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Domo Announces Fiscal 2020 First Quarter Financial Results

28% Year-Over-Year Growth in Revenue

77% Subscription Gross Margin

SILICON SLOPES, Utah, June 06, 2019 (GLOBE NEWSWIRE) -- Domo, Inc. (Nasdaq: DOMO), provider of the leading cloud-based operating system for business, today announced results for the fiscal 2020 first quarter ended April 30, 2019.

Fiscal First Quarter Results

  • Total revenue was $40.8 million, an increase of 28% year over year
  • Subscription revenue was $34.4 million, an increase of 29% year over year
  • Subscription revenue represented 84% of total revenue
  • Billings were $41.1 million or 22% year-over-year growth
  • Net cash used in operating activities was $26.7 million, an improvement of 28% year over year
  • Adjusted net cash used in operating activities was $22.2 million, an improvement of 40% year over year
  • Subscription gross margin was 77%, an improvement of more than 7 percentage points from Q1 FY19
  • GAAP operating margin improved by 54 percentage points year over year
  • Non-GAAP operating margin improved by 73 percentage points year over year
  • GAAP operating expenses decreased 4% year over year
  • Non-GAAP operating expenses decreased 15% year over year
  • GAAP net loss was $35.5 million, and GAAP net loss per share was $1.32, based on 27.0 million weighted-average shares outstanding
  • Non-GAAP net loss was $29.2 million, and non-GAAP net loss per share was $1.08, based on 27.0 million weighted-average shares outstanding
  • Cash, cash equivalents and short-term investments were $154.0 million as of April 30, 2019

Comments

"As the results show, our strong business execution in Q1 has helped us sustain growth and achieve operating leverage," said Josh James, Domo founder and CEO. "I’m particularly pleased with our people and their performance delivering 29% growth in subscription revenue, while lowering operating expenses 15%. Today we've seen how challenging and expensive it is for even the largest technology vendors to deliver only a few pieces of what we've built in our platform. I'm continually impressed how our customers, some of which are the world's biggest corporations, are transforming their businesses by using our platform with our rapidly expanding portfolio of enterprise applications and advanced data offerings."

"Q1 was another solid quarter for us," said Bruce Felt, CFO. "We are executing well against our plan as we balance improvements in our expense profile and investments to capture the incredible growth opportunity in front of us, while we march toward cash flow positive with our fully funded business."

Recent Highlights

We believe the following points and accolades are leading indicators of what’s to come in our business through our commitment to product innovation and customer success:

Business Outlook

Based on information available as of June 6, 2019, Domo is providing the following guidance for Q2 and full year fiscal 2020:

Q2 Fiscal 2020

  • Revenue is expected to be in the range of $41.0 million to $42.0 million
  • Non-GAAP net loss per share is expected to be between $0.98 and $1.02 based on 27.5 million weighted-average shares outstanding

Full Year Fiscal 2020

  • Revenue is expected to be in the range of $173.0 million to $174.0 million
  • Non-GAAP net loss per share is expected to be between $3.79 and $3.87 based on 27.6 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 2020 first 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. A live dial-in is available domestically at (877) 491-5762 and internationally at (763) 416-6939, with conference ID#9192995. A replay will be available via webcast or at (855) 859-2056 or (404) 537-3406 until midnight (ET) June 20, 2019.

About Domo

Domo’s mission is to be the operating system for business, digitally connecting all your people, your data and your systems, empowering them to collaborate better, make better decisions and be more efficient, right from their phones. Domo works with many of the world’s leading and most progressive brands across multiple industries including retail, media and entertainment, manufacturing, finance and more. For more information about Domo (Nasdaq: DOMO), visit www.domo.com. You can also follow Domo on TwitterFacebook 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.

