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 Advance^TM, 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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