Domo Announces Fiscal 2019 Third Quarter Financial Results

| Source: Domo, Inc. Domo, Inc.

30% Year-Over-Year Growth in Total Revenue

29% Year-Over-Year Growth in Billings

SILICON SLOPES, Utah, Dec. 06, 2018 (GLOBE NEWSWIRE) -- Domo, Inc. (Nasdaq: DOMO), provider of the leading cloud-based operating system for business, today announced results for the fiscal 2019 third quarter ended October 31, 2018.

Fiscal Third Quarter Results

  • Total revenue was $36.8 million, an increase of 30% year over year
  • Subscription revenue represented 83% of total revenue
  • Billings were $38.8 million or 29% year-over-year growth
  • Subscription gross margin was 73% compared to 60% in Q3 fiscal 2018
  • GAAP operating margin improved by 73 percentage points year over year
  • Non-GAAP operating margin improved by 77 percentage points year over year
  • GAAP operating expenses decreased 10% year over year
  • Non-GAAP operating expenses decreased 14% year over year
  • GAAP net loss was $32.5 million, and GAAP net loss per share was $1.24, based on 26.3 million weighted-average shares outstanding
  • Non-GAAP net loss was $27.9 million, and non-GAAP net loss per share was $1.06, based on 26.3 million weighted-average shares outstanding
  • Cash and cash equivalents were $206.0 million

Comments
"We executed very well in Q3 as our results show, and we expect that strong execution to continue into Q4 and into fiscal 2020," said Josh James, Domo founder and CEO. "Demand for our products and services continues to grow as enterprises around the globe embrace digital transformation and push our products deeper into their business processes. We have a very large multi-billion-dollar market opportunity in front of us. I’m incredibly proud of our team, the efficiencies they found, and their enormous contributions in helping us deliver on all our commitments."

"Q3 was another strong quarter for us," said Bruce Felt, CFO. "We continued to improve execution across all functions of the organization. We are pleased with the productivity gains from sales. As we displayed this quarter, we will continue to focus on realizing more out of our cost structure next quarter to drive growth."

Recent Highlights
We believe the following points and accolades are leading indicators of what’s to come in our business through our commitment to product innovation and customer success:

Business Outlook
Based on information available as of December 6, 2018, Domo is providing the following guidance for Q4 and full year fiscal 2019:

Q4 Fiscal 2019

  • Revenue is expected to be in the range of $37.5 million to $37.9 million
  • Non-GAAP net loss per share is expected to be between $1.23 to $1.27 based on 26.5 million weighted-average shares outstanding

Full Year Fiscal 2019

  • Revenue is expected to be in the range of $140.6 million to $141.0 million
  • Non-GAAP net loss per share is expected to be between $8.79 to $8.83 based on 16.4 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 2019 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 www.domo.com/IR. A live dial-in is available domestically at (877) 491-5762 and internationally at (763) 416-6939, with conference ID#8473747. A replay will be available via webcast or at (855) 859-2056 or (404) 537-3406 until midnight (ET) December 20, 2018.

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 Twitter, Facebook 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.

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 and non-GAAP net loss per share. In computing these measures, we exclude the effects of stock-based compensation expense, amortization of intangible assets and the reversal of continent tax-related accruals. 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 2019, 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 Prospectus related to our initial public offering filed with the SEC on June 29, 2018 and the Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2018 expected to be filed with the SEC on or about December 14, 2018.  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.

 
 
Domo, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 
 Three Months Ended Nine Months Ended
 October 31, October 31,
 2017 2018 2017 2018
Revenue:       
Subscription$  22,656  $  30,398  $  62,811  $  85,227 
Professional services and other   5,646     6,446     15,640     17,829 
Total revenue   28,302     36,844     78,451     103,056 
Cost of revenue: 
Subscription (1)   9,102     8,193     23,608     24,514 
Professional services and other (1)   3,292     4,734     9,177     12,497 
Total cost of revenue   12,394     12,927     32,785     37,011 
Gross profit   15,908     23,917     45,666     66,045 
 
