Domo, Inc. (NASDAQ:DOMO) today announced results for its fiscal third quarter ended October 31, 2022.

Fiscal Third Quarter Results

Total revenue was $79.0 million, an increase of 21% year over year
Subscription revenue was $69.0 million, an increase of 22% year over year
Subscription revenue represented 87% of total revenue
Billings were $74.0 million or 5% year-over-year growth
Remaining Performance Obligations (RPO) was $354.3 million as of October 31, 2022, an increase of 19% year over year
RPO expected to be recognized as revenue in the next twelve months was $230.3 million as of October 31, 2022, an increase of 21% year over year
Net cash used in operating activities was $6.5 million
GAAP subscription gross margin was 84%, an improvement of 2 percentage points from Q3 FY22
Non-GAAP subscription gross margin was 85%, an improvement of 2 percentage points from Q3 FY22
GAAP operating margin increased by 15 percentage points year over year
Non-GAAP operating margin increased by 11 percentage points year over year
GAAP net loss was $23.7 million, and GAAP net loss per share was $0.69, based on 34.4 million weighted-average shares outstanding
Non-GAAP net loss was $4.5 million, and non-GAAP net loss per share was $0.13, based on 34.4 million weighted-average shares outstanding
Cash, cash equivalents, and restricted cash were $71.1 million as of October 31, 2022

"Domo helps companies of all sizes better leverage data so every employee can be a multiplier of business impact," said John Mellor, CEO, Domo. "I'm proud of the team for their continued focus on delivering customer value while operating the business with efficiency. Based on the size and health of the pipeline and the strong demand at the top of the funnel, we remain bullish on our long-term prospects."

Domo also announced today that Bruce Felt is transitioning out as the company's Chief Financial Officer. Felt will remain in his current role until a successor is named. He is also an active member of the search team to find a replacement and is committed to a seamless transition once his successor is identified. Domo has initiated an executive search with the assistance of Heidrick & Struggles, a leading executive search firm.

Mellor remarked, "On behalf of everyone at Domo, I would like to thank Bruce for his many contributions to our company as CFO. He has played an important role in advancing our strategy, elevating our finance function and successfully navigating us through the pandemic. His leadership has put the company in a place where this change can occur without disruption to our customers, internal operations or other finance functions. We wish him all the best in his next chapter and appreciate his continued support during the transition period."

Felt said, "The last eight years have been among the most rewarding for me professionally, and I am grateful to the Domo Board and leadership team for their collaboration and partnership. I'm proud of all that we have accomplished together and have enormous confidence in Domo's continued success."

Recent Highlights

We believe the following announcements and recognition demonstrate our commitment to product innovation and customer value:

Domo was named "Customers' Choice" in Gartner® Peer Insights™ Voice of the Customer Report for Analytics and Business Intelligence Platforms
Domo was named a Leader in Nucleus Research's 2022 Embedded Analytics Technology Value Matrix
Domo was named with customer Walker Edison as a 2022 Nucleus ROI Winner
Domo was ranked as a Technology and a Credibility Leader in Dresner Advisory Services' 2022 Small and Mid-Sized Enterprise Business Intelligence Market Study
Domo was named to the Constellation ShortLists™ for Cloud-Based BI and Analytics Platforms and Marketing Analytics Solutions

Business Outlook

Based on information available as of December 8, 2022, Domo is providing the following guidance for its fourth fiscal quarter and full year fiscal 2023:

Q4 Fiscal 2023

Revenue is expected to be in the range of $77.0 million to $78.0 million
Non-GAAP net loss per share is expected to be between $0.07 and $0.11 based on 34.7 million weighted-average shares outstanding

Full Year Fiscal 2023

Revenue is expected to be in the range of $306.0 million to $307.0 million
Non-GAAP net loss per share is expected to be between $0.68 and $0.72 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 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 22, 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 fourth 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 October 31, 2022 expected to be filed with the SEC on or about December 12, 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						Nine Months Ended
	October 31,						October 31,
	2021			2022			2021			2022
Revenue:
Subscription	$	56,621		$	69,041		$	163,399		$	201,022
Professional services and other		8,460			9,985			24,569			27,999
Total revenue		65,081			79,026			187,968			229,021
Cost of revenue:
Subscription (1)		10,514			11,342			29,590			32,721
Professional services and other (1)		6,630			7,572			19,030			22,167
Total cost of revenue		17,144			18,914			48,620			54,888
Gross profit		47,937			60,112			139,348			174,133

