Domo Announces Fiscal 2020 Second Quarter Financial Results

| Source: Domo, Inc. Domo, Inc.

SILICON SLOPES, Utah, Sept. 05, 2019 (GLOBE NEWSWIRE) -- Domo, Inc. (Nasdaq: DOMO) today announced results for the fiscal 2020 second quarter ended July 31, 2019.

Fiscal Second Quarter Results

  • Total revenue was $41.7 million, an increase of 22% year over year
  • Subscription revenue was $34.9 million, an increase of 24% year over year
  • Subscription revenue represented 84% of total revenue
  • Billings were $38.8 million or 9% year-over-year growth
  • Net cash used in operating activities was $18.7 million, an improvement of 48% year over year
  • Subscription gross margin was 75%, an improvement of 4 percentage points from Q2 FY19
  • GAAP operating margin improved by 59 percentage points year over year
  • Non-GAAP operating margin improved by 40 percentage points year over year
  • GAAP operating expenses decreased 14% year over year
  • Non-GAAP operating expenses decreased 7% year over year
  • GAAP net loss was $31.2 million, and GAAP net loss per share was $1.14, based on 27.4 million weighted-average shares outstanding
  • Non-GAAP net loss was $26.4 million, and non-GAAP net loss per share was $0.96, based on 27.4 million weighted-average shares outstanding
  • Cash, cash equivalents and short-term investments were $133.9 million as of July 31, 2019

Comments

"Our focus on empowering every business decision maker, from the frontline employee to the CEO, with actionable data is having a transformational impact on some of the world's largest companies," said Josh James, Domo founder and CEO. "While we continue to aggressively pursue our growth objectives, in Q2 we executed well on cost controls and improved our cash burn, and we remain committed to achieving cash flow positive status with the cash on our balance sheet.  As we look ahead, we are very 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 and customer success:

Business Outlook

Based on information available as of September 5, 2019, Domo is providing the following guidance for Q3 and full year fiscal 2020:

Q3 Fiscal 2020

  • Revenue is expected to be in the range of $41.5 million to $42.5 million
  • Non-GAAP net loss per share is expected to be between $1.00 and $1.04 based on 27.7 million weighted-average shares outstanding

Full Year Fiscal 2020

  • Revenue is expected to be in the range of $168.0 million to $169.0 million
  • Non-GAAP net loss per share is expected to be between $4.00 and $4.10 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 second 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#6087229. A replay will be available via webcast or at (855) 859-2056 or (404) 537-3406 until midnight (ET) September 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 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, 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 Q3 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 July 31, 2019 expected to be filed with the SEC on or about September 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.

 
Domo, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 
 Three Months Ended Six Months Ended
 July 31, July 31,
   2018     2019     2018     2019  
Revenue:        
Subscription $  28,166  $  34,873  $  54,829  $  69,264 
Professional services and other    6,101     6,787     11,383     13,194 
Total revenue    34,267     41,660     66,212     82,458 
Cost of revenue: 
Subscription (1)    8,265     8,816     16,321     16,851 
Professional services and other (1)    4,253     5,395     7,763     10,164 
Total cost of revenue    12,518     14,211     24,084     27,015 
Gross profit    21,749     27,449     42,128     55,443 
 
Operating expenses: 
Sales and marketing (1)    34,002     29,501     73,658     65,450 
Research and development (1)    20,919     17,046     39,983     34,145 
General and administrative (1), (2), (3)    10,207     9,275     14,851     17,292 
Total operating expenses    65,128     55,822     128,492     116,887 
Loss from operations    (43,379)    (28,373)    (86,364)    (61,444)
 
Other expense, net (1)    (2,898)    (2,482)    (4,817)    (4,807)
Loss before provision for income taxes    (46,277)    (30,855)    (91,181)    (66,251)
Provision for income taxes    107     305     710     445 
Net loss $  (46,384) $  (31,160) $  (91,891) $  (66,696)
        
