Domo Announces Second Quarter Fiscal 2023 Financial Results
08/25/2022 - 04:05 PM
SILICON SLOPES, Utah --(BUSINESS WIRE)--
Domo, Inc. (Nasdaq: DOMO) today announced results for its fiscal second quarter ended July 31, 2022 .
Fiscal Second Quarter Results
Total revenue was $75.5 million , an increase of 20% year over year
Subscription revenue was $67.4 million , an increase of 23% year over year
Subscription revenue represented 89% of total revenue
Billings were $72.3 million or 21% year-over-year growth
Remaining Performance Obligations (RPO) was $349.1 million as of July 31, 2022 , an increase of 22% year over year
RPO expected to be recognized as revenue in the next twelve months was $225.3 million as of July 31, 2022 , an increase of 23% year over year
Net cash used in operating activities was $2.4 million
GAAP subscription gross margin was 84% , an improvement of 2 percentage points from Q2 FY22
Non-GAAP subscription gross margin was 85% , an improvement of 3 percentage points from Q2 FY22
GAAP operating margin declined by 4 percentage points year over year
Non-GAAP operating margin increased by 3 percentage points year over year
GAAP net loss was $29.1 million , and GAAP net loss per share was $0.86 , based on 34.0 million weighted-average shares outstanding
Non-GAAP net loss was $8.7 million , and non-GAAP net loss per share was $0.26 , based on 34.0 million weighted-average shares outstanding
Cash and cash equivalents were $79.9 million as of July 31, 2022
“Domo is helping companies of all sizes leverage data across their organizations to increase revenue, improve efficiencies and drive better business outcomes — all at incredible speed,” said John Mellor , CEO, Domo. “We continue to optimize for long-term, sustainable growth, as we deliver speed-to-value to line-of-business decision makers and support our customers' success.”
Recent Highlights
We believe the following announcements and recognition demonstrate our commitment to product innovation and customer value:
Business Outlook
Based on information available as of August 25, 2022 , Domo is providing the following guidance for its third fiscal quarter and full year fiscal 2023:
Q3 Fiscal 2023
Revenue is expected to be in the range of $76.0 million to $77.0 million
Non-GAAP net loss per share is expected to be between $0.23 and $0.27 based on 34.4 million weighted-average shares outstanding
Full Year Fiscal 2023
Revenue is expected to be in the range of $305.0 million to $310.0 million
Non-GAAP net loss per share is expected to be between $0.88 and $0.96 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 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/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) September 8, 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 third 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 July 31, 2022 expected to be filed with the SEC on or about September 9, 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
Six Months Ended
July 31 ,
July 31 ,
2021
2022
2021
2022
Revenue:
Subscription
$
54,666
$
67,406
$
106,778
$
131,981
Professional services and other
8,159
8,125
16,109
18,014
Total revenue
62,825
75,531
122,887
149,995
Cost of revenue:
Subscription (1)
10,019
10,712
19,076
21,379
Professional services and other (1)
6,299
7,601
12,400
14,595
Total cost of revenue
16,318
18,313
31,476
35,974
Gross profit
46,507
57,218
91,411
114,021
Operating expenses:
Sales and marketing (1)
33,378
44,700
66,832
90,287
Research and development (1)
19,341
25,334
35,527
48,525
General and administrative (1), (2)
12,384
