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Domo Announces Fiscal 2020 Third Quarter Financial Results

/EIN News/ -- SILICON SLOPES, Utah, Dec. 05, 2019 (GLOBE NEWSWIRE) -- Domo, Inc. (Nasdaq: DOMO) today announced results for the fiscal 2020 third quarter ended October 31, 2019.

Fiscal Third Quarter Results

  • Total revenue was $44.8 million, an increase of 22% year over year
  • Subscription revenue was $37.8 million, an increase of 24% year over year
  • Subscription revenue represented 85% of total revenue
  • Billings were $44.4 million or 15% year-over-year growth
  • Net cash used in operating activities was $19.5 million, an improvement of 36% year over year
  • Adjusted net cash used in operating activities was $16.2 million, an improvement of 47% year over year
  • Subscription gross margin was 76%, an improvement of 3 percentage points from Q3 FY19
  • GAAP operating margin improved by 22 percentage points year over year
  • Non-GAAP operating margin improved by 21 percentage points year over year
  • GAAP operating expenses increased 6% year over year
  • Non-GAAP operating expenses increased 5% year over year
  • GAAP net loss was $29.1 million, and GAAP net loss per share was $1.05, based on 27.6 million weighted-average shares outstanding
  • Non-GAAP net loss was $23.6 million, and non-GAAP net loss per share was $0.85, based on 27.6 million weighted-average shares outstanding
  • Cash, cash equivalents and short-term investments were $115.9 million as of October 31, 2019

Comments
"I am very pleased with our 24% subscription revenue growth and our execution in Q3, closing several of the largest deals in company history. We provide a differentiated solution that helps customers quickly, easily and securely put data to work at scale," said Josh James, Domo founder and CEO. "In Q3, we were once again able to make meaningful progress on reducing our cash burn, coming in well ahead of our guidance. Consistent with our previous statements, we remain committed to achieving cash flow positive status with the cash on our balance sheet and continue to be optimistic about the opportunity in front of us."

Recent Highlights
We believe the following points and accolades 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 a partnership with Snowflake, which includes an API integration and co-selling initiative, to help customers more easily leverage the flexibility and scalability of the cloud. With this partnership, customers can leverage Domo's iPaaS capabilities to manage their entire data ecosystem and easily bring additional sources of data from across their organization into Snowflake.
     
  • Domo announced a new application with Square to help merchants with multiple Square accounts to easily unlock insights and gain more value from that data.
     
  • Domo was named a Leader in two G2 Crowd reports, which were based on real user feedback. In the G2 Crowd BI platforms report, Domo was named the #1 vendor, receiving high scores for ease of use, quality support and ease of doing business. Domo also was a Leader in the Enterprise BI Platforms category. Domo achieved a user satisfaction rating of 90 and 94 percent in each respective report. This is the fourth consecutive year Domo has been ranked a G2 Crowd Leader.
     
  • Domo was ranked an Overall Credibility and Experience Leader in Dresner Advisory Services' 2019 SME Business Intelligence Market Study.

Business Outlook
Based on information available as of December 5, 2019, Domo is providing the following guidance for Q4 and full year fiscal 2020:

Q4 Fiscal 2020

  • Revenue is expected to be in the range of $45.0 million to $46.0 million
  • Non-GAAP net loss per share is expected to be between $0.94 and $0.98 based on 28.1 million weighted-average shares outstanding

Full Year Fiscal 2020

  • Revenue is expected to be in the range of $172.2 million to $173.2 million
  • Non-GAAP net loss per share is expected to be between $3.88 and $3.92 based on 27.5 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 2020 third 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#3483388. A replay will be available via webcast or at (855) 859-2056 or (404) 537-3406 until midnight (ET) December 19, 2019.