Operating expenses:
Sales and marketing (1)		37,503			41,012			104,335			131,299
Research and development (1)		21,984			24,583			57,511			73,108
General and administrative (1), (2)		13,430			13,029			36,032			42,514
Total operating expenses		72,917			78,624			197,878			246,921
Loss from operations		(24,980	)		(18,512	)		(58,530	)		(72,788	)

Other expense, net (1)		(3,471	)		(5,032	)		(10,238	)		(12,383	)
Loss before income taxes		(28,451	)		(23,544	)		(68,768	)		(85,171	)
Provision for income taxes		62			167			89			567
Net loss	$	(28,513	)	$	(23,711	)	$	(68,857	)	$	(85,738	)

Net loss per share (basic and diluted)	$	(0.88	)	$	(0.69	)	$	(2.17	)	$	(2.53	)
Weighted-average number of shares (basic and diluted)		32,363			34,392			31,758			33,893


(1) Includes stock-based compensation expenses, as follows:
Cost of revenue:
Subscription	$	800		$	667		$	1,768		$	2,176
Professional services and other		563			308			1,168			1,339
Sales and marketing		6,718			7,336			15,192			23,284
Research and development		5,363			5,909			10,603			19,196
General and administrative		4,543			4,807			11,596			18,319
Other expense, net		176			180			524			550
Total stock-based compensation expenses	$	18,163		$	19,207		$	40,851		$	64,864

(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,
	2022			2022
Assets
Current assets:
Cash, cash equivalents, and restricted cash	$	83,561		$	71,082
Accounts receivable, net		64,149			53,314
Contract acquisition costs		15,417			15,146
Prepaid expenses and other current assets		9,975			7,457
Total current assets		173,102			146,999

Property and equipment, net		17,584			19,834
Right-of-use assets		16,392			14,871
Contract acquisition costs, noncurrent		23,177			21,390
Intangible assets, net		2,875			2,814
Goodwill		9,478			9,478
Other assets		1,981			1,945
Total assets	$	244,589		$	217,331

Liabilities and stockholders' deficit
Current liabilities:
Accounts payable	$	4,770		$	17,843
Accrued expenses and other current liabilities		59,976			45,928
Lease liabilities		3,439			4,062
Current portion of deferred revenue		168,335			157,915
Total current liabilities		236,520			225,748

Lease liabilities, noncurrent		16,757			15,239
Deferred revenue, noncurrent		2,420			3,100
Other liabilities, noncurrent		10,882			11,945
Long-term debt		103,988			107,424
Total liabilities		370,567			363,456

Commitments and contingencies

Stockholders' deficit:
Common stock		33			34
Additional paid-in capital		1,098,084			1,165,522
Accumulated other comprehensive income		388			(1,460	)
Accumulated deficit		(1,224,483	)		(1,310,221	)
Total stockholders' deficit		(125,978	)		(146,125	)
Total liabilities and stockholders' deficit	$	244,589		$	217,331

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

	Three Months Ended						Nine Months Ended
	October 31,						October 31,
	2021			2022			2021			2022
Cash flows from operating activities
Net loss	$	(28,513	)	$	(23,711	)	$	(68,857	)	$	(85,738	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		1,533			1,269			3,789			4,089
Non-cash lease expense		1,224			987			3,540			3,362
Amortization of contract acquisition costs		3,944			4,247			11,779			12,825
Stock-based compensation		18,163			19,207			40,851			64,864
Other, net		877			1,135			2,663			3,027
Changes in operating assets and liabilities:
Accounts receivable, net		(7,746	)		(4,166	)		9,377			10,835
Contract acquisition costs		(4,354	)		(4,405	)		(11,719	)		(11,687	)
Prepaid expenses and other assets		664			1,282			4,949			2,063
Accounts payable		4,652			384			10,965			13,291
Operating lease liabilities		(669	)		(1,239	)		(2,380	)		(3,378	)
Accrued and other liabilities		5,131			3,527			(5,972	)		(11,872	)
Deferred revenue		5,123			(4,999	)		485			(9,740	)
Net cash provided by (used in) operating activities		29			(6,482	)		(530	)		(8,059	)

Cash flows from investing activities
Purchases of property and equipment		(1,547	)		(1,657	)		(4,965	)		(5,073	)
Net cash used in investing activities		(1,547	)		(1,657	)		(4,965	)		(5,073	)

