 

 

 

Remeasurement of warrant liability

 

 

 

0.01

 

 

 

 

(0.01

)

Net loss per share on a non-GAAP basis

$

(0.02

)

$

(0.07

)

$

(0.19

)

$

(0.40

)

 
Billings:
Total revenue

$

79,672

 

$

78,407

 

$

159,130

 

$

158,510

 

Add:
Deferred revenue (end of period)

 

164,882

 

 

161,601

 

 

164,882

 

 

161,601

 

Deferred revenue, noncurrent (end of period)

 

2,732

 

 

1,997

 

 

2,732

 

 

1,997

 

Less:
Deferred revenue (beginning of period)

 

(173,646

)

 

(170,813

)

 

(182,273

)

 

(185,250

)

Deferred revenue, noncurrent (beginning of period)

 

(3,077

)

 

(2,566

)

 

(3,609

)

 

(2,736

)

Decrease in deferred revenue (current and noncurrent)

 

(9,109

)

 

(9,781

)

 

(18,268

)

 

(24,388

)

Billings

$

70,563

 

$

68,626

 

$

140,862

 

$

134,122

 

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

$

635

 

$

(6,171

)

$

1,463

 

$

(4,270

)

Proceeds from shares issued in connection with employee stock purchase plan

 

-

 

 

-

 

 

2,032

 

 

1,121

 

Purchases of property and equipment

 

(2,924

)

 

(2,204

)

 

(6,500

)

 

(4,730

)

Proceeds from structured payables

 

-

 

 

2,782

 

 

-

 

 

2,782

 

Adjusted free cash flow

$

(2,289

)

$

(5,593

)

$

(3,005

)

$

(5,097

)

 

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