About Domo
Domo’s mission is to be the operating system for business, digitally connecting all your people, your data and your systems, empowering them to collaborate better, make better decisions and be more efficient, right from their phones. Domo works with many of the world’s leading and most progressive brands across multiple industries including retail, media and entertainment, manufacturing, finance and more. For more information about Domo (Nasdaq: DOMO), visit www.domo.com. You can also follow Domo on TwitterFacebook 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 Q4 fiscal quarter and full fiscal year 2020, 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 15, 2019 and the Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2019 expected to be filed with the SEC on or about December 11, 2019.  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 is a registered trademark of Domo, Inc.

Contacts:
Domo, Inc.
Media: PR@domo.com
Investors: IR@domo.com


 
Domo, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
                 
    Three Months Ended   Nine Months Ended
    October 31,   October 31,
      2018       2019       2018       2019  
Revenue:                
Subscription   $ 30,398     $ 37,841     $ 85,227     $ 107,105  
Professional services and other     6,446       6,925       17,829       20,119  
Total revenue     36,844       44,766       103,056       127,224  
Cost of revenue:                
Subscription (1)     8,193       9,045       24,514       25,896  
Professional services and other (1)     4,734       5,418       12,497       15,582  
Total cost of revenue     12,927       14,463       37,011       41,478  
Gross profit     23,917       30,303       66,045       85,746  
                 
Operating expenses:                
Sales and marketing (1)     28,034       29,784       101,692       95,234  
Research and development (1)     18,803       17,578       58,786       51,723  
General and administrative (1), (2), (3)     7,055       9,590       21,906       26,882  
Total operating expenses     53,892       56,952       182,384       173,839  
Loss from operations     (29,975 )     (26,649 )     (116,339 )     (88,093 )
                 
Other expense, net (1)     (2,371 )     (2,368 )     (7,188 )     (7,175 )
Loss before provision for income taxes     (32,346 )     (29,017 )     (123,527 )     (95,268 )
Provision for income taxes     199       84       909       529  
Net loss   $ (32,545 )   $ (29,101 )   $ (124,436 )   $ (95,797 )
                 
Net loss per share (basic and diluted)   $ (1.24 )   $ (1.05 )   $ (9.61 )   $ (3.50 )
Weighted-average number of shares (basic and diluted)     26,338       27,638       12,954       27,345  
                 
                 
(1) Includes stock-based compensation expenses, as follows:                
Cost of revenue:                
Subscription   $ 74     $ 151     $ 144     $ 341  
Professional services and other     34       123       112       276  
Sales and marketing     1,441       2,135       5,490       8,184  
Research and development     1,630       1,493       5,106       4,852  
General and administrative     1,461       1,533       6,056       3,953  
Other income, net     14       47       5       142  
  Total stock-based compensation expenses   $ 4,654     $ 5,482     $ 16,913     $ 17,748  
                 
(2) Includes amortization of certain intangible assets, as follows:                
General and administrative   $ 20     $ 20     $ 60     $ 60  
                 
(3) Includes reversal of contingent tax-related accrual, as follows:                
General and administrative   $ -     $ -     $ (3,513 )   $ (1,293 )
                 



Domo, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
       
  January 31,   October 31,
    2019       2019  
Assets      
Current assets:      
Cash and cash equivalents $ 176,973     $ 93,511  
Short-term investments   -       22,426  
Accounts receivable, net   48,421       34,051  
Contract acquisition costs   10,425       12,156  
Prepaid expenses and other current assets   10,935       10,406  
Total current assets   246,754       172,550  
       
Property and equipment, net   12,595       12,891  
Contract acquisition costs, noncurrent   18,030       16,723  
Intangible assets, net   4,415       3,954  
Goodwill   9,478       9,478  
Other assets   1,360       2,268  
Total assets $ 292,632     $ 217,864  
       
Liabilities and stockholders' equity (deficit)      
Current liabilities:      
Accounts payable $ 2,609     $ 2,900  
Accrued expenses and other current liabilities   48,139       42,828  
Current portion of deferred revenue   88,959       88,214  
Total current liabilities   139,707       133,942  
       
