Domo Announces Second Quarter Fiscal 2021 Financial Results

SILICON SLOPES, Utah–(BUSINESS WIRE)–Domo, Inc. (Nasdaq: DOMO) today announced results for the fiscal 2021 second quarter ended July 31, 2020.

Fiscal Second Quarter Results

  • Total revenue was $51.1 million, an increase of 23% year over year
  • Subscription revenue was $44.3 million, an increase of 27% year over year
  • Subscription revenue represented 87% of total revenue
  • Billings were $47.6 million or 23% year-over-year growth
  • Net cash used in operating activities was $4.8 million, an improvement of 74% year over year
  • Subscription gross margin was 80%, an improvement of 5 percentage points from Q2 FY20
  • GAAP operating margin improved by 38 percentage points year over year
  • Non-GAAP operating margin improved by 41 percentage points year over year
  • GAAP net loss was $17.9 million, and GAAP net loss per share was $0.62, based on 29.0 million weighted-average shares outstanding
  • Non-GAAP net loss was $10.7 million, and non-GAAP net loss per share was $0.37, based on 29.0 million weighted-average shares outstanding
  • Cash, cash equivalents and short-term investments were $83.4 million as of July 31, 2020

Domo was built for this new world of work where business agility is imperative to surviving and thriving,” said Josh James, founder and CEO, Domo. “Since our IPO, we have been relentlessly focused on growing our business, while at the same time making our growth more efficient and driving to cash flow positive with the cash on our balance sheet. In Q2, we once again made great progress on this front as we help CIOs, CDOs and IT leaders solve some of their most complex and strategic data challenges at a speed and scale our customers have told us they’ve never seen.”

Recent Highlights

We believe the following points and accolades from the last quarter are additional indicators of what’s to come in our business through our commitment to product innovation, go-to-market initiatives and customer success:

  • Domo announced it is a founding member of Parity.org’s ParityPledge in support of people of color, and it has extended its commitment to the ParityPledge by applying the pledge’s recruiting principles throughout the organization.

Business Outlook

Based on information available as of September 3, 2020, Domo is providing the following guidance for Q3 and full year fiscal 2021:

Q3 Fiscal 2021

  • Revenue is expected to be in the range of $51.2 million to $52.2 million
  • Non-GAAP net loss per share is expected to be between $0.42 and $0.46 based on 29.6 million weighted-average shares outstanding

Full Year Fiscal 2021

  • Revenue is expected to be in the range of $202.5 million to $206.5 million
  • Non-GAAP net loss per share is expected to be between $1.83 and $1.91 based on 29.3 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 2021 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. A live dial-in is available domestically at (877) 491-5762 and internationally at (763) 416-6939, with conference ID#2499486. A replay will be available via webcast or at (855) 859-2056 or (404) 537-3406 until midnight (ET) September 17, 2020.

About Domo

Domo is the Business Cloud, empowering organizations of all sizes with BI leverage at cloud scale in record time. With Domo, BI-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 about how Domo (Nasdaq: DOMO) helps its customers go fast, go big and go bold, 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 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 Q3 fiscal quarter and full fiscal year 2021, 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 10, 2020 and the Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2020 expected to be filed with the SEC on or about September 9, 2020, 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,

 

2019

 

 

2020

 

 

2019

 

 

2020

 

Revenue:
Subscription

$

34,873

 

$

44,347

 

$

69,264

 

$

86,783

 

Professional services and other

 

6,787

 

 

6,784

 

 

13,194

 

 

12,909

 

Total revenue

 

41,660

 

 

51,131

 

 

82,458

 

 

99,692

 

Cost of revenue:
Subscription (1)

 

8,816

 

 

8,811

 

 

16,851

 

 

17,916

 

Professional services and other (1)

 

5,395

 

 

4,838

 

 

10,164

 

 

9,842

 

Total cost of revenue

 

14,211

 

 

13,649

 

 

27,015

 

 

27,758

 

Gross profit

 

27,449

 

 

37,482

 

 

55,443

 

 

71,934

 