Operating expenses: 
Sales and marketing (1)   33,552     28,034     100,482     101,692 
Research and development (1)   18,787     18,803     58,681     58,786 
General and administrative (1), (2), (3)   7,280     7,055     21,813     21,906 
Total operating expenses   59,619     53,892     180,976     182,384 
Loss from operations   (43,711)    (29,975)    (135,310)    (116,339)
 
Other (expense) income, net   (74)    (2,371)    251     (7,188)
Loss before provision for income taxes   (43,785)    (32,346)    (135,059)    (123,527)
Provision for income taxes   99     199     296     909 
Net loss$  (43,884) $  (32,545) $  (135,355) $  (124,436)
        
Net loss per share (basic and diluted)$  (27.27) $  (1.24) $  (85.45) $  (9.61)
Weighted-average number of shares (basic and diluted)   1,609     26,338     1,584     12,954 
                
                
(1) Includes stock-based compensation expenses, as follows: 
Cost of revenue: 
Subscription$  13  $  74  $  36  $  144 
Professional services and other   10     34     31     112 
Sales and marketing   453     1,441     1,505     5,490 
Research and development   628     1,630     1,745     5,106 
General and administrative   1,273     1,461     3,820     6,056 
Other income, net   8     14     25     5 
Total stock-based compensation expenses$  2,385  $  4,654  $  7,162  $  16,913 
        
(2) Includes amortization of 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)
                

 

Domo, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
 January 31, October 31,
 2018  2018 
Assets   
Current assets: 
Cash and cash equivalents$  61,972  $  205,999 
Accounts receivable, net   35,484     29,805 
Contract acquisition costs   9,661     8,795 
Prepaid expenses and other current assets   6,144     8,063 
Total current assets   113,261     252,662 
 
Property and equipment, net   14,952     12,664 
Contract acquisition costs, noncurrent   11,521     15,486 
Intangible assets, net   3,026     4,569 
Goodwill   9,478     9,478 
Other assets   3,117     1,671 
Total assets$  155,355  $  296,530 
    
Liabilities, convertible preferred stock and stockholders' (deficit) equity 
Current liabilities: 
Accounts payable$  12,121  $  4,247 
Accrued expenses and other current liabilities   49,428     46,603 
Current portion of deferred revenue   66,712     72,862 
Total current liabilities   128,261     123,712 
 
Deferred revenue, noncurrent   4,244     3,207 
Other liabilities, noncurrent   5,324     4,658 
Long-term debt   46,332     98,094 
Total liabilities   184,161     229,671 
 
Commitments and contingencies 
 
Convertible preferred stock   693,158     -  
Stockholders' (deficit) equity: 
Common stock   2     26 
Additional paid-in capital   35,301     948,686 
Accumulated other comprehensive income   506     356 
Accumulated deficit   (757,773)    (882,209)
Total stockholders' (deficit) equity   (721,964)    66,859 
Total liabilities and stockholders' (deficit) equity$  155,355  $  296,530 
    

 

Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
 Three Months Ended Nine Months Ended
 October 31, October 31,
 2017 2018 2017 2018
Cash flows from operating activities       
Net loss $  (43,884) $  (32,545) $  (135,355) $  (124,436)
Adjustments to reconcile net loss to net cash used in operating activities:   -      -   
Depreciation and amortization   1,993     2,170     5,806     6,692 
Amortization of intangible assets   20     20     60     60 
Amortization of contract acquisition costs   2,277     2,117     6,655     5,750 
Stock-based compensation   2,385     4,654     7,162     16,913 
Reversal of contingent tax-related accrual   -      -      -      (3,513)
Capitalized interest   -      648     -      1,641 
Remeasurement of warrant liability   -      -      -      (56)
Changes in operating assets and liabilities: 
Accounts receivable, net   (922)    (2,539)    (570)    5,679 
Contract acquisition costs   (3,856)    (3,461)    (10,669)    (9,243)
Prepaid expenses and other assets   (812)    646     (641)    (1,747)
Accounts payable   1,449     (5,188)    2,525     (6,476)
Accrued and other liabilities   4,827     849     3,500     (42)
Deferred revenue   1,713     1,947     5,691     5,113 
  Net cash used in operating activities   (34,810)    (30,682)    (115,836)    (103,665)
 
Cash flows from investing activities 
Purchases of property and equipment   (913)    (1,468)    (5,091)    (4,673)
 
