8-K: Domo Announces Fiscal Q3 2025 Results, Revenue at $79.8 Million

Domo reported its fiscal third quarter 2025 financial results, with total revenue reaching $79.8 million and subscription revenue at $71.1 million.

Summary

• Domo's total revenue for the third quarter of fiscal year 2025 was $79.8 million.
• Subscription revenue reached $71.1 million.
• Billings for the quarter were $73.4 million.
• Subscription Remaining Performance Obligations (RPO) totaled $354.1 million, a 3% year-over-year increase.
• Subscription RPO expected to be recognized beyond twelve months was $145.9 million, a 14% year-over-year increase.
• Net cash used in operating activities was $13.7 million.
• Adjusted free cash flow was negative $13.8 million.
• The GAAP operating margin was negative 14%, while the non-GAAP operating margin was 3%.
• GAAP net loss was $18.8 million, or $0.48 per share.
• Non-GAAP net loss was $3.2 million, or $0.08 per share.
• Cash and cash equivalents stood at $40.9 million as of October 31, 2024.
• Domo expects Q4 fiscal 2025 revenue to be between $77.5 million and $78.5 million.
• The company anticipates a non-GAAP net loss per share between $0.13 and $0.17 for Q4 fiscal 2025.
• Full year fiscal 2025 revenue is projected to be between $315.5 million and $316.5 million.
• The full year non-GAAP net loss per share is expected to be between $0.60 and $0.64.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly negative. While there are positive aspects like RPO growth and industry recognition, the negative cash flow, GAAP losses, and reduced cash reserves temper the overall outlook. The company is showing growth but is not yet profitable.

Positives

• Subscription RPO saw a 3% year-over-year increase, indicating future revenue growth.
• Subscription RPO expected to be recognized beyond twelve months increased by 14% year-over-year, showing strong long-term contract growth.
• Domo achieved a 3% non-GAAP operating margin, demonstrating improved operational efficiency.
• The company received multiple industry recognitions, highlighting its product innovation and customer value.
• Domo's focus on ecosystem-led growth, consumption-based contracts, and AI innovation is showing promising momentum.

Negatives

• Net cash used in operating activities was $13.7 million.
• Adjusted free cash flow was negative $13.8 million.
• GAAP operating margin was negative 14%.
• GAAP net loss was $18.8 million, or $0.48 per share.
• Non-GAAP net loss was $3.2 million, or $0.08 per share.
• Cash and cash equivalents decreased to $40.9 million.

Risks

• The company is experiencing negative operating cash flow and negative adjusted free cash flow.
• Domo is currently operating at a GAAP net loss and a non-GAAP net loss.
• The company's cash and cash equivalents have decreased significantly.
• The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.

Future Outlook

Domo expects Q4 fiscal 2025 revenue to be between $77.5 million and $78.5 million, with a non-GAAP net loss per share between $0.13 and $0.17. Full year fiscal 2025 revenue is projected to be between $315.5 million and $316.5 million, with a non-GAAP net loss per share between $0.60 and $0.64.

Management Comments

• Josh James, founder and CEO, stated that their focus on ecosystem-led growth, consumption-based contracts, and AI innovation is showing promising momentum.
• Josh James also mentioned that the data and AI landscape is evolving to create new market opportunities for Domo, and they feel confident they are in the right position to capitalize on this moment.

Industry Context

The announcement highlights Domo's position in the competitive business intelligence and data analytics market, emphasizing its focus on AI and cloud-based solutions. The company's recognition in industry reports underscores its commitment to product innovation and customer value, which is crucial in this rapidly evolving sector.

Comparison to Industry Standards

• Domo's subscription revenue of $71.1 million is comparable to other mid-sized SaaS companies in the analytics space, such as Tableau (now part of Salesforce) and Looker (now part of Google Cloud), although these companies are generally larger.
• The 3% year-over-year increase in Subscription RPO is a moderate growth rate, while the 14% increase in Subscription RPO expected to be recognized beyond twelve months is a positive sign for future revenue, indicating strong long-term contracts.
• The negative GAAP operating margin of 14% and the non-GAAP operating margin of 3% suggest that Domo is still working towards profitability, which is not uncommon for growth-focused SaaS companies. Companies like Snowflake and Datadog, while larger, have also experienced periods of negative operating margins while scaling.
• Domo's adjusted free cash flow of negative $13.8 million is a concern, as many SaaS companies aim for positive free cash flow to demonstrate financial sustainability. This is an area where Domo needs to improve compared to more mature SaaS businesses.

Stakeholder Impact

• Shareholders may be concerned about the company's net losses and negative cash flow.
• Employees may be impacted by the company's financial performance and future strategic decisions.
• Customers may benefit from Domo's continued product innovation and focus on AI.
• Suppliers and creditors may be impacted by the company's financial health.

Next Steps

• Domo plans to host a conference call to review its fiscal 2025 third quarter financial results and discuss its financial outlook.
• The company will continue to focus on ecosystem-led growth, consumption-based contracts, and AI innovation.

Key Dates

Keywords

SaaS, Business Intelligence, Data Analytics, Cloud Platform, Subscription Revenue, Financial Results, AI, RPO, Non-GAAP, Ecosystem Growth