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 net cash used in operating activities. 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 Q2 fiscal quarter and full fiscal year 2020, 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 15, 2019 and the Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2019 expected to be filed with the SEC on or about June 12, 2019. 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
  April 30,
  2018   2019
Revenue:      
Subscription $ 26,663     $ 34,391  
Professional services and other   5,282       6,407  
Total revenue   31,945       40,798  
Cost of revenue:              
Subscription (1)   8,056       8,035  
Professional services and other (1)   3,510       4,769  
Total cost of revenue   11,566       12,804  
Gross profit   20,379       27,994  
               
Operating expenses:              
Sales and marketing (1)   39,656       35,949  
Research and development (1)   19,064       17,099  
General and administrative (1), (2), (3)   4,644       8,017  
Total operating expenses   63,364       61,065  
Loss from operations   (42,985 )     (33,071 )
               
Other expense, net (1)   (1,919 )     (2,325 )
Loss before provision for income taxes   (44,904 )     (35,396 )
Provision for income taxes   603       140  
Net loss $ (45,507 )   $ (35,536 )
       
Net loss per share (basic and diluted) $ (27.63 )   $ (1.32 )
Weighted-average number of shares (basic and diluted)   1,647       26,966  
               
               
(1) Includes stock-based compensation expenses, as follows:              
Cost of revenue:              
Subscription $ 15     $ 123  
Professional services and other   8       93  
Sales and marketing   305       4,008  
Research and development   483       2,065  
General and administrative   1,265       1,238  
Other income, net   17       48  
Total stock-based compensation expenses $ 2,093     $ 7,575  
               
(2) Includes amortization of certain intangible assets, as follows:              
General and administrative $ 20     $ 20  
               
(3) Includes reversal of contingent tax-related accrual, as follows:              
General and administrative $ (3,513 )   $ (1,293 )
               

 

 
Domo, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
  January 31,   April 30,
  2019   2019
Assets              
Current assets:              
Cash and cash equivalents $ 176,973     $ 90,763  
Short-term investments   -       63,238  
Accounts receivable, net   48,421       36,207  
Contract acquisition costs   10,425       10,829  
Prepaid expenses and other current assets   10,935       15,545  
Total current assets   246,754       216,582  
               
Property and equipment, net   12,595       12,581  
Contract acquisition costs, noncurrent   18,030       16,889  
Intangible assets, net   4,415       4,261  
Goodwill   9,478       9,478  
Other assets   1,360       1,187  
Total assets $ 292,632     $ 260,978  
               
Liabilities, convertible preferred stock and stockholders' equity              
Current liabilities:              
Accounts payable $ 2,609     $ 3,142  
Accrued expenses and other current liabilities   48,139       37,936  
Current portion of deferred revenue   88,959       89,219  
Total current liabilities   139,707       130,297  
               
Deferred revenue, noncurrent   4,943       4,950  
Other liabilities, noncurrent   6,210       6,030  
Long-term debt   97,245       98,156  
Total liabilities   248,105       239,433  
               
Commitments and contingencies              
               
Convertible preferred stock   -       -  
Stockholders' equity:              
Common stock   26       27  
Additional paid-in capital   956,145       968,754  
Accumulated other comprehensive income   438       382  
Accumulated deficit   (912,082 )     (947,618 )
Total stockholders' equity   44,527       21,545  
Total liabilities and stockholders' equity $ 292,632     $ 260,978  
               

 

 
Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
  Three Months Ended
  April 30,
  2018   2019
Cash flows from operating activities              
Net loss $ (45,507 )   $ (35,536 )
Adjustments to reconcile net loss to net cash used in operating activities:              
Depreciation and amortization   2,285       1,764  
Amortization of contract acquisition costs   1,727       2,678  
Stock-based compensation   2,093       7,575  
Other, net   (3,180 )     (659 )
Changes in operating assets and liabilities:              
Accounts receivable, net   7,066       12,214  
Contract acquisition costs   (1,923 )     (2,062 )
Prepaid expenses and other assets   602       (4,493 )
Accounts payable   4,428       551  
Accrued and other liabilities   (6,247 )     (8,977 )
Deferred revenue   1,769       267  
Net cash used in operating activities   (36,887 )     (26,678 )
               
Cash flows from investing activities              
Purchases of property and equipment   (1,617 )     (1,474 )
Purchases of securities available for sale   -       (63,008 )
Net cash used in investing activities   (1,617 )     (64,482 )
               
