Domo Announces Second Quarter Fiscal 2022 Financial Results

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

Fiscal Second Quarter Results

  • Total revenue was $62.8 million, an increase of 23% year over year
  • Subscription revenue was $54.7 million, an increase of 23% year over year
  • Subscription revenue represented 87% of total revenue
  • Billings were $60.0 million or 26% year-over-year growth
  • Remaining performance obligations (RPO) was $286.8 million as of July 31, 2021, an increase of 24% year over year
  • RPO expected to be recognized as revenue in the next twelve months was $183.1 million as of July 31, 2021, an increase of 23% year over year
  • Net cash provided by operating activities was $2.2 million
  • GAAP subscription gross margin was 82%, an improvement of 2 percentage points from Q2 FY21
  • Non-GAAP subscription gross margin was 83%, an improvement of 2 percentage points from Q2 FY21
  • GAAP operating margin remained flat year over year
  • Non-GAAP operating margin improved by 6 percentage points year over year
  • GAAP net loss was $22.2 million, and GAAP net loss per share was $0.70, based on 31.9 million weighted-average shares outstanding
  • Non-GAAP net loss was $9.6 million, and non-GAAP net loss per share was $0.30, based on 31.9 million weighted-average shares outstanding
  • Cash and cash equivalents were $86.4 million as of July 31, 2021

"We have seen the demand for modern BI continue as companies look to unlock and democratize data for every person and every action that moves their business forward,” said Josh James, founder and CEO, Domo. "As the first cloud-native, modern BI platform, Domo was built to help companies put data to work in new ways with the speed and scale that most organizations haven’t seen to date. I am confident in Domo's ability to execute on this mission for the remainder of FY22."

Recent Highlights

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

  • Domo was named a Leader in The Forrester WaveTM: Augmented Business Intelligence (BI) Platforms, Q3 2021.
  • Domo was named an Overall Leader in the Dresner Advisory Services 2021 Wisdom of Crowds® BI Market Study, and received for the fifth consecutive year, a perfect recommendation score from customers. Domo was also named an Overall Leader in Dresner Advisory Services’ 2021 Industry Excellence Awards and was recognized as best in class in integration with third-party technologies and in ease of installation.
  • Domo launched our new Domo Everywhere offering that allows organizations to quickly build and deliver powerful differentiated data experiences for their customers and partners via low and no code software capabilities.

Business Outlook

Based on information available as of August 26, 2021, Domo is providing the following guidance for its third fiscal quarter and full year fiscal 2022:

Q3 Fiscal 2022

  • Revenue is expected to be in the range of $63.5 million to $64.5 million
  • Non-GAAP net loss per share is expected to be between $0.33 and $0.37 based on 32.4 million weighted-average shares outstanding

Full Year Fiscal 2022

  • Revenue is expected to be in the range of $252.0 million to $256.0 million
  • Non-GAAP net loss per share is expected to be between $1.31 and $1.39 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 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 http://www.directeventreg.com/registration/event/3315929. Instructions will be shared on how to join the call after registering.

A replay will be available at (800) 585-8367 or (416) 621-4642 with conference ID #3315929 following the completion of the conference call until 11:59 p.m. (ET) September 9, 2021.

About Domo

Domo (Nasdaq: DOMO) is the Business Cloud, transforming the way business is managed by delivering Modern BI for AllTM. 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 third 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 July 31, 2021 expected to be filed with the SEC on or about September 9, 2021, as well as risks to our business related to the COVID-19 outbreak. 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

 

Six Months Ended

July 31,

 

July 31,

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

Revenue:
Subscription

$

44,347

 

$

54,666

 

$

86,783

 

$

106,778

 

Professional services and other

 

6,784

 

 

8,159

 

 

12,909

 

 

16,109

 

Total revenue

 

51,131

 

 

62,825

 

 

99,692

 

 

122,887

 

Cost of revenue:
Subscription (1)

 

8,811

 