Deferred revenue, noncurrent   4,943       2,751  
Other liabilities, noncurrent   6,210       6,266  
Long-term debt   97,245       100,086  
Total liabilities   248,105       243,045  
       
Commitments and contingencies      
       
Stockholders' equity (deficit):      
Common stock   26       28  
Additional paid-in capital   956,145       982,239  
Accumulated other comprehensive income   438       431  
Accumulated deficit   (912,082 )     (1,007,879 )
Total stockholders' equity (deficit)   44,527       (25,181 )
Total liabilities and stockholders' equity (deficit) $ 292,632     $ 217,864  
       
       



Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
               
  Three Months Ended   Nine Months Ended
  October 31,   October 31,
    2018       2019       2018       2019  
Cash flows from operating activities              
Net loss $ (32,545 )   $ (29,101 )   $ (124,436 )   $ (95,797 )
Adjustments to reconcile net loss to net cash used in operating activities:              
Depreciation and amortization   2,190       1,691       6,752       5,307  
Amortization of contract acquisition costs   2,117       3,008       5,750       8,503  
Stock-based compensation   4,654       5,482       16,913       17,748  
Other, net   648       819       (1,928 )     816  
Changes in operating assets and liabilities:              
Accounts receivable, net   (2,539 )     (2,915 )     5,679       14,370  
Contract acquisition costs   (3,461 )     (4,031 )     (9,243 )     (9,017 )
Prepaid expenses and other assets   646       3,026       (1,747 )     (362 )
Accounts payable   (5,188 )     862       (6,476 )     304  
Accrued and other liabilities   849       1,978       (42 )     (3,876 )
Deferred revenue   1,947       (338 )     5,113       (2,937 )
  Net cash used in operating activities   (30,682 )     (19,519 )     (103,665 )     (64,941 )
               
Cash flows from investing activities              
Purchases of property and equipment   (1,468 )     (1,683 )     (4,673 )     (4,860 )
Purchases of securities available for sale   -       (14,387 )     -       (93,331 )
Proceeds from maturities of securities available for sale   -       28,000       -       71,500  
  Net cash (used in) provided by investing activities   (1,468 )     11,930       (4,673 )     (26,691 )
               
Cash flows from financing activities              
Proceeds from initial public offering, net of underwriting discounts and commissions   -       -       206,627       -  
Payments of costs related to initial public offering   (650 )     -       (4,063 )     -  
Proceeds from issuance of convertible preferred stock, net of issuance costs   -       -       (87 )     -  
Proceeds from shares issued in connection with employee stock purchase plan   -       3,294       -       7,812  
Shares repurchased for tax withholdings on vesting of restricted stock   -       (98 )     -       (1,110 )
Debt proceeds, net of issuance costs   -       -       49,651       -  
Proceeds from exercise of stock options   4       70       276       1,501  
Principal payments on capital lease obligations   -       -       (44 )     -  
Net cash provided by (used in) financing activities   (646 )     3,266       252,360       8,203  
Effect of exchange rate changes on cash and cash equivalents   (7 )     (105 )     5       (33 )
Net increase (decrease) in cash and cash equivalents   (32,803 )     (4,428 )     144,027       (83,462 )
Cash and cash equivalents at beginning of period   238,802       97,939       61,972       176,973  
Cash and cash equivalents at end of period $ 205,999     $ 93,511     $ 205,999     $ 93,511  
               



Domo, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)
                   
      Three Months Ended   Nine Months Ended
      October 31,   October 31,
        2018       2019       2018       2019  
Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:                  
Revenue:                  
Subscription     $ 30,398     $ 37,841     $ 85,227     $ 107,105  
Cost of revenue:                  
Subscription       8,193       9,045       24,514       25,896  
Subscription gross profit on a GAAP basis       22,205       28,796       60,713       81,209  
Subscription gross margin on a GAAP basis       73 %     76 %     71 %     76 %
                   