 
Operating expenses:
Sales and marketing (1)

 

29,501

 

 

27,384

 

 

65,450

 

 

56,480

 

Research and development (1)

 

17,046

 

 

15,917

 

 

34,145

 

 

33,370

 

General and administrative (1), (2), (3)

 

9,275

 

 

9,557

 

 

17,292

 

 

19,426

 

Total operating expenses

 

55,822

 

 

52,858

 

 

116,887

 

 

109,276

 

Loss from operations

 

(28,373

)

 

(15,376

)

 

(61,444

)

 

(37,342

)

 
Other expense, net (1)

 

(2,482

)

 

(2,417

)

 

(4,807

)

 

(5,141

)

Loss before provision for income taxes

 

(30,855

)

 

(17,793

)

 

(66,251

)

 

(42,483

)

Provision for income taxes

 

305

 

 

110

 

 

445

 

 

315

 

Net loss

$

(31,160

)

$

(17,903

)

$

(66,696

)

$

(42,798

)

 
Net loss per share (basic and diluted)

$

(1.14

)

$

(0.62

)

$

(2.45

)

$

(1.49

)

Weighted-average number of shares (basic and diluted)

 

27,418

 

 

29,001

 

 

27,196

 

 

28,728

 

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

$

67

 

$

147

 

$

190

 

$

373

 

Professional services and other

 

60

 

 

118

 

 

153

 

 

221

 

Sales and marketing

 

2,041

 

 

2,543

 

 

6,049

 

 

4,369

 

Research and development

 

1,294

 

 

2,002

 

 

3,359

 

 

3,879

 

General and administrative

 

1,182

 

 

2,323

 

 

2,420

 

 

4,720

 

Other expense, net

 

47

 

 

48

 

 

95

 

 

95

 

Total stock-based compensation expenses

$

4,691

 

$

7,181

 

$

12,266

 

$

13,657

 

 
(2) Includes amortization of certain intangible assets, as follows:
General and administrative

$

20

 

$

20

 

$

40

 

$

40

 

 
(3) Includes reversal of contingent tax-related accrual, as follows:
General and administrative

$

 

$

 

$

(1,293

)

$

 

Domo, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
January 31, July 31,

 

2020

 

2020

Assets
Current assets:
Cash and cash equivalents

$

80,843

$

78,455

Short-term investments

 

17,967

 

4,899

Accounts receivable, net

 

47,967

 

34,933

Contract acquisition costs

 

12,676

 

12,872

Prepaid expenses and other current assets

 

12,809

 

9,756

Total current assets

 

172,262

 

140,915

 
Property and equipment, net

 

12,816

 

14,051

Right-of-use assets

 

 

10,214

Contract acquisition costs, noncurrent

 

17,083

 

16,008

Intangible assets, net

 

3,865

 

3,663

Goodwill

 

9,478

 

9,478

Other assets

 

1,234

 

806

Total assets

$

216,738

$

195,135

 
Liabilities and stockholders’ deficit
Current liabilities:
Accounts payable

$

2,298

$

1,774

Accrued expenses and other current liabilities

 

46,473

 

41,105

Lease liabilities

 

 

4,076

Current portion of deferred revenue

 

105,290

 

101,982

Total current liabilities

 

154,061

 

148,937

 
Lease liabilities, noncurrent

 

 

7,159

Deferred revenue, noncurrent

 

4,454

 

2,248

Other liabilities, noncurrent

 

6,329

 

6,584

Long-term debt

 

101,074

 

103,075

Total liabilities

 

265,918

 

268,003

 
Commitments and contingencies
 
Stockholders’ deficit:
Common stock

 

28

 

29

Additional paid-in capital

 

988,141

 

1,007,022

Accumulated other comprehensive income

 

389

 

617

Accumulated deficit

 

(1,037,738)

 

(1,080,536)

Total stockholders’ deficit

 

(49,180)

 

(72,868)

Total liabilities and stockholders’ deficit

$

216,738

$

195,135

 
Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
Three Months Ended Six Months Ended
July 31, July 31,