 

10,019

 

 

17,916

 

 

19,076

 

Professional services and other (1)

 

4,838

 

 

6,299

 

 

9,842

 

 

12,400

 

Total cost of revenue

 

13,649

 

 

16,318

 

 

27,758

 

 

31,476

 

Gross profit

 

37,482

 

 

46,507

 

 

71,934

 

 

91,411

 

 
Operating expenses:
Sales and marketing (1)

 

27,384

 

 

33,378

 

 

56,480

 

 

66,832

 

Research and development (1)

 

15,917

 

 

19,341

 

 

33,370

 

 

35,527

 

General and administrative (1), (2)

 

9,557

 

 

12,384

 

 

19,426

 

 

22,602

 

Total operating expenses

 

52,858

 

 

65,103

 

 

109,276

 

 

124,961

 

Loss from operations

 

(15,376

)

 

(18,596

)

 

(37,342

)

 

(33,550

)

 
Other expense, net (1)

 

(2,417

)

 

(3,505

)

 

(5,141

)

 

(6,767

)

Loss before provision for income taxes

 

(17,793

)

 

(22,101

)

 

(42,483

)

 

(40,317

)

Provision for income taxes

 

110

 

 

139

 

 

315

 

 

27

 

Net loss

$

(17,903

)

$

(22,240

)

$

(42,798

)

$

(40,344

)

 
Net loss per share (basic and diluted)

$

(0.62

)

$

(0.70

)

$

(1.49

)

$

(1.28

)

Weighted-average number of shares (basic and diluted)

 

29,001

 

 

31,883

 

 

28,728

 

 

31,451

 

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

$

147

 

$

549

 

$

373

 

$

968

 

Professional services and other

 

118

 

 

271

 

 

221

 

 

605

 

Sales and marketing

 

2,543

 

 

4,747

 

 

4,369

 

 

8,474

 

Research and development

 

2,002

 

 

2,751

 

 

3,879

 

 

5,240

 

General and administrative

 

2,323

 

 

4,137

 

 

4,720

 

 

7,053

 

Other expense, net

 

48

 

 

171

 

 

95

 

 

348

 

Total stock-based compensation expenses

$

7,181

 

$

12,626

 

$

13,657

 

$

22,688

 

 
(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,

 

2021

 

 

 

2021

 

Assets
Current assets:
Cash and cash equivalents

$

90,794

 

$

86,373

 

Accounts receivable, net

 

48,272

 

 

31,149

 

Contract acquisition costs

 

13,894

 

 

13,733

 

Prepaid expenses and other current assets

 

12,216

 

 

8,035

 

Total current assets

 

165,176

 

 

139,290

 

 
Property and equipment, net

 

14,745

 

 

16,569

 

Right-of-use assets

 

3,663

 

 

18,935

 

Contract acquisition costs, noncurrent

 

18,605

 

 

18,207

 

Intangible assets, net

 

3,356

 

 

3,049

 

Goodwill

 

9,478

 

 

9,478

 

Other assets

 

1,415

 

 

1,268

 

Total assets

$

216,438

 

$

206,796

 

 
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable

$

1,085

 

$

7,379

 

Accrued expenses and other current liabilities

 

51,950

 

 

40,169

 

Lease liabilities

 

3,808

 

 

3,858

 

Current portion of deferred revenue

 

129,079

 

 

126,381

 

Total current liabilities

 

185,922

 

 

177,787

 

 
Lease liabilities, noncurrent

 

1,556

 

 

17,383

 

Deferred revenue, noncurrent

 

3,173

 

 

1,233

 

Other liabilities, noncurrent

 

9,637

 

 

10,189

 

Long-term debt

 

99,609

 

 

101,742

 

Total liabilities

 

299,897

 

 

308,334

 

 
Commitments and contingencies
 
Stockholders' deficit:
Common stock

 

30

 

 

32

 

Additional paid-in capital

 

1,038,006

 

