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Domo Announces Fourth Quarter and Fiscal 2019 Financial Results

31% Year-Over-Year Growth in Total Revenue for the Fourth Quarter and Fiscal 2019

Welcomes Carine Clark, Former Symantec CMO, to its Board of Directors

SILICON SLOPES, Utah, March 13, 2019 (GLOBE NEWSWIRE) -- Domo, Inc. (Nasdaq: DOMO), provider of the leading cloud-based operating system for business, today announced results for the fourth quarter and fiscal year ended January 31, 2019.

Fiscal Fourth Quarter Results

  • Total revenue was $39.4 million, an increase of 31% year over year
  • Subscription revenue represented 81% of total revenue
  • Billings were $57.2 million or 26% year-over-year growth
  • Subscription gross margin was 74%, an improvement of 10 percentage points from Q4 fiscal 2018
  • GAAP operating margin improved by 65 percentage points year over year
  • Non-GAAP operating margin improved by 69 percentage points year over year
  • GAAP operating expenses decreased 7% year over year
  • Non-GAAP operating expenses decreased 11% year over year
  • GAAP net loss was $29.9 million, and GAAP net loss per share was $1.13, based on 26.5 million weighted-average shares outstanding
  • Non-GAAP net loss was $25.0 million, and non-GAAP net loss per share was $0.94, based on 26.5 million weighted-average shares outstanding
  • Cash and cash equivalents were $177.0 million as of January 31, 2019

Full Year Fiscal 2019 Results

  • Total revenue was $142.5 million, an increase of 31% year over year
  • Subscription revenue represented 82% of total revenue
  • Billings were $165.4 million or 28% year-over-year growth
  • Subscription gross margin was 72% compared to 63% in fiscal 2018
  • GAAP operating margin improved by 61 percentage points year over year
  • Non-GAAP operating margin improved by 65 percentage points year over year
  • GAAP operating expenses decreased 1% year over year
  • Non-GAAP operating expenses decreased 5% year over year
  • GAAP net loss was $154.3 million, and GAAP net loss per share was $9.43, based on 16.4 million weighted-average shares outstanding
  • Non-GAAP net loss was $135.9 million, and non-GAAP net loss per share was $8.31, based on 16.4 million weighted-average shares outstanding

Comments

"We executed very well in Q4 as our results show, while also delivering on our commitment to drive efficiencies in our sales and marketing spend, and we expect that strong execution to continue into fiscal 2020," said Josh James, Domo founder and CEO. "We continue to see an enormous market opportunity in front of us as we push further into organizations, while enabling customers to unleash data across the business with the speed, security and scale IT demands. I’m particularly pleased with our people and their performance delivering more than 30% growth in revenue while lowering operating expenses 11%."

"Q4 was another strong quarter for us," said Bruce Felt, CFO. "We continued to improve execution across all functions of the organization. We are pleased with the productivity gains from sales and marketing. We plan to continue to grow the business while improving efficiencies and we continue to be committed to achieving cash flow positive with the cash we have on hand."

Board of Directors Update

Domo also announced Carine Clark, Banyan president and CEO, has joined its board of directors. Carine has also served as the CMO of Symantec and also as the CMO of Altiris, both of which were public companies at the time. Carine will fill the seat of early investor and board member Glenn Solomon from GGV Capital.

Josh James commented, "I’d like to thank Glenn for his contributions as a Domo board member over the years, particularly when it came to understanding how to leverage the nuances of our financial model, recruiting of executive management, financings, and insights into how to more effectively operate the business. I’m thrilled to welcome Carine and am confident that Domo will benefit from her strength in enterprise software marketing, sales and channel. I’m looking forward to working with her and having her as a member of our board."