 

2019

 

 

 

2020

 

 

 

2019

 

 

 

2020

 

Cash flows from operating activities
Net loss

$

(31,160

)

$

(17,903

)

$

(66,696

)

$

(42,798

)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization

 

1,852

 

 

1,071

 

 

3,616

 

 

2,364

 

Non-cash lease expense

 

 

 

1,002

 

 

 

 

1,953

 

Amortization of contract acquisition costs

 

2,817

 

 

3,512

 

 

5,495

 

 

6,920

 

Stock-based compensation

 

4,691

 

 

7,181

 

 

12,266

 

 

13,657

 

Other, net

 

656

 

 

943

 

 

(3

)

 

1,822

 

Changes in operating assets and liabilities:
Accounts receivable, net

 

5,071

 

 

(5,289

)

 

17,285

 

 

13,034

 

Contract acquisition costs

 

(2,924

)

 

(3,966

)

 

(4,986

)

 

(5,892

)

Prepaid expenses and other assets

 

1,105

 

 

3,352

 

 

(3,388

)

 

3,565

 

Accounts payable

 

(1,109

)

 

(639

)

 

(558

)

 

(594

)

Operating lease liabilities

 

 

 

(663

)

 

 

 

(1,568

)

Accrued and other liabilities

 

3,123

 

 

10,098

 

 

(5,854

)

 

(4,653

)

Deferred revenue

 

(2,866

)

 

(3,490

)

 

(2,599

)

 

(5,514

)

Net cash used in operating activities

 

(18,744

)

 

(4,791

)

 

(45,422

)

 

(17,704

)

 
Cash flows from investing activities
Purchases of property and equipment

 

(1,703

)

 

(1,791

)

 

(3,177

)

 

(3,154

)

Purchases of securities available for sale

 

(15,936

)

 

 

 

(78,944

)

 

(11,149

)

Proceeds from maturities of securities available for sale

 

43,500

 

 

7,700

 

 

43,500

 

 

24,300

 

Purchases of intangible assets

 

 

 

(1

)

 

 

 

(105

)

Net cash provided by (used in) investing activities

 

25,861

 

 

5,908

 

 

(38,621

)

 

9,892

 

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

 

 

 

(10

)

 

4,518

 

 

3,649

 

Shares repurchased for tax withholdings on vesting of restricted stock

 

(112

)

 

(485

)

 

(1,012

)

 

(523

)

Proceeds from exercise of stock options

 

93

 

 

2,048

 

 

1,431

 

 

2,059

 

Net cash (used in) provided by financing activities

 

(19

)

 

1,553

 

 

4,937

 

 

5,185

 

Effect of exchange rate changes on cash and cash equivalents

 

78

 

 

242

 

 

72

 

 

239

 

Net increase (decrease) in cash and cash equivalents

 

7,176

 

 

2,912

 

 

(79,034

)

 

(2,388

)

Cash and cash equivalents at beginning of period

 

90,763

 

 

75,543

 

 

176,973

 

 

80,843

 

Cash and cash equivalents at end of period

$

97,939

 

$

78,455

 

$

97,939

 

$

78,455

 

 
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,

 

2019

 

 

2020

 

 

2019

 

 

2020

 

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

$

34,873

 

$

44,347

 

$

69,264

 

$

86,783

 

Cost of revenue:
Subscription

 

8,816

 

 

8,811

 

 

16,851

 

 

17,916

 

Subscription gross profit on a GAAP basis

 

26,057

 

 

35,536

 

 

52,413

 

 

68,867

 

Subscription gross margin on a GAAP basis

 

75

%

 

80

%

 

76

%

 

79

%

 
Stock-based compensation

 

67

 

 

147

 

 

190

 

 

373

 

Subscription gross profit on a non-GAAP basis

$

26,124

 

$

35,683

 

$

52,603

 

$

69,240

 

Subscription gross margin on a non-GAAP basis

 

75

%

 

80

%

 

76

%

 

80

%

 
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

$

55,822

 

$

52,858

 

$

116,887

 