Cash flows from financing activities              
Payments of costs related to initial public offering   (1,311 )     -  
Proceeds from issuance of convertible preferred stock, net of issuance costs   (87 )     -  
Proceeds from shares issued in connection with employee stock purchase plan   -       4,518  
Shares repurchased for tax withholdings on vesting of restricted stock   -       (900 )
Debt proceeds, net of issuance costs   49,674       -  
Proceeds from exercise of stock options   212       1,338  
Principal payments on capital lease obligations   (44 )     -  
Net cash provided by financing activities   48,444       4,956  
Effect of exchange rate changes on cash and cash equivalents   24       (6 )
Net increase (decrease) in cash and cash equivalents   9,964       (86,210 )
Cash and cash equivalents at beginning of period   61,972       176,973  
Cash and cash equivalents at end of period $ 71,936     $ 90,763  
               

 

Domo, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)
 
  Three Months Ended
  April 30,
  2018   2019
Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:      
Revenue:  
Subscription $ 26,663     $ 34,391  
Cost of revenue:  
Subscription   8,056       8,035  
Subscription gross profit on a GAAP basis   18,607       26,356  
Subscription gross margin on a GAAP basis   70 %     77 %
 
Stock-based compensation   15       123  
Subscription gross profit on a non-GAAP basis $ 18,622     $ 26,479  
Subscription gross margin on a non-GAAP basis   70 %     77 %
 
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 $ 63,364     $ 61,065  
Stock-based compensation   (2,053 )     (7,311 )
Amortization of certain intangible assets   (20 )     (20 )
Reversal of contingent tax-related accrual   3,513       1,293  
Total operating expenses on a non-GAAP basis $ 64,804     $ 55,027  
       
Reconciliation of Operating Loss on a GAAP Basis to Operating Loss on a Non-GAAP Basis:  
Operating loss on a GAAP basis $ (42,985 )   $ (33,071 )
Stock-based compensation   2,076       7,527  
Amortization of certain intangible assets   20       20  
Reversal of contingent tax-related accrual   (3,513 )     (1,293 )
Operating loss on a non-GAAP basis $ (44,402 )   $ (26,817 )
       
Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis:      
Operating margin on a GAAP basis   (135 )%     (81 )%
Stock-based compensation   7       18  
Amortization of certain intangible assets   -       -  
Reversal of contingent tax-related accrual   (11 )     (3 )
Operating margin on a non-GAAP basis   (139 )%     (66 )%
       
Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis:      
Net loss on a GAAP basis $ (45,507 )   $ (35,536 )
Stock-based compensation   2,093       7,575  
Amortization of certain intangible assets   20       20  
Reversal of contingent tax-related accrual   (3,513 )     (1,293 )
Net loss on a non-GAAP basis $ (46,907 )   $ (29,234 )
       
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 $ (27.63 )   $ (1.32 )
Stock-based compensation   1.27       0.29  
Amortization of certain intangible assets   0.01       -  
Reversal of contingent tax-related accrual   (2.13 )     (0.05 )
Net loss per share on a non-GAAP basis $ (28.48 )   $ (1.08 )
       
Billings:      
Total revenue $ 31,945     $ 40,798  
Add:  
Deferred revenue (end of period)   68,718       89,219  
Deferred revenue, noncurrent (end of period)   4,007       4,950  
Less:  
Deferred revenue (beginning of period)   (66,712 )     (88,959 )
Deferred revenue, noncurrent (beginning of period)   (4,244 )     (4,943 )
Increase in deferred revenue (current and noncurrent)   1,769       267  
Billings $ 33,714     $ 41,065  
       
Reconciliation of Net Cash Used in Operating Activities to Adjusted Net Cash Used in Operating Activities:  
Net cash used in operating activities $ (36,887 )   $ (26,678 )
Proceeds from shares issued in connection with employee stock purchase plan   -       4,518  
Adjusted net cash used in operating activities $ (36,887 )   $ (22,160 )

Contacts:
Domo, Inc.
Media: PR@domo.com
Investors: IR@domo.com

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Source: Domo, Inc.