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:

  • Domo announced a new commissioned Forrester Consulting Total Economic Impact™ (TEI) study which determined that organizations deploying Domo can achieve an overall return on investment (ROI) of 434 percent over three years and recoup their investment in less than one year.
  • Domo was named to two Q1 2019 Constellation ShortLists™, one for Marketing Analytics Solutions and the other for Cloud-based BI and Analytics Solutions.
  • Domo was ranked #1 for Usability and TCO/ROI in Ventana Research's 2019 Mobile Analytics and Business Intelligence Value Index.
  • Domo announced the Domo Integration Cloud, a new Integration Platform as a Service (iPaaS) solution that leverages the power of Domo’s back-end data integration and management features and comprehensively addresses data integration, access and governance.
  • Domo announced its latest industry-focused solution, the Domo Media Suite. The Domo Media Suite includes Apps for media buyers and publishers to consolidate complex systems and data sets, and drive better performance from their media campaigns.

Business Outlook

Based on information available as of March 13, 2019, Domo is providing the following guidance for Q1 and full year fiscal 2020:

Q1 Fiscal 2020

  • Revenue is expected to be in the range of $40.0 million to $41.0 million
  • Non-GAAP net loss per share is expected to be between $1.26 and $1.30 based on 26.9 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 $3.99 and $4.07 based on 27.3 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 2019 fourth quarter and fiscal 2019 full year 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#9892795. A replay will be available via webcast or at (855) 859-2056 or (404) 537-3406 until midnight (ET) March 27, 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 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.

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 and non-GAAP net loss per share. In computing these measures, we exclude the effects of stock-based compensation expense, amortization of certain intangible assets and the reversal of contingent tax-related accruals. 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 Q1 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 Prospectus related to our initial public offering filed with the SEC on June 29, 2018 and the Annual Report on Form 10-K for the fiscal year ended January 31, 2019 expected to be filed with the SEC on or about April 10, 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   Year Ended
  January 31,   January 31,
    2018       2019       2018       2019  
Revenue:                
Subscription   $   24,652     $   31,930     $   87,463     $   117,157  
Professional services and other       5,421         7,478         21,061         25,307  
Total revenue       30,073         39,408         108,524         142,464  
Cost of revenue:  
Subscription (1)       8,819         8,267         32,427         32,781  
Professional services and other (1)       3,315         4,276         12,492         16,773  
Total cost of revenue       12,134         12,543         44,919         49,554  
Gross profit       17,939         26,865         63,605         92,910  
 
Operating expenses:  
Sales and marketing (1)       31,320         29,389         131,802         131,081  
Research and development (1)       19,580         16,954         78,261         75,740  
General and administrative (1), (2), (3)       7,510         8,270         29,323         30,176  
Total operating expenses       58,410         54,613         239,386         236,997  
Loss from operations       (40,471 )       (27,748 )       (175,781 )       (144,087 )
 
Other expense, net (1)       (647 )       (1,786 )       (396 )       (8,974 )
Loss before provision for income taxes       (41,118 )       (29,534 )       (176,177 )       (153,061 )
Provision for income taxes       89         339         385         1,248  
Net loss   $   (41,207 )   $   (29,873 )   $   (176,562 )   $   (154,309 )
               
Net loss per share (basic and diluted)   $   (25.33 )   $   (1.13 )   $   (110.70 )   $   (9.43 )
Weighted-average number of shares (basic and diluted)       1,627         26,461         1,595         16,358  
                                 
   
(1) Includes stock-based compensation expenses, as follows:  
Cost of revenue:  
Subscription   $   12     $   75     $   48     $   219  
Professional services and other       9         42         40         154  
Sales and marketing       340         1,897         1,845         7,387  
Research and development       566         1,413         2,311         6,519  
General and administrative       1,270         1,436         5,090         7,492  
Other income, net       11         25         36         30  
Total stock-based compensation expenses   $   2,208     $   4,888     $   9,370     $   21,801  
               
(2) Includes amortization of certain intangible assets, as follows:  
General and administrative   $   20     $   20     $   80     $   80  
 
(3) Includes reversal of contingent tax-related accrual, as follows:  
General and administrative   $   -      $   -      $   -      $   (3,513 )
 

 