$

109,276

 

Stock-based compensation

 

(4,517

)

 

(6,868

)

 

(11,828

)

 

(12,968

)

Amortization of certain intangible assets

 

(20

)

 

(20

)

 

(40

)

 

(40

)

Reversal of contingent tax-related accrual

 

 

 

 

 

1,293

 

 

 

Total operating expenses on a non-GAAP basis

$

51,285

 

$

45,970

 

$

106,312

 

$

96,268

 

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

$

(28,373

)

$

(15,376

)

$

(61,444

)

$

(37,342

)

Stock-based compensation

 

4,644

 

 

7,133

 

 

12,171

 

 

13,562

 

Amortization of certain intangible assets

 

20

 

 

20

 

 

40

 

 

40

 

Reversal of contingent tax-related accrual

 

 

 

 

 

(1,293

)

 

 

Operating loss on a non-GAAP basis

$

(23,709

)

$

(8,223

)

$

(50,526

)

$

(23,740

)

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

 

(68

)%

 

(30

)%

 

(75

)%

 

(37

)%

Stock-based compensation

 

11

 

 

14

 

 

16

 

 

13

 

Amortization of certain intangible assets

 

 

 

 

 

 

 

 

Reversal of contingent tax-related accrual

 

 

 

 

 

(2

)

 

 

Operating margin on a non-GAAP basis

 

(57

)%

 

(16

)%

 

(61

)%

 

(24

)%

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

$

(31,160

)

$

(17,903

)

$

(66,696

)

$

(42,798

)

Stock-based compensation

 

4,691

 

 

7,181

 

 

12,266

 

 

13,657

 

Amortization of certain intangible assets

 

20

 

 

20

 

 

40

 

 

40

 

Reversal of contingent tax-related accrual

 

 

 

 

 

(1,293

)

 

 

Net loss on a non-GAAP basis

$

(26,449

)

$

(10,702

)

$

(55,683

)

$

(29,101

)

 
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

$

(1.14

)

$

(0.62

)

$

(2.45

)

$

(1.49

)

Stock-based compensation

 

0.18

 

 

0.25

 

 

0.45

 

 

0.48

 

Amortization of certain intangible assets

 

 

 

 

 

 

 

 

Reversal of contingent tax-related accrual

 

 

 

 

 

(0.05

)

 

 

Net loss per share on a non-GAAP basis

$

(0.96

)

$

(0.37

)

$

(2.05

)

$

(1.01

)

 
Billings:
Total revenue

$

41,660

 

$

51,131

 

$

82,458

 

$

99,692

 

Add:
Deferred revenue (end of period)

 

87,616

 

 

101,982

 

 

87,616

 

 

101,982

 

Deferred revenue, noncurrent (end of period)

 

3,687

 

 

2,248

 

 

3,687

 

 

2,248

 

Less:
Deferred revenue (beginning of period)

 

(89,219

)

 

(104,804

)

 

(88,959

)

 

(105,290

)

Deferred revenue, noncurrent (beginning of period)

 

(4,950

)

 

(2,916

)

 

(4,943

)

 

(4,454

)

Decrease in deferred revenue (current and noncurrent)

 

(2,866

)

 

(3,490

)

 

(2,599

)

 

(5,514

)

Billings

$

38,794

 

$

47,641

 

$

79,859

 

$

94,178

 

 
Reconciliation of Net Cash Used in Operating Activities to Adjusted Net Cash Used in Operating Activities:
Net cash used in operating activities

$

(18,744

)

$

(4,791

)

$

(45,422

)

$

(17,704

)

Proceeds from shares issued in connection with employee stock purchase plan

 

 

 

(10

)

 

4,518

 

 

3,649

 

Adjusted net cash used in operating activities

$

(18,744

)

$

(4,801

)

$

(40,904

)

$

(14,055

)

 

 

Contacts

Media –
Julie Kehoe
PR@domo.com

Investors –
Peter Lowry
IR@domo.com

Laurel McBride real estate agent with Century 21 N and N Realtors with homes for sale in Logan Utah