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   (15)    -      99,071     (87)
Debt proceeds, net of issuance costs   -      -      (50)    49,651 
Proceeds from exercise of stock options   238     4     909     276 
Repurchases of common stock   -      -      (121)    -  
Principal payments on capital lease obligations   (9)    -      (27)    (44)
Net cash provided by (used in) financing activities   214     (646)    99,782     252,360 
Effect of exchange rate changes on cash and cash equivalents   (46)    (7)    13     5 
Net (decrease) increase in cash and cash equivalents   (35,555)    (32,803)    (21,132)    144,027 
Cash and cash equivalents at beginning of period   83,407     238,802     68,984     61,972 
Cash and cash equivalents at end of period$  47,852  $  205,999  $  47,852  $  205,999 
        

 

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,
 2017 2018 2017 2018
Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:       
Revenue: 
Subscription$  22,656  $  30,398  $  62,811  $  85,227 
Cost of revenue: 
Subscription   9,102     8,193     23,608     24,514 
Subscription gross profit on a GAAP basis   13,554     22,205     39,203     60,713 
Subscription gross margin on a GAAP basis 60%  73%  62%  71%
 
Stock-based compensation   13     74     36     144 
Subscription gross profit on a non-GAAP basis$  13,567  $  22,279  $  39,239  $  60,857 
Subscription gross margin on a non-GAAP basis 60%  73%  62%  71%
 
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$  59,619  $  53,892  $  180,976  $  182,384 
Stock-based compensation   (2,354)    (4,532)    (7,070)    (16,652)
Amortization of intangible assets   (20)    (20)    (60)    (60)
Reversal of contingent tax-related accrual   -      -      -      3,513 
Total operating expenses on a non-GAAP basis$  57,245  $  49,340  $  173,846  $  169,185 
        
Reconciliation of Operating Loss on a GAAP Basis to Operating Loss on a Non-GAAP Basis: 
Operating loss on a GAAP basis$  (43,711) $  (29,975) $  (135,310) $  (116,339)
Stock-based compensation   2,377     4,640     7,137     16,908 
Amortization of intangible assets   20     20     60     60 
Reversal of contingent tax-related accrual   -      -      -      (3,513)
Operating loss on a non-GAAP basis$  (41,314) $  (25,315) $  (128,113) $  (102,884)
        
Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis: 
Operating margin on a GAAP basis (154)%  (81)%  (172)%  (113)%
Stock-based compensation 8   12   9   16 
Amortization of intangible assets -    -    -    -  
Reversal of contingent tax-related accrual -    -    -    (3) 
Operating margin on a non-GAAP basis (146)%  (69)%  (163)%  (100)%
        
Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis: 
Net loss on a GAAP basis$  (43,884) $  (32,545) $  (135,355) $  (124,436)
Stock-based compensation   2,385     4,654     7,162     16,913 
Amortization of intangible assets   20     20     60     60 
Reversal of contingent tax-related accrual   -      -      -      (3,513)
Net loss on a non-GAAP basis$  (41,479) $  (27,871) $  (128,133) $  (110,976)
        
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$  (27.27) $  (1.24) $  (85.45) $  (9.61)
Stock-based compensation   1.48     0.18     4.52     1.31 
Amortization of intangible assets   0.01     -      0.04     -  
Reversal of contingent tax-related accrual   -      -      -      (0.27)
Net loss per share on a non-GAAP basis$  (25.78) $  (1.06) $  (80.89) $  (8.57)
        
Billings: 
Total revenue$  28,302  $  36,844  $  78,451  $  103,056 
Add: 
Deferred revenue (end of period)   54,047     72,862     54,047     72,862 
Deferred revenue, noncurrent (end of period)   1,580     3,207     1,580     3,207 
Less: 
Deferred revenue (beginning of period)   (52,409)    (70,693)    (48,719)    (66,712)
Deferred revenue, noncurrent (beginning of period)   (1,505)    (3,429)    (1,217)    (4,244)
Increase in deferred revenue (current and noncurrent)   1,713     1,947     5,691     5,113 
Billings$  30,015  $  38,791  $  84,142  $  108,169 
        

Investors / Media Contact
Domo, Inc.

Investors:
IR@domo.com

Media:
PR@domo.com