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Domo Announces Third Quarter Fiscal 2022 Financial Results

Domo, Inc. (Nasdaq: DOMO) today announced results for its fiscal third quarter ended October 31, 2021.

Fiscal Third Quarter Results

  • Total revenue was $65.1 million, an increase of 21% year over year
  • Subscription revenue was $56.6 million, an increase of 21% year over year
  • Subscription revenue represented 87% of total revenue
  • Billings were $70.2 million or 26% year-over-year growth
  • Remaining Performance Obligations (RPO) was $296.9 million as of October 31, 2021, an increase of 19% year over year
  • RPO expected to be recognized as revenue in the next twelve months was $190.6 million as of October 31, 2021, an increase of 24% year over year
  • Net cash provided by operating activities was $0.03 million
  • GAAP subscription gross margin was 81%, an improvement of 1 percentage point from Q3 FY21
  • Non-GAAP subscription gross margin was 83%, an improvement of 2 percentage points from Q3 FY21
  • GAAP operating margin declined by 3 percentage points year over year
  • Non-GAAP operating margin improved by 6 percentage points year over year
  • GAAP net loss was $28.5 million, and GAAP net loss per share was $0.88, based on 32.4 million weighted-average shares outstanding
  • Non-GAAP net loss was $10.3 million, and non-GAAP net loss per share was $0.32, based on 32.4 million weighted-average shares outstanding
  • Cash and cash equivalents were $84.2 million as of October 31, 2021

“We delivered strong results for the quarter, driven by continued market demand for our core modern BI solution and fueled by increasing demand for data-enabled apps to help our customers run their businesses on the Domo platform,” said Josh James, founder and CEO, Domo.

Recent Highlights

We believe the following recognition and research demonstrate our commitment to product innovation, go-to-market initiatives and customer success:

Business Outlook

Based on information available as of December 2, 2021, Domo is providing the following guidance for its fourth fiscal quarter and full year fiscal 2022:

Q4 Fiscal 2022

  • Revenue is expected to be in the range of $66.5 million to $67.5 million
  • Non-GAAP net loss per share is expected to be between $0.37 and $0.41 based on 32.8 million weighted-average shares outstanding

Full Year Fiscal 2022

  • Revenue is expected to be in the range of $254.5 million to $255.5 million
  • Non-GAAP net loss per share is expected to be between $1.26 and $1.30 based on 32.0 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 2022 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 16, 2021.

About Domo

Domo (Nasdaq: DOMO) is the Business Cloud, transforming the way business is managed by delivering Modern BI for All™. With Domo, critical processes that took weeks, months or more can now be done on-the-fly, in minutes or seconds, at unbelievable scale. 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, adjusted net cash used in operating activities, and 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. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

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 2022, 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, 2021 expected to be filed with the SEC on or about December 10, 2021, as well as risks to our business related to the COVID-19 pandemic. 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, Domo Business Cloud and Domo is the Business Cloud are registered trademarks 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,

2020

 

2021

 

2020

 

2021

Revenue:
Subscription

$

46,906

 

$

56,621

 

$

133,689

 

$

163,399

 

Professional services and other

 

6,739

 

 

8,460

 

 

19,648

 

 

24,569

 

Total revenue

 

53,645

 

 

65,081

 

 

153,337

 

 

187,968

 

Cost of revenue:
Subscription (1)

 

9,372

 

 

10,514

 

 

27,288

 

 

29,590

 

Professional services and other (1)

 

5,106

 

 

6,630

 

 

14,948

 

 

19,030

 

Total cost of revenue

 

14,478

 

 

17,144

 

 

42,236

 

 

48,620

 

Gross profit

 

39,167

 

 

47,937

 

 

111,101

 

 

139,348

 

 
Operating expenses:
Sales and marketing (1)

 

29,609

 

 

37,503

 

 

86,089

 

 

104,335

 

Research and development (1)

 

16,504

 

 

21,984

 

 

49,874

 

 

57,511

 

General and administrative (1), (2)

 

11,929

 

 

13,430

 

 

31,355

 

 

36,032

 

Total operating expenses

 

58,042

 

 

72,917

 

 

167,318

 

 

197,878

 

Loss from operations

 

(18,875

)

 

(24,980

)

 

(56,217

)

 

(58,530

)

 
Other expense, net (1)

 

(3,215

)

 

(3,471

)

 

(8,356

)

 

(10,238

)

Loss before income taxes

 

(22,090

)

 

(28,451

)

 

(64,573

)

 

(68,768

)

Provision for income taxes

 

131

 

 

62

 

 

446

 

 

89

 

Net loss

$

(22,221

)

$

(28,513

)

$

(65,019

)

$

(68,857

)

 
Net loss per share (basic and diluted)

$

(0.75

)

$

(0.88

)

$

(2.24

)

$

(2.17

)

Weighted-average number of shares (basic and diluted)

 

29,533

 

 

32,363

 

 

28,998

 

 

31,758

 

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

$

377

 

$

800

 

$

750

 