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		(1,280	)		-			(8,858	)		-
Proceeds from structured payables		-			6,624			-			6,624
Payments on structured payables		-			(6,624	)		-			(6,624	)
Proceeds from exercise of stock options		745			56			3,908			861
Net cash (used in) provided by financing activities		(535	)		56			(817	)		2,424
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		(75	)		(729	)		(237	)		(1,771	)
Net decrease in cash, cash equivalents, and restricted cash		(2,128	)		(8,812	)		(6,549	)		(12,479	)
Cash, cash equivalents, and restricted cash at beginning of period		86,373			79,894			90,794			83,561
Cash, cash equivalents, and restricted cash at end of period	$	84,245		$	71,082		$	84,245		$	71,082

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,
	2021			2022			2021			2022
Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:
Revenue:
Subscription	$	56,621		$	69,041		$	163,399		$	201,022
Cost of revenue:
Subscription		10,514			11,342			29,590			32,721
Subscription gross profit on a GAAP basis		46,107			57,699			133,809			168,301
Subscription gross margin on a GAAP basis		81	%		84	%		82	%		84	%

Stock-based compensation		800			667			1,768			2,176
Subscription gross profit on a non-GAAP basis	$	46,907		$	58,366		$	135,577		$	170,477
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	$	72,917		$	78,624		$	197,878		$	246,921
Stock-based compensation		(16,624	)		(18,052	)		(37,391	)		(60,799	)
Amortization of certain intangible assets		(20	)		(20	)		(60	)		(60	)
Total operating expenses on a non-GAAP basis	$	56,273		$	60,552		$	160,427		$	186,062

Reconciliation of Operating Loss on a GAAP Basis to Operating (Loss) Income on a Non-GAAP Basis:
Operating loss on a GAAP basis	$	(24,980	)	$	(18,512	)	$	(58,530	)	$	(72,788	)
Stock-based compensation		17,987			19,027			40,327			64,314
Amortization of certain intangible assets		20			20			60			60
Operating (loss) income on a non-GAAP basis	$	(6,973	)	$	535		$	(18,143	)	$	(8,414	)

Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis:
Operating margin on a GAAP basis		(38	)%		(23	)%		(31	)%		(32	)%
Stock-based compensation		27			24			21			28
Operating margin on a non-GAAP basis		(11	)%		1	%		(10	)%		(4	)%

Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis:
Net loss on a GAAP basis	$	(28,513	)	$	(23,711	)	$	(68,857	)	$	(85,738	)
Stock-based compensation		18,163			19,207			40,851			64,864
Amortization of certain intangible assets		20			20			60			60
Net loss on a non-GAAP basis	$	(10,330	)	$	(4,484	)	$	(27,946	)	$	(20,814	)

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	$	(0.88	)	$	(0.69	)	$	(2.17	)	$	(2.53	)
Stock-based compensation		0.56			0.56			1.29			1.92
Net loss per share on a non-GAAP basis	$	(0.32	)	$	(0.13	)	$	(0.88	)	$	(0.61	)

Billings:
Total revenue	$	65,081		$	79,026		$	187,968		$	229,021
Add:
Deferred revenue (end of period)		130,385			157,915			130,385			157,915
Deferred revenue, noncurrent (end of period)		2,352			3,100			2,352			3,100
Less:
Deferred revenue (beginning of period)		(126,381	)		(163,454	)		(129,079	)		(168,335	)
Deferred revenue, noncurrent (beginning of period)		(1,233	)		(2,560	)		(3,173	)		(2,420	)
Increase (decrease) in deferred revenue (current and noncurrent)		5,123			(4,999	)		485			(9,740	)
Billings	$	70,204		$	74,027		$	188,453		$	219,281

Reconciliation of Net Cash Provided by (Used in) Operating Activities to Adjusted Free Cash Flow:
Net cash provided by (used in) operating activities	$	29		$	(6,482	)	$	(530	)	$	(8,059	)
Proceeds from shares issued in connection with employee stock purchase plan		-			-			4,133			1,563
Purchases of property and equipment		(1,547	)		(1,657	)		(4,965	)		(5,073	)
Adjusted free cash flow	$	(1,518	)	$	(8,139	)	$	(1,362	)	$	(11,569	)

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Domo Announces Third Quarter Fiscal 2023 Financial Results