Domo, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
  January 31,   January 31,
   2018     2019 
Assets      
Current assets:  
Cash and cash equivalents $   61,972     $   176,973  
Accounts receivable, net     35,484         48,421  
Contract acquisition costs     9,661         10,425  
Prepaid expenses and other current assets     6,144         10,935  
Total current assets     113,261         246,754  
 
Property and equipment, net     14,952         12,595  
Contract acquisition costs, noncurrent     11,521         18,030  
Intangible assets, net     3,026         4,415  
Goodwill     9,478         9,478  
Other assets     3,117         1,360  
Total assets $   155,355     $   292,632  
       
Liabilities, convertible preferred stock and stockholders' (deficit) equity  
Current liabilities:  
Accounts payable $   12,121     $   2,609  
Accrued expenses and other current liabilities     49,428         48,139  
Current portion of deferred revenue     66,712         88,959  
Total current liabilities     128,261         139,707  
 
Deferred revenue, noncurrent     4,244         4,943  
Other liabilities, noncurrent     5,324         6,210  
Long-term debt     46,332         97,245  
Total liabilities     184,161         248,105  
 
Commitments and contingencies  
 
Convertible preferred stock     693,158         -   
Stockholders' (deficit) equity:  
Common stock     2         26  
Additional paid-in capital     35,301         956,145  
Accumulated other comprehensive income     506         438  
Accumulated deficit     (757,773 )       (912,082 )
Total stockholders' (deficit) equity     (721,964 )       44,527  
Total liabilities and stockholders' (deficit) equity $   155,355     $   292,632  
       

 

Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
  Three Months Ended   Year Ended
  January 31,   January 31,
    2018       2019       2018       2019  
Cash flows from operating activities              
Net loss  $   (41,207 )   $   (29,873 )   $   (176,562 )   $   (154,309 )
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization     2,245         1,881         8,051         8,573  
Amortization of intangible assets     20         154         80         214  
Amortization of contract acquisition costs     2,359         2,418         9,014         8,168  
Stock-based compensation     2,208         4,888         9,370         21,801  
Reversal of contingent tax-related accrual     -          -          -          (3,513 )
Capitalized interest     202         652         202         2,293  
Remeasurement of warrant liability     (28 )       -          (28 )       (56 )
Changes in operating assets and liabilities:  
Accounts receivable, net     (12,616 )       (18,616 )       (13,186 )       (12,937 )
Contract acquisition costs     (6,491 )       (6,434 )       (17,160 )       (15,677 )
Prepaid expenses and other assets     (969 )       (3,077 )       (1,610 )       (4,824 )
Accounts payable     725       (2,175 )       3,250         (8,651 )
Accrued and other liabilities     5,402       4,647         8,902       4,605  
Deferred revenue     15,329         17,833         21,020         22,946  
  Net cash used in operating activities     (32,821 )       (27,702 )       (148,657 )       (131,367 )
 
Cash flows from investing activities  
Purchases of property and equipment     (2,190 )       (1,700 )       (7,281 )       (6,373 )
Purchases of intangible assets     (315 )       (1,603 )       (315 )       (1,603 )
  Net cash used in investing activities     (2,505 )       (3,303 )       (7,596 )       (7,976 )
 
Cash flows from financing activities  
Proceeds from initial public offering, net of underwriting discounts and commissions     -          -          -          206,627  
Payments of costs related to initial public offering     (38 )       10         (38 )       (4,053 )
Proceeds from issuance of convertible preferred stock, net of issuance costs     (13 )       -          99,058         (87 )
Debt proceeds, net of issuance costs     48,950         (9 )       48,900         49,642  
Proceeds from exercise of stock options     429         1,974         1,338         2,250  
Repurchases of common stock     -          -          (121 )       -   
Principal payments on capital lease obligations     (10 )       -          (37 )       (44 )
Net cash provided by financing activities     49,318         1,975         149,100         254,335  
Effect of exchange rate changes on cash and cash equivalents     128         4         141         9  
Net increase (decrease) in cash and cash equivalents     14,120         (29,026 )       (7,012 )       115,001  
Cash and cash equivalents at beginning of period     47,852         205,999         68,984         61,972  
Cash and cash equivalents at end of period $   61,972     $   176,973     $   61,972     $   176,973  
               