$

1,768

 

Professional services and other

 

273

 

 

563

 

 

494

 

 

1,168

 

Sales and marketing

 

3,301

 

 

6,718

 

 

7,670

 

 

15,192

 

Research and development

 

2,716

 

 

5,363

 

 

6,595

 

 

10,603

 

General and administrative

 

3,452

 

 

4,543

 

 

8,172

 

 

11,596

 

Other expense, net

 

172

 

 

176

 

 

267

 

 

524

 

Total stock-based compensation expenses

$

10,291

 

$

18,163

 

$

23,948

 

$

40,851

 

 
(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,

2021

2021

Assets
Current assets:
Cash and cash equivalents

$

90,794

 

$

84,245

 

Accounts receivable, net

 

48,272

 

 

38,895

 

Contract acquisition costs

 

13,894

 

 

13,795

 

Prepaid expenses and other current assets

 

12,216

 

 

7,314

 

Total current assets

 

165,176

 

 

144,249

 

 
Property and equipment, net

 

14,745

 

 

16,998

 

Right-of-use assets

 

3,663

 

 

17,738

 

Contract acquisition costs, noncurrent

 

18,605

 

 

18,474

 

Intangible assets, net

 

3,356

 

 

2,895

 

Goodwill

 

9,478

 

 

9,478

 

Other assets

 

1,415

 

 

1,301

 

Total assets

$

216,438

 

$

211,133

 

 
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable

$

1,085

 

$

12,021

 

Accrued expenses and other current liabilities

 

51,950

 

 

44,903

 

Lease liabilities

 

3,808

 

 

3,117

 

Current portion of deferred revenue

 

129,079

 

 

130,385

 

Total current liabilities

 

185,922

 

 

190,426

 

 
Lease liabilities, noncurrent

 

1,556

 

 

17,565

 

Deferred revenue, noncurrent

 

3,173

 

 

2,352

 

Other liabilities, noncurrent

 

9,637

 

 

10,495

 

Long-term debt

 

99,609

 

 

102,852

 

Total liabilities

 

299,897

 

 

323,690

 

 
Commitments and contingencies
 
Stockholders' deficit:
Common stock

 

30

 

 

32

 

Additional paid-in capital

 

1,038,006

 

 

1,077,993

 

Accumulated other comprehensive income

 

877

 

 

647

 

Accumulated deficit

 

(1,122,372

)

 

(1,191,229

)

Total stockholders' deficit

 

(83,459

)

 

(112,557

)

Total liabilities and stockholders' deficit

$

216,438

 

$

211,133

 

Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
Three Months Ended Nine Months Ended
October 31, October 31,

2020

 

2021

 

2020

 

2021

Cash flows from operating activities
Net loss

$

(22,221

)

$

(28,513

)

$

(65,019

)

$

(68,857

)

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

 

1,126

 

 

1,533

 

 

3,490

 

 

3,789

 

Non-cash lease expense

 

1,044

 

 

1,224

 

 

2,997

 

 

3,540

 

Amortization of contract acquisition costs

 

3,657

 

 

3,944

 

 

10,577

 

 

11,779

 

Stock-based compensation

 

10,291

 

 

18,163

 

 

23,948

 

 

40,851

 

Other, net

 

1,634

 

 

877

 

 

3,456

 

 

2,663

 

Changes in operating assets and liabilities:
Accounts receivable, net

 

(2,855

)

 

(7,746

)

 

10,179

 

 

9,377

 

Contract acquisition costs

 

(4,047

)

 

(4,354

)

 

(9,939

)

 

(11,719

)

Prepaid expenses and other assets

 

474

 

 

664

 

 

4,039

 

 

4,949

 

Accounts payable

 

2,991

 

 

4,652

 

 

2,397

 

 

10,965

 

Operating lease liabilities

 

(996

)

 

(669

)

 

(2,564

)

 

(2,380

)

Accrued and other liabilities

 

5,159

 

 

5,131

 

 

506

 

 

(5,972

)

Deferred revenue

 

2,027

 

 

5,123

 

 

(3,487

)

 

485

 

Net cash (used in) provided by operating activities

 

(1,716

)

 

29

 

 

(19,420

)

 

(530

)

 
Cash flows from investing activities
Purchases of property and equipment

 

(1,105

)

 

(1,547

)

 

(4,259

)

 

(4,965

)

Purchases of securities available for sale

 

-

 

 

-

 

 

(11,149

)

 

-

 

Proceeds from maturities of securities available for sale

 

4,900

 

 

-

 

 

29,200

 

 

-

 

Purchases of intangible assets

 

(6

)

 

-

 

 

(111

)

 

-

 

Net cash provided by (used in) investing activities

 

3,789

 

 

(1,547

)

 

13,681

 

 

(4,965

)

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

 

3,099

 

 

-

 

 

6,748

 

 

4,133

 

Shares repurchased for tax withholdings on vesting of restricted stock

 

(194

)

 

(1,280

)

 

(717

)

 

(8,858

)

Proceeds from exercise of stock options

 

