8-K: Domo Reports Strong Q3 FY26, Projects Fastest Billings Growth

Domo, Inc. announced its fiscal third quarter 2026 financial results, highlighting significant improvements in profitability and cash flow, alongside optimistic Q4 guidance.

Summary

• Total revenue for Q3 Fiscal 2026 was $79.4 million.
• Subscription revenue reached $71.9 million.
• Billings were $73.2 million.
• Subscription Remaining Performance Obligations (RPO) increased by 15% year-over-year to $405.9 million as of October 31, 2025.
• Current subscription RPO increased by 3% year-over-year to $214.1 million as of October 31, 2025.
• Net cash provided by operating activities surged by 125% year-over-year to $3.4 million.
• Adjusted free cash flow increased by 115% year-over-year to $2.1 million.
• GAAP operating margin improved by 5 percentage points year-over-year to negative 9%.
• Non-GAAP operating margin turned positive at 7%, an increase of 4 percentage points year-over-year.
• GAAP net loss significantly narrowed to $10.4 million, or $0.25 per share.
• Non-GAAP net income was $0.3 million, and diluted non-GAAP net income per share was $0.01.
• Cash and cash equivalents stood at $47.9 million as of October 31, 2025.
• Q4 Fiscal 2026 revenue is expected to be in the range of $78.0 million to $79.0 million, with non-GAAP net loss per share between $0.01 and $0.05.
• Full Year Fiscal 2026 revenue is expected to be in the range of $317.5 million to $318.5 million, with non-GAAP net loss per share between $0.07 and $0.11.

Sentiment

Score: 8

Explanation: The company demonstrated significant improvements in profitability metrics, cash flow generation, and operating margins, moving towards non-GAAP net income. While total revenue and billings saw slight declines, the strong growth in RPO and positive outlook for future billings growth and retention, coupled with industry recognition, indicate a strong positive trajectory.

Positives

• Subscription Remaining Performance Obligations (RPO) increased by 15% year-over-year to $405.9 million.
• Net cash provided by operating activities increased by 125% year-over-year to $3.4 million.
• Adjusted free cash flow increased by 115% year-over-year to $2.1 million.
• GAAP operating margin improved by 5 percentage points year-over-year to negative 9%.
• Non-GAAP operating margin turned positive at 7%, an increase of 4 percentage points year-over-year.
• GAAP net loss significantly narrowed to $10.4 million from $18.761 million in the prior year's quarter.
• Achieved non-GAAP net income of $0.3 million, a significant improvement from a non-GAAP net loss of $3.153 million in the prior year's quarter.
• Management expects to be free cash flow positive for the full year and each quarter within the year.
• Guidance for Q4 Fiscal 2026 reflects the fastest billings growth seen in over three years.
• Management expects a marked improvement in gross retention in the next quarter and into next year.
• Received multiple industry recognitions, including #1 in the 2025 Agentic AI Report by Dresner Advisory Services and named a Leader in the KMWorld 2025 Leader Group for Agentic AI.

Negatives

• Total revenue slightly decreased to $79.4 million from $79.764 million in the prior year's quarter.
• Billings slightly decreased to $73.2 million from $73.396 million in the prior year's quarter.
• Current subscription RPO only increased by 3% year-over-year to $214.1 million, indicating slower short-term growth compared to total RPO.
• Still reported a GAAP net loss of $10.4 million for the quarter.
• Q4 Fiscal 2026 guidance projects a non-GAAP net loss per share between $0.01 and $0.05.
• Full Year Fiscal 2026 guidance projects a non-GAAP net loss per share between $0.07 and $0.11.

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 from those expected or implied.
• Potential risks and uncertainties are included under the caption 'Risk Factors' and elsewhere in filings with the SEC, including the Annual Report on Form 10-K filed on April 4, 2025.

Future Outlook

Domo expects Q4 Fiscal 2026 revenue to be between $78.0 million and $79.0 million, with a non-GAAP net loss per share between $0.01 and $0.05. For the full fiscal year 2026, revenue is projected to be in the range of $317.5 million to $318.5 million, and non-GAAP net loss per share is expected to be between $0.07 and $0.11. The company anticipates being free cash flow positive for the full year and each quarter, and projects the fastest billings growth in over three years for Q4, along with marked improvement in gross retention into next year.

Management Comments

• "Our ecosystem strategy is working."
• "We expect to be free cash flow positive for the year and each quarter within the year."
• "Our guidance for Q4 reflects the fastest billings growth we've seen in over three years, and we expect to see a marked improvement in gross retention this next quarter and into next year."
• "We believe that these are all strong indications of our ability to deliver profitable, sustainable growth."

Industry Context

Domo's recent recognitions from leading industry analysts like Dresner Advisory Services, KMWorld, Nucleus Research, and CRN for its Agentic AI, Embedded Analytics, and Business Intelligence solutions indicate strong positioning and relevance in the evolving data and AI market. The focus on leveraging data and AI to drive value aligns with broader industry trends emphasizing data-driven decision-making and the increasing adoption of AI technologies across enterprises.

Comparison to Industry Standards

• The filing does not provide specific numerical comparisons to comparable companies, projects, or industry benchmarks.
• Domo was ranked #1 in the 2025 Agentic AI Report by Dresner Advisory Services, indicating a leading position in this specific segment.
• Domo was named a Leader in the KMWorld 2025 Leader Group for Agentic AI, suggesting strong competitive standing.
• Domo was named a Leader in the Nucleus Research Embedded Analytics Technology Value Matrix 2025, highlighting its strength in embedded analytics.
• Domo was awarded "Best Technology" in the CRN 2025 Products of the Year Awards for Best Business Intelligence & Data Analytics, showcasing product excellence.
• Domo was ranked #2 overall in Dresner Advisory Services' Analytical Data Products Report, demonstrating high overall performance in data products.

Stakeholder Impact

• Shareholders: Positive impact due to improved profitability, cash flow, and optimistic future guidance, potentially leading to increased shareholder value.
• Customers: Continued innovation and recognition in AI and data products suggest enhanced value proposition and product offerings.
• Employees: Strong performance and growth trajectory could lead to job stability and potential opportunities.

Next Steps

• Host a conference call on December 4, 2025, to discuss financial results and outlook.
• Work towards achieving free cash flow positive for the full fiscal year and each quarter.
• Focus on driving the fastest billings growth in over three years in Q4 Fiscal 2026.
• Aim for marked improvement in gross retention in the next quarter and into next year.

Key Dates

Recommendation

Domo's Q3 Fiscal 2026 results show a clear positive inflection point, particularly in profitability and cash flow generation, with non-GAAP net income achieved and significant improvements in operating margins. The 125% year-over-year increase in net cash from operations and 115% increase in adjusted free cash flow are strong indicators of operational efficiency and financial health. While total revenue and billings saw minor declines, the 15% growth in Subscription RPO and management's guidance for the fastest billings growth in over three years for Q4, coupled with expected improvements in gross retention, suggest a re-acceleration of growth. The company's strong industry recognition for its AI and data products further validates its market position and innovation. These factors, combined with the expectation of sustained free cash flow positivity, make Domo an attractive 'buy' for investors looking for a turnaround story with strong underlying operational improvements and future growth potential in the AI and data analytics space.

Keywords

Domo, Financial Results, Q3 2026, Earnings, Subscription Revenue, Cash Flow, Operating Margin, AI, Data Products, Agentic AI, Embedded Analytics, Business Intelligence, Data Analytics, Software, Cloud