12,825
22,602
29,485
Total operating expenses
65,103
82,859
124,961
168,297
Loss from operations
(18,596
)
(25,641
)
(33,550
)
(54,276
)
Other expense, net (1)
(3,505
)
(3,286
)
(6,767
)
(7,351
)
Loss before income taxes
(22,101
)
(28,927
)
(40,317
)
(61,627
)
Provision for income taxes
139
212
27
400
Net loss
$
(22,240
)
$
(29,139
)
$
(40,344
)
$
(62,027
)
Net loss per share (basic and diluted)
$
(0.70
)
$
(0.86
)
$
(1.28
)
$
(1.84
)
Weighted-average number of shares (basic and diluted)
31,883
33,973
31,451
33,640
(1) Includes stock-based compensation expenses, as follows:
Cost of revenue:
Subscription
$
549
$
778
$
968
$
1,509
Professional services and other
271
563
605
1,031
Sales and marketing
4,747
7,873
8,474
15,948
Research and development
2,751
6,283
5,240
13,287
General and administrative
4,137
4,707
7,053
13,512
Other expense, net
171
189
348
370
Total stock-based compensation expenses
$
12,626
$
20,393
$
22,688
$
45,657
(2) Includes amortization of certain intangible assets, as follows:
General and administrative
$
20
$
20
$
40
$
40
Domo, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
January 31 ,
July 31 ,
2022
2022
Assets
Current assets:
Cash and cash equivalents
$
83,561
$
79,894
Accounts receivable, net
64,149
49,148
Contract acquisition costs
15,417
15,099
Prepaid expenses and other current assets
9,975
9,205
Total current assets
173,102
153,346
Property and equipment, net
17,584
18,884
Right-of-use assets
16,392
16,082
Contract acquisition costs, noncurrent
23,177
21,693
Intangible assets, net
2,875
2,835
Goodwill
9,478
9,478
Other assets
1,981
1,688
Total assets
$
244,589
$
224,006
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable
$
4,770
$
17,556
Accrued expenses and other current liabilities
59,976
43,357
Lease liabilities
3,439
4,225
Current portion of deferred revenue
168,335
163,454
Total current liabilities
236,520
228,592
Lease liabilities, noncurrent
16,757
16,063
Deferred revenue, noncurrent
2,420
2,560
Other liabilities, noncurrent
10,882
11,486
Long-term debt
103,988
106,251
Total liabilities
370,567
364,952
Commitments and contingencies
Stockholders' deficit:
Common stock
33
34
Additional paid-in capital
1,098,084
1,146,231
Accumulated other comprehensive income
388
(701
)
Accumulated deficit
(1,224,483
)
(1,286,510
)
Total stockholders' deficit
(125,978
)
(140,946
)
Total liabilities and stockholders' deficit
$
244,589
$
224,006
Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
Six Months Ended
July 31 ,
July 31 ,
2021
2022
2021
2022
Cash flows from operating activities
Net loss
$
(22,240
)
$
(29,139
)
$
(40,344
)
$
(62,027
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
1,228
1,213
2,256
2,820
Non-cash lease expense
1,373
1,177
2,316
2,375
Amortization of contract acquisition costs
3,932
4,266
7,835
8,578
Stock-based compensation
12,626
20,393
22,688
45,657
Other, net
921
972
1,786
1,892
Changes in operating assets and liabilities:
Accounts receivable, net
1,852
(2,514
)
17,123
15,001
Contract acquisition costs
(3,753
)
(4,079
)
(7,365
)
(7,282
)
Prepaid expenses and other assets
1,774
6,584
4,285
781
Accounts payable
2,930
4,822
6,313
12,907
Operating lease liabilities
(631
)
(1,637
)
(1,711
)
(2,139
)
Accrued and other liabilities
4,976
(1,213
)
(11,103
)
(15,399
)
Deferred revenue
(2,819
)
(3,203
)
(4,638
)
(4,741
)
Net cash provided by (used in) operating activities
2,169
(2,358
)
(559
)
(1,577
)
Cash flows from investing activities
Purchases of property and equipment
(1,640
)
(1,479
)
(3,418
)
(3,416
)
Net cash used in investing activities
(1,640
)
(1,479
)