 

1,060,419

 

Accumulated other comprehensive income

 

877

 

 

727

 

Accumulated deficit

 

(1,122,372

)

 

(1,162,716

)

Total stockholders' deficit

 

(83,459

)

 

(101,538

)

Total liabilities and stockholders' deficit

$

216,438

 

$

206,796

 

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

Three Months Ended

 

Six Months Ended

July 31,

 

July 31,

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

Cash flows from operating activities
Net loss

$

(17,903

)

$

(22,240

)

$

(42,798

)

$

(40,344

)

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

 

1,071

 

 

1,228

 

 

2,364

 

 

2,256

 

Non-cash lease expense

 

1,002

 

 

1,373

 

 

1,953

 

 

2,316

 

Amortization of contract acquisition costs

 

3,512

 

 

3,932

 

 

6,920

 

 

7,835

 

Stock-based compensation

 

7,181

 

 

12,626

 

 

13,657

 

 

22,688

 

Other, net

 

943

 

 

921

 

 

1,822

 

 

1,786

 

Changes in operating assets and liabilities:
Accounts receivable, net

 

(5,289

)

 

1,852

 

 

13,034

 

 

17,123

 

Contract acquisition costs

 

(3,966

)

 

(3,753

)

 

(5,892

)

 

(7,365

)

Prepaid expenses and other assets

 

3,352

 

 

1,774

 

 

3,565

 

 

4,285

 

Accounts payable

 

(639

)

 

2,930

 

 

(594

)

 

6,313

 

Operating lease liabilities

 

(663

)

 

(631

)

 

(1,568

)

 

(1,711

)

Accrued and other liabilities

 

10,098

 

 

4,976

 

 

(4,653

)

 

(11,103

)

Deferred revenue

 

(3,490

)

 

(2,819

)

 

(5,514

)

 

(4,638

)

Net cash (used in) provided by operating activities

 

(4,791

)

 

2,169

 

 

(17,704

)

 

(559

)

 
Cash flows from investing activities
Purchases of property and equipment

 

(1,791

)

 

(1,640

)

 

(3,154

)

 

(3,418

)

Purchases of securities available for sale

 

-

 

 

-

 

 

(11,149

)

 

-

 

Proceeds from maturities of securities available for sale

 

7,700

 

 

-

 

 

24,300

 

 

-

 

Purchases of intangible assets

 

(1

)

 

-

 

 

(105

)

 

-

 

Net cash provided by (used in) investing activities

 

5,908

 

 

(1,640

)

 

9,892

 

 

(3,418

)

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

 

(10

)

 

-

 

 

3,649

 

 

4,133

 

Shares repurchased for tax withholdings on vesting of restricted stock

 

(485

)

 

(1,334

)

 

(523

)

 

(7,578

)

Proceeds from exercise of stock options

 

2,048

 

 

2,509

 

 

2,059

 

 

3,163

 

Net cash provided by (used in) financing activities

 

1,553

 

 

1,175

 

 

5,185

 

 

(282

)

Effect of exchange rate changes on cash and cash equivalents

 

242

 

 

(157

)

 

239

 

 

(162

)

Net increase (decrease) in cash and cash equivalents

 

2,912

 

 

1,547

 

 

(2,388

)

 

(4,421

)

Cash and cash equivalents at beginning of period

 

75,543

 

 

84,826

 

 

80,843

 

 

90,794

 

Cash and cash equivalents at end of period

$

78,455

 

$

86,373

 

$

78,455

 

$

86,373

 

 
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,

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

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

$

44,347

 

$

54,666

 

$

86,783

 

$

106,778

 

Cost of revenue:
Subscription

 

8,811

 

 

10,019

 

 

17,916

 

 

19,076

 

Subscription gross profit on a GAAP basis

 

35,536

 

 

44,647

 

 

68,867

 

 

87,702

 

Subscription gross margin on a GAAP basis

 

80

%

 