Stock-based compensation       74       151       144       341  
Subscription gross profit on a non-GAAP basis     $ 22,279     $ 28,947     $ 60,857     $ 81,550  
Subscription gross margin on a non-GAAP basis       73 %     76 %     71 %     76 %
                   
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     $ 53,892     $ 56,952     $ 182,384     $ 173,839  
Stock-based compensation       (4,532 )     (5,161 )     (16,652 )     (16,989 )
Amortization of certain intangible assets       (20 )     (20 )     (60 )     (60 )
Reversal of contingent tax-related accrual       -       -       3,513       1,293  
Total operating expenses on a non-GAAP basis     $ 49,340     $ 51,771     $ 169,185     $ 158,083  
                   
Reconciliation of Operating Loss on a GAAP Basis to Operating Loss on a Non-GAAP Basis:                  
Operating loss on a GAAP basis     $ (29,975 )   $ (26,649 )   $ (116,339 )   $ (88,093 )
Stock-based compensation       4,640       5,435       16,908       17,606  
Amortization of certain intangible assets       20       20       60       60  
Reversal of contingent tax-related accrual       -       -       (3,513 )     (1,293 )
Operating loss on a non-GAAP basis     $ (25,315 )   $ (21,194 )   $ (102,884 )   $ (71,720 )
                   
Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis:                  
Operating margin on a GAAP basis       (81 )%     (60 )%     (113 )%     (69 )%
Stock-based compensation       12       13       16       14  
Amortization of certain intangible assets       -       -       -       -  
Reversal of contingent tax-related accrual       -       -       (3 )     (1 )
Operating margin on a non-GAAP basis       (69 )%     (47 )%     (100 )%     (56 )%
                   
Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis:                  
Net loss on a GAAP basis     $ (32,545 )   $ (29,101 )   $ (124,436 )   $ (95,797 )
Stock-based compensation       4,654       5,482       16,913       17,748  
Amortization of certain intangible assets       20       20       60       60  
Reversal of contingent tax-related accrual       -       -       (3,513 )     (1,293 )
Net loss on a non-GAAP basis     $ (27,871 )   $ (23,599 )   $ (110,976 )   $ (79,282 )
                   
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     $ (1.24 )   $ (1.05 )   $ (9.61 )   $ (3.50 )
Stock-based compensation       0.18       0.20       1.31       0.65  
Amortization of certain intangible assets       -       -       -       -  
Reversal of contingent tax-related accrual       -       -       (0.27 )     (0.05 )
Net loss per share on a non-GAAP basis     $ (1.06 )   $ (0.85 )   $ (8.57 )   $ (2.90 )
                   
Billings:                  
Total revenue     $ 36,844     $ 44,766     $ 103,056     $ 127,224  
Add:                  
Deferred revenue (end of period)       72,862       88,214       72,862       88,214  
Deferred revenue, noncurrent (end of period)       3,207       2,751       3,207       2,751  
Less:                  
Deferred revenue (beginning of period)       (70,693 )     (87,616 )     (66,712 )     (88,959 )
Deferred revenue, noncurrent (beginning of period)       (3,429 )     (3,687 )     (4,244 )     (4,943 )
Increase (decrease) in deferred revenue (current and noncurrent)       1,947       (338 )     5,113       (2,937 )
Billings     $ 38,791     $ 44,428     $ 108,169     $ 124,287  
                   
Reconciliation of Net Cash Used in Operating Activities to Adjusted Net Cash Used in Operating Activities:                  
Net cash used in operating activities     $ (30,682 )   $ (19,519 )   $ (103,665 )   $ (64,941 )
Proceeds from shares issued in connection with employee stock purchase plan       -       3,294       -       7,812  
Adjusted net cash used in operating activities     $ (30,682 )   $ (16,225 )   $ (103,665 )   $ (57,129 )
                   
                   

 



 

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