DOMO - Domo Announces First Quarter Fiscal 2024 Financial Results

May, 25 2023 04:05 PM Domo Inc.

Domo, Inc. (Nasdaq: DOMO) today announced results for its fiscal first quarter ended April 30, 2023.

Fiscal First Quarter Results

Total revenue was $79.5 million, an increase of 7% year over year
Subscription revenue was $71.1 million, an increase of 10% year over year
Subscription revenue represented 89% of total revenue
Billings were $70.3 million, a decrease of 4% year-over-year
Remaining Performance Obligations (RPO) was $356.7 million as of April 30, 2023, an increase of 1% year over year
RPO expected to be recognized as revenue in the next 12 months was $237.5 million as of April 30, 2023, an increase of 6% year over year
Net cash provided by operating activities was $0.8 million
GAAP subscription gross margin was 85%, an improvement of 2 percentage points from Q1 FY23
Non-GAAP subscription gross margin was 86%, an improvement of 1 percentage point from Q1 FY23
GAAP operating margin increased by 14 percentage points year over year
Non-GAAP operating margin increased by 3 percentage points year over year
GAAP net loss was $24.4 million, and GAAP net loss per share was $0.69, based on 35.2 million weighted-average shares outstanding
Non-GAAP net loss was $6.1 million, and non-GAAP net loss per share was $0.17, based on 35.2 million weighted-average shares outstanding
Cash, cash equivalents, and restricted cash were $66.0 million as of April 30, 2023

“Domo helps companies of all sizes capitalize on the full potential of their data by empowering each employee to be a multiplier of business impact,” said Josh James, founder and CEO, Domo. “A relentless focus on customers is central to our plan to return to growth, and the feedback is extremely positive as we build momentum with businesses around the world. We have the right product, market opportunity and sales capacity to grow, and I am very confident in 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 2023 Analytics Technology Value Matrix.
Domo was the number one vendor in Dresner Advisory Services' 2023 Cloud Computing and Business Intelligence Market Study for the seventh consecutive year.
Domo announced its sixth consecutive inclusion to the Women Tech Council (WTC) Shatter List, an annual recognition that showcases technology companies that are pushing towards breaking the glass ceiling for women in tech.

Business Outlook

Based on information available as of May 25, 2023, Domo is providing the following guidance for its second fiscal quarter and full year fiscal 2024:

Q2 Fiscal 2024

Revenue is expected to be in the range of $78.5 million to $79.5 million
Non-GAAP net loss per share is expected to be between $0.07 and $0.11 based on 35.9 million weighted-average shares outstanding

Full Year Fiscal 2024

Revenue is expected to be in the range of $323.0 million to $330.0 million
Non-GAAP net loss per share is expected to be between $0.27 and $0.39 based on 36.1 million weighted-average shares outstanding

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 first 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 www.domo.com/IR . Participants can register for the call in advance by visiting https://conferencingportals.com/event/KXmAAKYw . 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) June 8, 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 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, 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 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.

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 second 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 April 30, 2023 expected to be filed with the SEC on or about June 9, 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


April 30,



2022



2023

Revenue:




Subscription

$
64,575


$
71,090

Professional services and other


9,889



8,368

Total revenue


74,464



79,458

Cost of revenue:




Subscription (1)


10,667



10,612

Professional services and other (1)


6,994



7,957

Total cost of revenue


17,661



18,569

Gross profit


56,803



60,889






Operating expenses:




Sales and marketing (1), (3)


45,587



43,162

Research and development (1)


23,191



23,435

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


16,660



14,001

Total operating expenses


85,438



80,598

Loss from operations


(28,635
)


(19,709
)





Other expense, net (1)


(4,065
)


(4,495
)
Loss before income taxes


(32,700
)


(24,204
)
Provision for income taxes


188



199

Net loss

$
(32,888
)

$
(24,403
)





Net loss per share (basic and diluted)

$
(0.99
)

$
(0.69
)
Weighted-average number of shares (basic and diluted)


33,295



35,222











(1) Includes stock-based compensation expenses, as follows:




Cost of revenue:




Subscription

$
731


$
618

Professional services and other


468



479

Sales and marketing


8,075



6,730

Research and development


7,004



4,975

General and administrative


8,805



3,508

Other expense, net


181



162

Total stock-based compensation expenses

$
25,264


$
16,472






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




General and administrative

$
20


$
20






(3) Includes executive officer severance, as follows:




Sales and marketing


-



443

General and administrative


-



1,328

Total executive officer severance

$
-


$
1,771

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







January 31,

April 30,



2023



2023

Assets




Current assets:




Cash, cash equivalents, and restricted cash

$
66,500


$
65,988

Accounts receivable, net


78,958



56,890

Contract acquisition costs


15,908



15,694

Prepaid expenses and other current assets


7,447



8,441

Total current assets


168,813



147,013






Property and equipment, net


21,375



22,160

Right-of-use assets


15,255



14,406

Contract acquisition costs, noncurrent


22,299



20,906

Intangible assets, net


2,794



2,774

Goodwill


9,478



9,478

Other assets


2,102



2,453

Total assets

$
242,116


$
219,190






Liabilities and stockholders' deficit




Current liabilities:




Accounts payable

$
12,120


$
12,452

Accrued expenses and other current liabilities


49,306



39,656

Lease liabilities


4,905



4,912

Current portion of deferred revenue


182,273



173,646

Total current liabilities


248,604



230,666






Lease liabilities, noncurrent


15,271



14,101

Deferred revenue, noncurrent


3,609



3,077

Other liabilities, noncurrent


12,425



12,741

Long-term debt


108,607



109,774

Total liabilities


388,516



370,359






Commitments and contingencies









Stockholders' deficit:




Common stock


35



35

Additional paid-in capital


1,183,921



1,203,375

Accumulated other comprehensive loss


(322
)


(142
)
Accumulated deficit


(1,330,034
)


(1,354,437
)
Total stockholders' deficit


(146,400
)


(151,169
)
Total liabilities and stockholders' deficit

$
242,116


$
219,190

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







Three Months Ended


April 30,



2022



2023

Cash flows from operating activities




Net loss

$
(32,888
)

$
(24,403
)
Adjustments to reconcile net loss to net cash provided by operating activities:




Depreciation and amortization


1,607



1,491

Non-cash lease expense


1,198



1,149

Amortization of contract acquisition costs


4,312



4,568

Stock-based compensation


25,264



16,472

Other, net


920



1,517

Changes in operating assets and liabilities:




Accounts receivable, net


17,515



22,068

Contract acquisition costs


(3,203
)


(3,073
)
Prepaid expenses and other assets


(5,803
)


(1,397
)
Accounts payable


8,085



1,490

Operating lease liabilities


(502
)


(1,597
)
Accrued and other liabilities


(14,186
)


(8,298
)
Deferred revenue


(1,538
)


(9,159
)
Net cash provided by operating activities


781



828






Cash flows from investing activities




Purchases of property and equipment


(1,937
)


(3,576
)
Net cash used in investing activities


(1,937
)


(3,576
)





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


724



-

Net cash provided by financing activities


2,287



2,032

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


(697
)


204

Net increase (decrease) in cash, cash equivalents, and restricted cash


434



(512
)
Cash, cash equivalents, and restricted cash at beginning of period


83,561



66,500

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

$
83,995


$
65,988

Domo, Inc.
Reconciliation of Non-GAAP Financial Measures
*(in thousands, except per share data)*
*(unaudited)*







Three Months Ended


April 30,


2022

2023
Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:




Revenue:




Subscription

$
64,575


$
71,090

Cost of revenue:




Subscription


10,667



10,612

Subscription gross profit on a GAAP basis


53,908



60,478

Subscription gross margin on a GAAP basis


83
%


85
%





Stock-based compensation


731



618

Subscription gross profit on a non-GAAP basis

$
54,639


$
61,096

Subscription gross margin on a non-GAAP basis


85
%


86
%





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

$
85,438


$
80,598

Stock-based compensation


(23,884
)


(15,213
)
Amortization of certain intangible assets


(20
)


(20
)
Executive officer severance


-



(1,771
)
Total operating expenses on a non-GAAP basis

$
61,534


$
63,594






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




Operating loss on a GAAP basis

$
(28,635
)

$
(19,709
)
Stock-based compensation


25,083



16,310

Amortization of certain intangible assets


20



20

Executive officer severance


-



1,771

Operating loss on a non-GAAP basis

$
(3,532
)

$
(1,608
)





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




Operating margin on a GAAP basis


(38
)%


(25
)%
Stock-based compensation


33



21

Executive officer severance


-



2

Operating margin on a non-GAAP basis


(5
)%


(2
)%





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




Net loss on a GAAP basis

$
(32,888
)

$
(24,403
)
Stock-based compensation


25,264



16,472

Amortization of certain intangible assets


20



20

Executive officer severance


-



1,771

Net loss on a non-GAAP basis

$
(7,604
)

$
(6,140
)





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

$
(0.99
)

$
(0.69
)
Stock-based compensation


0.76



0.47

Executive officer severance


-



0.05

Net loss per share on a non-GAAP basis

$
(0.23
)

$
(0.17
)





Billings:




Total revenue

$
74,464


$
79,458

Add:




Deferred revenue (end of period)


167,091



173,646

Deferred revenue, noncurrent (end of period)


2,126



3,077

Less:




Deferred revenue (beginning of period)


(168,335
)


(182,273
)
Deferred revenue, noncurrent (beginning of period)


(2,420
)


(3,609
)
Decrease in deferred revenue (current and noncurrent)


(1,538
)


(9,159
)
Billings

$
72,926


$
70,299






Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow:




Net cash provided by operating activities

$
781


$
828

Proceeds from shares issued in connection with employee stock purchase plan


1,563



2,032

Purchases of property and equipment


(1,937
)


(3,576
)
Adjusted free cash flow

$
407


$
(716
)

View source version on businesswire.com: https://www.businesswire.com/news/home/20230525005042/en/

Media –
Cynthia Cowen
PR@domo.com

Investors –
Peter Lowry
IR@domo.com

Company Name:	Domo Inc.
Stock Symbol:	DOMO
Market:	NASDAQ
Website:	domo.com