82

%

 

79

%

 

82

%

 
Stock-based compensation

 

147

 

 

549

 

 

373

 

 

968

 

Subscription gross profit on a non-GAAP basis

$

35,683

 

$

45,196

 

$

69,240

 

$

88,670

 

Subscription gross margin on a non-GAAP basis

 

80

%

 

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

$

52,858

 

$

65,103

 

$

109,276

 

$

124,961

 

Stock-based compensation

 

(6,868

)

 

(11,635

)

 

(12,968

)

 

(20,767

)

Amortization of certain intangible assets

 

(20

)

 

(20

)

 

(40

)

 

(40

)

Total operating expenses on a non-GAAP basis

$

45,970

 

$

53,448

 

$

96,268

 

$

104,154

 

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

$

(15,376

)

$

(18,596

)

$

(37,342

)

$

(33,550

)

Stock-based compensation

 

7,133

 

 

12,455

 

 

13,562

 

 

22,340

 

Amortization of certain intangible assets

 

20

 

 

20

 

 

40

 

 

40

 

Operating loss on a non-GAAP basis

$

(8,223

)

$

(6,121

)

$

(23,740

)

$

(11,170

)

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

 

(30

)%

 

(30

)%

 

(37

)%

 

(27

)%

Stock-based compensation

 

14

 

 

20

 

 

13

 

 

18

 

Operating margin on a non-GAAP basis

 

(16

)%

 

(10

)%

 

(24

)%

 

(9

)%

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

$

(17,903

)

$

(22,240

)

$

(42,798

)

$

(40,344

)

Stock-based compensation

 

7,181

 

 

12,626

 

 

13,657

 

 

22,688

 

Amortization of certain intangible assets

 

20

 

 

20

 

 

40

 

 

40

 

Net loss on a non-GAAP basis

$

(10,702

)

$

(9,594

)

$

(29,101

)

$

(17,616

)

 
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

$

(0.62

)

$

(0.70

)

$

(1.49

)

$

(1.28

)

Stock-based compensation

 

0.25

 

 

0.40

 

 

0.48

 

 

0.72

 

Net loss per share on a non-GAAP basis

$

(0.37

)

$

(0.30

)

$

(1.01

)

$

(0.56

)

 
Billings:
Total revenue

$

51,131

 

$

62,825

 

$

99,692

 

$

122,887

 

Add:
Deferred revenue (end of period)

 

101,982

 

 

126,381

 

 

101,982

 

 

126,381

 

Deferred revenue, noncurrent (end of period)

 

2,248

 

 

1,233

 

 

2,248

 

 

1,233

 

Less:
Deferred revenue (beginning of period)

 

(104,804

)

 

(128,510

)

 

(105,290

)

 

(129,079

)

Deferred revenue, noncurrent (beginning of period)

 

(2,916

)

 

(1,923

)

 

(4,454

)

 

(3,173

)

Decrease in deferred revenue (current and noncurrent)

 

(3,490

)

 

(2,819

)

 

(5,514

)

 

(4,638

)

Billings

$

47,641

 

$

60,006

 

$

94,178

 

$

118,249

 

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

$

(4,791

)

$

2,169

 

$

(17,704

)

$

(559

)

Proceeds from shares issued in connection with employee stock purchase plan

 

(10

)

 

-

 

 

3,649

 

 

4,133

 

Adjusted net cash (used in) provided by operating activities

$

(4,801

)

$

2,169

 

$

(14,055

)

$

3,574

 

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

$

(4,791

)

$

2,169

 

$

(17,704

)

$

(559

)

Proceeds from shares issued in connection with employee stock purchase plan

 

(10

)

 

-

 

 

3,649

 

 

4,133

 

Purchases of property and equipment

 

(1,791

)

 

(1,640

)

 

(3,154

)

 

(3,418

)

Free cash flow

$

(6,592

)

$

529

 

$

(17,209

)

$

156

 

 

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