446

 

 

745

 

 

2,505

 

 

3,908

 

Net cash provided by (used in) financing activities

 

3,351

 

 

(535

)

 

8,536

 

 

(817

)

Effect of exchange rate changes on cash and cash equivalents

 

(66

)

 

(75

)

 

173

 

 

(237

)

Net increase (decrease) in cash and cash equivalents

 

5,358

 

 

(2,128

)

 

2,970

 

 

(6,549

)

Cash and cash equivalents at beginning of period

 

78,455

 

 

86,373

 

 

80,843

 

 

90,794

 

Cash and cash equivalents at end of period

$

83,813

 

$

84,245

 

$

83,813

 

$

84,245

 

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,

2020

 

2021

 

2020

 

2021

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

$

46,906

 

$

56,621

 

$

133,689

 

$

163,399

 

Cost of revenue:
Subscription

 

9,372

 

 

10,514

 

 

27,288

 

 

29,590

 

Subscription gross profit on a GAAP basis

 

37,534

 

 

46,107

 

 

106,401

 

 

133,809

 

Subscription gross margin on a GAAP basis

 

80

%

 

81

%

 

80

%

 

82

%

 
Stock-based compensation

 

377

 

 

800

 

 

750

 

 

1,768

 

Subscription gross profit on a non-GAAP basis

$

37,911

 

$

46,907

 

$

107,151

 

$

135,577

 

Subscription gross margin on a non-GAAP basis

 

81

%

 

83

%

 

80

%

 

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

$

58,042

 

$

72,917

 

$

167,318

 

$

197,878

 

Stock-based compensation

 

(9,469

)

 

(16,624

)

 

(22,437

)

 

(37,391

)

Amortization of certain intangible assets

 

(20

)

 

(20

)

 

(60

)

 

(60

)

Total operating expenses on a non-GAAP basis

$

48,553

 

$

56,273

 

$

144,821

 

$

160,427

 

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

$

(18,875

)

$

(24,980

)

$

(56,217

)

$

(58,530

)

Stock-based compensation

 

10,119

 

 

17,987

 

 

23,681

 

 

40,327

 

Amortization of certain intangible assets

 

20

 

 

20

 

 

60

 

 

60

 

Operating loss on a non-GAAP basis

$

(8,736

)

$

(6,973

)

$

(32,476

)

$

(18,143

)

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

 

(35

)%

 

(38

)%

 

(37

)%

 

(31

)%

Stock-based compensation

 

19

 

 

27

 

 

16

 

 

21

 

Operating margin on a non-GAAP basis

 

(16

)%

 

(11

)%

 

(21

)%

 

(10

)%

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

$

(22,221

)

$

(28,513

)

$

(65,019

)

$

(68,857

)

Stock-based compensation

 

10,291

 

 

18,163

 

 

23,948

 

 

40,851

 

Amortization of certain intangible assets

 

20

 

 

20

 

 

60

 

 

60

 

Net loss on a non-GAAP basis

$

(11,910

)

$

(10,330

)

$

(41,011

)

$

(27,946

)

 
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

$

(0.75

)

$

(0.88

)

$

(2.24

)

$

(2.17

)

Stock-based compensation

 

0.35

 

 

0.56

 

 

0.83

 

 

1.29

 

Net loss per share on a non-GAAP basis

$

(0.40

)

$

(0.32

)

$

(1.41

)

$

(0.88

)

 
Billings:
Total revenue

$

53,645

 

$

65,081

 

$

153,337

 

$

187,968

 

Add:
Deferred revenue (end of period)

 

103,075

 

 

130,385

 

 

103,075

 

 

130,385

 

Deferred revenue, noncurrent (end of period)

 

3,182

 

 

2,352

 

 

3,182

 

 

2,352

 

Less:
Deferred revenue (beginning of period)

 

(101,982

)

 

(126,381

)

 

(105,290

)

 

(129,079

)

Deferred revenue, noncurrent (beginning of period)

 

(2,248

)

 

(1,233

)

 

(4,454

)

 

(3,173

)

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

 

2,027

 

 

5,123

 

 

(3,487

)

 

485

 

Billings

$

55,672

 

$

70,204

 

$

149,850

 

$

188,453

 

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

$

(1,716

)

$

29

 

$

(19,420

)

$

(530

)

Proceeds from shares issued in connection with employee stock purchase plan

 

3,099

 

 

-

 

 

6,748

 

 

4,133

 

Adjusted net cash provided by (used in) operating activities

$

1,383

 

$

29

 

$

(12,672

)

$

3,603

 

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

$

(1,716

)

$

29

 

$

(19,420

)

$

(530

)

Proceeds from shares issued in connection with employee stock purchase plan

 

3,099

 

 

-

 

 

6,748

 

 

4,133

 

Purchases of property and equipment

 

(1,105

)

 

(1,547

)

 

(4,259

)

 

(4,965

)

Free cash flow

$

278

 

$

(1,518

)

$

(16,931

)

$

(1,362

)

 

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