8-K: Domo Achieves First Positive Non-GAAP EPS in Q2 FY26

Domo, Inc. announced its fiscal second quarter 2026 financial results, highlighted by its first-ever positive non-GAAP diluted net income per share and significant improvements in operating margins.

Summary

• Total revenue reached $79.7 million for Q2 FY26, up from $78.4 million in Q2 FY25.
• Subscription revenue was $72.7 million, an increase from $70.9 million in the prior year.
• Billings grew to $70.3 million, compared to $68.6 million in Q2 FY25.
• Subscription Remaining Performance Obligations (RPO) increased 19% year-over-year to $409.8 million as of July 31, 2025.
• Current subscription RPO rose 4% year-over-year to $220.2 million.
• Net cash provided by operating activities was $3.4 million, a 155% increase year-over-year.
• Adjusted free cash flow improved to $1.4 million, up 125% year-over-year.
• GAAP operating margin improved by 9 percentage points year-over-year to negative 9%.
• Non-GAAP operating margin turned positive at 8%, an increase of 5 percentage points year-over-year.
• GAAP net loss was $22.9 million, or $0.56 per share.
• Non-GAAP net income was $0.9 million, resulting in a diluted non-GAAP net income per share of $0.02, marking the first time the company achieved positive non-GAAP EPS.
• Cash and cash equivalents stood at $47.1 million as of July 31, 2025.
• The company reported 108% Net Revenue Retention (NRR) for customers on consumption contracts.

Sentiment

Score: 8

Explanation: The company achieved its first-ever positive non-GAAP EPS and significant improvements in cash flow and operating margins, indicating a positive trajectory despite continued GAAP losses. Strong RPO growth and industry recognition further bolster positive sentiment.

Positives

• Achieved first-ever positive non-GAAP net income ($0.9 million) and diluted non-GAAP net income per share ($0.02).
• Significant improvement in net cash provided by operating activities, increasing 155% year-over-year to $3.4 million.
• Adjusted free cash flow turned positive at $1.4 million, a 125% increase year-over-year.
• GAAP operating margin improved by 9 percentage points year-over-year to negative 9%.
• Non-GAAP operating margin became positive at 8%, up 5 percentage points year-over-year.
• Subscription Remaining Performance Obligations (RPO) grew 19% year-over-year to $409.8 million.
• Reported 108% Net Revenue Retention (NRR) for customers on consumption contracts, indicating strong customer satisfaction and expansion.
• Recognized as a leader in Nucleus Research's 2025 BI and Analytics Technology Value Matrix for the fifth consecutive year.
• Received its ninth consecutive perfect recommendation score in Dresner Advisory Services' 2025 Wisdom of Crowds Business Intelligence (BI) Market Study.
• Recognized for equal advancement opportunity on the 2025 ParityLIST and Women Tech Council's Shatter List for the eighth consecutive year.

Negatives

• GAAP net loss increased to $22.9 million from $19.5 million in the prior year.
• GAAP net loss per share worsened to $0.56 from $0.51 in the prior year.
• Total revenue growth was modest at 1.6% year-over-year.
• Subscription revenue growth was modest at 2.5% year-over-year.
• Current subscription RPO growth was relatively low at 4% year-over-year.

Risks

• Forward-looking statements are subject to risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially.
• Potential risks and uncertainties are included under the caption "Risk Factors" in the Annual Report on Form 10-K filed with the SEC on April 4, 2025, or subsequent SEC filings.

Future Outlook

For Q3 Fiscal 2026, Domo expects revenue to be between $78.5 million and $79.5 million, with a non-GAAP net loss per share between $0.03 and $0.07. For the full fiscal year 2026, revenue is projected to be in the range of $316.0 million to $320.0 million, and non-GAAP net loss per share is expected to be between $0.11 and $0.19.

Management Comments

• "Our accelerating ACV, strong subscription RPO, and expanding partnerships are powering Domos growth engine."
• "This quarter, we achieved record operating margin and delivered our first ever positive non-GAAP EPS."
• "We also reported 108% NRR for customers who started with Domo on a consumption contract—clear proof our model is driving results."
• "With ongoing AI innovation, continued consumption growth, and a stronger partner ecosystem, Domo is well positioned to lead in the evolving data and AI landscape."

Industry Context

Domo's focus on AI innovation, consumption growth, and a stronger partner ecosystem positions it to capitalize on the evolving data and AI landscape. The company's repeated recognition as a leader in Business Intelligence and Analytics by Nucleus Research and Dresner Advisory Services indicates its strong competitive standing and product relevance in a dynamic market driven by increasing demand for data-driven insights and AI capabilities.

Comparison to Industry Standards

• Domo was named a leader in Nucleus Research's 2025 Business Intelligence (BI) and Analytics Technology Value Matrix for the fifth consecutive year, indicating consistent strong performance against competitors in the BI and analytics space.
• The company was recognized as a leader in the 16th edition of Dresner Advisory Services' 2025 Wisdom of Crowds Business Intelligence (BI) Market Study, achieving its ninth consecutive perfect recommendation score, which suggests superior customer satisfaction and vendor credibility compared to industry peers.
• The 108% Net Revenue Retention (NRR) for consumption-based customers is a strong indicator of customer loyalty and expansion, often exceeding the average NRR for SaaS companies, which typically ranges from 100-120%.

Stakeholder Impact

• Shareholders: Positive non-GAAP EPS and improved cash flow could lead to increased investor confidence and potential share price appreciation. Continued GAAP losses and modest revenue growth might temper enthusiasm.
• Employees: Recognition on the ParityLIST and Shatter List suggests a positive and inclusive work environment, potentially boosting morale and retention.
• Customers: Strong Net Revenue Retention (NRR) and consistent recognition as a BI and Analytics leader indicate high customer satisfaction and value from Domo's platform and services.
• Partners: Expanding partnerships are highlighted by management as a growth driver, suggesting increased collaboration and mutual benefits within the ecosystem.

Next Steps

• Host a conference call on August 27, 2025, at 3:00 p.m. MT/ 5:00 p.m. ET to discuss financial results and outlook.
• Continue to monitor and update social media channels (Facebook, LinkedIn, blog, X accounts) for material information dissemination.

Key Dates

Recommendation

While Domo achieved a significant milestone with its first positive non-GAAP EPS and demonstrated strong improvements in cash flow and operating margins, the company still reports GAAP net losses and modest revenue growth. The positive non-GAAP results are encouraging, and the strong RPO growth indicates future potential. However, the overall financial picture still presents a mixed signal, warranting a 'hold' recommendation as investors await sustained profitability and accelerated revenue growth before considering a stronger position. The guidance for Q3 and full year FY26 still projects non-GAAP net losses, suggesting that while progress is being made, consistent profitability is not yet firmly established.

Keywords

Domo, DOMO, Financial Results, Earnings, Q2 2026, Fiscal 2026, Subscription Revenue, Operating Margin, Non-GAAP EPS, Cash Flow, Business Intelligence, AI, Data Platform, Software, Cloud