(3,418
)
(3,416
)
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
(1,334
)
-
(7,578
)
-
Proceeds from exercise of stock options
2,509
81
3,163
805
Net cash provided by (used in) financing activities
1,175
81
(282
)
2,368
Effect of exchange rate changes on cash and cash equivalents
(157
)
(345
)
(162
)
(1,042
)
Net increase (decrease) in cash and cash equivalents
1,547
(4,101
)
(4,421
)
(3,667
)
Cash and cash equivalents at beginning of period
84,826
83,995
90,794
83,561
Cash and cash equivalents at end of period
$
86,373
$
79,894
$
86,373
$
79,894
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 ,
2021
2022
2021
2022
Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:
Revenue:
Subscription
$
54,666
$
67,406
$
106,778
$
131,981
Cost of revenue:
Subscription
10,019
10,712
19,076
21,379
Subscription gross profit on a GAAP basis
44,647
56,694
87,702
110,602
Subscription gross margin on a GAAP basis
82
%
84
%
82
%
84
%
Stock-based compensation
549
778
968
1,509
Subscription gross profit on a non-GAAP basis
$
45,196
$
57,472
$
88,670
$
112,111
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
$
65,103
$
82,859
$
124,961
$
168,297
Stock-based compensation
(11,635
)
(18,863
)
(20,767
)
(42,747
)
Amortization of certain intangible assets
(20
)
(20
)
(40
)
(40
)
Total operating expenses on a non-GAAP basis
$
53,448
$
63,976
$
104,154
$
125,510
Reconciliation of Operating Loss on a GAAP Basis to Operating Loss on a Non-GAAP Basis:
Operating loss on a GAAP basis
$
(18,596
)
$
(25,641
)
$
(33,550
)
$
(54,276
)
Stock-based compensation
12,455
20,204
22,340
45,287
Amortization of certain intangible assets
20
20
40
40
Operating loss on a non-GAAP basis
$
(6,121
)
$
(5,417
)
$
(11,170
)
$
(8,949
)
Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis:
Operating margin on a GAAP basis
(30
)%
(34
)%
(27
)%
(36
)%
Stock-based compensation
20
27
18
30
Operating margin on a non-GAAP basis
(10
)%
(7
)%
(9
)%
(6
)%
Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis:
Net loss on a GAAP basis
$
(22,240
)
$
(29,139
)
$
(40,344
)
$
(62,027
)
Stock-based compensation
12,626
20,393
22,688
45,657
Amortization of certain intangible assets
20
20
40
40
Net loss on a non-GAAP basis
$
(9,594
)
$
(8,726
)
$
(17,616
)
$
(16,330
)
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
$
(0.70
)
$
(0.86
)
$
(1.28
)
$
(1.84
)
Stock-based compensation
0.40
0.60
0.72
1.35
Net loss per share on a non-GAAP basis
$
(0.30
)
$
(0.26
)
$
(0.56
)
$
(0.49
)
Billings:
Total revenue
$
62,825
$
75,531
$
122,887
$
149,995
Add:
Deferred revenue (end of period)
126,381
163,454
126,381
163,454
Deferred revenue, noncurrent (end of period)
1,233
2,560
1,233
2,560
Less:
Deferred revenue (beginning of period)
(128,510
)
(167,091
)
(129,079
)
(168,335
)
Deferred revenue, noncurrent (beginning of period)
(1,923
)
(2,126
)
(3,173
)
(2,420
)
Increase in deferred revenue (current and noncurrent)
(2,819
)
(3,203
)
(4,638
)
(4,741
)
Billings
$
60,006
$
72,328
$
118,249
$
145,254
Reconciliation of Net Cash Provided by (Used in) Operating Activities to Adjusted Free Cash Flow:
Net cash provided by (used in) operating activities
$
2,169
$
(2,358
)
$
(559
)
$
(1,577
)
Proceeds from shares issued in connection with employee stock purchase plan
-
-
4,133
1,563
Purchases of property and equipment
(1,640
)
(1,479
)
(3,418
)
(3,416
)
Adjusted free cash flow
$
529
$
(3,837
)
$
156
$
(3,430
)
View source version on businesswire.com : https://www.businesswire.com/news/home/20220823005761/en/
Media –
Julie Kehoe
PR@domo.com
Investors –
Peter Lowry
IR@domo.com
Source: Domo, Inc.