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:

Domo was named in the Leaders category in the 2022 IDC MarketScape for U.S. business intelligence and analytics (BIA) platforms for its speed to deployment, collaboration functionality and self-service analytics capabilities.
Domo was also named a Leader in Nucleus Research's 2022 Analytics Technology Value Matrix for the second consecutive year, recognized for its integration development tools and enhancement of its multi-cloud capabilities.
Domo announced it has been named an Overall Leader in the Business Intelligence (BI) category of the Dresner Advisory Services' 2022 Wisdom of Crowds® Industry Excellence Awards for the sixth consecutive year. In addition, Domo was named an overall leader and received its sixth consecutive perfect recommendation score in the 2022 Dresner Wisdom of Crowds® BI Market Study.
Domo achieved HITRUST Risk-based, 2-year Certification, passing rigorous third-party security review and validating its commitment to managing risk, improving security posture and meeting compliance requirements.
Domo was named to the 2022 Parity.Org Best Companies for Women to Advance^TMList for the third consecutive year.

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	)

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Domo Announces Second Quarter Fiscal 2023 Financial Results