 

Domo, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)
 
  Three Months Ended   Year Ended
  January 31,   January 31,
    2018       2019       2018       2019  
Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:                
Revenue:  
Subscription   $   24,652     $   31,930     $   87,463     $   117,157  
Cost of revenue:  
Subscription       8,819         8,267         32,427         32,781  
Subscription gross profit on a GAAP basis       15,833         23,663         55,036         84,376  
Subscription gross margin on a GAAP basis     64 %     74 %     63 %     72 %
 
Stock-based compensation       12         75         48         219  
Subscription gross profit on a non-GAAP basis   $   15,845     $   23,738     $   55,084     $   84,595  
Subscription gross margin on a non-GAAP basis     64 %     74 %     63 %     72 %
 
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   $   58,410     $   54,613     $   239,386     $   236,997  
Stock-based compensation       (2,176 )       (4,746 )       (9,246 )       (21,398 )
Amortization of certain intangible assets       (20 )       (20 )       (80 )       (80 )
Reversal of contingent tax-related accrual       -          -          -          3,513  
Total operating expenses on a non-GAAP basis   $   56,214     $   49,847     $   230,060     $   219,032  
               
Reconciliation of Operating Loss on a GAAP Basis to Operating Loss on a Non-GAAP Basis:  
Operating loss on a GAAP basis   $   (40,471 )   $   (27,748 )   $   (175,781 )   $   (144,087 )
Stock-based compensation       2,197         4,863         9,334         21,771  
Amortization of certain intangible assets       20         20         80         80  
Reversal of contingent tax-related accrual       -          -          -          (3,513 )
Operating loss on a non-GAAP basis   $   (38,254 )   $   (22,865 )   $   (166,367 )   $   (125,749 )
               
Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis:  
Operating margin on a GAAP basis     (135 )%     (70 )%     (162 )%     (101 )%
Stock-based compensation       8         12         9         15  
Amortization of certain intangible assets       -          -          -          -   
Reversal of contingent tax-related accrual       -          -          -          (2 )
Operating margin on a non-GAAP basis     (127 )%     (58 )%     (153 )%     (88 )%
               
Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis:  
Net loss on a GAAP basis   $   (41,207 )   $   (29,873 )   $   (176,562 )   $   (154,309 )
Stock-based compensation       2,208         4,888         9,370         21,801  
Amortization of certain intangible assets       20         20         80         80  
Reversal of contingent tax-related accrual      -         -         -          (3,513 )
Net loss on a non-GAAP basis   $   (38,979 )   $   (24,965 )   $   (167,112 )   $   (135,941 )
               
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   $   (25.33 )   $   (1.13 )   $   (110.70 )   $   (9.43 )
Stock-based compensation       1.36         0.19         5.88         1.33  
Amortization of certain intangible assets       0.01         -         0.05         -  
Reversal of contingent tax-related accrual       -         -         -         (0.21 )
Net loss per share on a non-GAAP basis   $   (23.96 )   $   (0.94 )   $   (104.77 )   $   (8.31 )
               
Billings:  
Total revenue   $   30,073     $   39,408     $   108,524     $   142,464  
Add:  
Deferred revenue (end of period)       66,712         88,959         66,712         88,959  
Deferred revenue, noncurrent (end of period)       4,244         4,943         4,244         4,943  
Less:  
Deferred revenue (beginning of period)       (54,047 )       (72,862 )       (48,719 )       (66,712 )
Deferred revenue, noncurrent (beginning of period)       (1,580 )       (3,207 )       (1,217 )       (4,244 )
Increase in deferred revenue (current and noncurrent)       15,329         17,833         21,020         22,946  
Billings   $   45,402     $   57,241     $   129,544     $   165,410  
               

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

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Domo, Inc.