On August 29, 2024, Domo Inc (DOMO, Financial) released its 8-K filing for the fiscal second quarter ended July 31, 2024. Domo Inc provides a cloud-based platform that digitally connects all the data, systems, and people in an organization, giving them access to real-time data and insights and allowing them to manage their business from their smartphones. The company offers its platform as a subscription-based service, deriving revenue from subscriptions and professional services.
Performance and Challenges
Domo Inc reported total revenue of $78.4 million for Q2 FY2025, a slight decrease of 2% year over year but surpassing the analyst estimate of $76.60 million. However, the company faced challenges with a GAAP net loss of $19.5 million, translating to a GAAP net loss per share of $0.51, which missed the analyst estimate of -$0.37 per share. The subscription revenue stood at $70.9 million, while billings were $68.6 million, a 3% decrease year over year.
Financial Achievements
Despite the challenges, Domo Inc achieved several milestones. The company reported Remaining Performance Obligations (RPO) of $358.9 million as of July 31, 2024. Additionally, Domo Inc was recognized as a leader in multiple industry reports, including Nucleus Research’s 2024 Business Intelligence and Analytics Technology Value Matrix and Dresner Advisory Services’ 2024 Collective Insights report.
Key Financial Metrics
| Metric | Q2 FY2025 | Q2 FY2024 |
|---|---|---|
| Total Revenue | $78.4 million | $79.7 million |
| Subscription Revenue | $70.9 million | $71.2 million |
| Billings | $68.6 million | $70.6 million |
| GAAP Net Loss | $19.5 million | $16.1 million |
| Non-GAAP Net Loss | $2.7 million | $0.8 million |
| Cash, Cash Equivalents, and Restricted Cash | $55.7 million | $63.9 million |
Income Statement Highlights
Domo Inc's gross profit for Q2 FY2025 was $58.3 million, down from $60.6 million in the same period last year. The company's GAAP operating margin decreased by 5 percentage points year over year, while the non-GAAP operating margin decreased by 3 percentage points. The adjusted free cash flow was negative $5.6 million, indicating a challenging cash flow situation.
Balance Sheet and Cash Flow
As of July 31, 2024, Domo Inc had cash, cash equivalents, and restricted cash totaling $55.7 million, down from $60.9 million at the beginning of the fiscal year. The company's total liabilities stood at $364.1 million, with a stockholders' deficit of $166.4 million.
Commentary and Future Outlook
“We've made great progress with ecosystem partnerships and consumption customers in Q2, and are already seeing these strategic initiatives deliver exciting new opportunities for Domo,” said Josh James, founder and CEO, Domo. “We are now better positioned than ever to compete in today’s data and AI landscape, and I’m incredibly optimistic about our future.”
Analysis
Domo Inc's performance in Q2 FY2025 shows a mixed bag of achievements and challenges. While the company managed to beat revenue estimates, the higher-than-expected net loss per share indicates ongoing financial struggles. The decrease in billings and the negative free cash flow are areas of concern that investors should monitor closely. However, the company's recognition as a leader in various industry reports and its strategic initiatives in ecosystem partnerships provide a positive outlook for future growth.
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Explore the complete 8-K earnings release (here) from Domo Inc for further details.