Net loss per share (basic and diluted) $  (4.41) $  (1.14) $  (14.94) $  (2.45)
Weighted-average number of shares (basic and diluted)    10,509     27,418     6,151     27,196 
 
  
(1) Includes stock-based compensation expenses, as follows: 
Cost of revenue: 
Subscription $  55  $  67  $  70  $  190 
Professional services and other    70     60     78     153 
Sales and marketing    3,744     2,041     4,049     6,049 
Research and development    2,993     1,294     3,476     3,359 
General and administrative    3,330     1,182     4,595     2,420 
Other (expense) income, net    (26)    47     (9)    95 
Total stock-based compensation expenses $  10,166  $  4,691  $  12,259  $  12,266 
        
(2) Includes amortization of certain intangible assets, as follows: 
General and administrative $  20  $  20  $  40  $  40 
 
(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, July 31,
  2019    2019  
Assets   
Current assets: 
Cash and cash equivalents$  176,973  $  97,939 
Short-term investments   -     35,927 
Accounts receivable, net   48,421     31,136 
Contract acquisition costs   10,425     11,349 
Prepaid expenses and other current assets   10,935     13,617 
Total current assets   246,754     189,968 
 
Property and equipment, net   12,595     12,677 
Contract acquisition costs, noncurrent   18,030     16,334 
Intangible assets, net   4,415     4,108 
Goodwill   9,478     9,478 
Other assets   1,360     1,964 
Total assets$  292,632  $  234,529 
    
Liabilities, convertible preferred stock and stockholders' equity (deficit) 
Current liabilities: 
Accounts payable$  2,609  $  2,023 
Accrued expenses and other current liabilities   48,139     40,856 
Current portion of deferred revenue   88,959     87,616 
Total current liabilities   139,707     130,495 
 
Deferred revenue, noncurrent   4,943     3,687 
Other liabilities, noncurrent   6,210     6,140 
Long-term debt   97,245     99,113 
Total liabilities   248,105     239,435 
 
Commitments and contingencies 
 
Stockholders' equity (deficit): 
Common stock   26     27 
Additional paid-in capital   956,145     973,473 
Accumulated other comprehensive income   438     372 
Accumulated deficit   (912,082)    (978,778)
Total stockholders' equity (deficit)   44,527     (4,906)
Total liabilities and stockholders' equity (deficit)$  292,632  $  234,529 
 
 

 

 
Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
 Three Months Ended Six Months Ended
 July 31, July 31,
   2018     2019     2018     2019  
Cash flows from operating activities       
Net loss $  (46,384) $  (31,160) $  (91,891) $  (66,696)
Adjustments to reconcile net loss to net cash used in operating activities: 
Depreciation and amortization   2,277     1,852     4,562     3,616 
Amortization of contract acquisition costs   1,906     2,817     3,633     5,495 
Stock-based compensation   10,166     4,691     12,259     12,266 
Other, net   604     656     (2,576)    (3)
Changes in operating assets and liabilities: 
Accounts receivable, net   1,152     5,071     8,218     17,285 
Contract acquisition costs   (3,859)    (2,924)    (5,782)    (4,986)
Prepaid expenses and other assets   (2,995)    1,105     (2,393)    (3,388)
Accounts payable   (5,716)    (1,109)    (1,288)    (558)
Accrued and other liabilities   5,356     3,123     (891)    (5,854)
Deferred revenue   1,397     (2,866)    3,166     (2,599)
  Net cash used in operating activities   (36,096)    (18,744)    (72,983)    (45,422)
 
Cash flows from investing activities 
Purchases of property and equipment   (1,588)    (1,703)    (3,205)    (3,177)
Purchases of securities available for sale   -     (15,936)    -     (78,944)
Proceeds from maturities and redemption of securities available for sale   -     43,500     -     43,500 
  Net cash (used in) provided by investing activities   (1,588)    25,861     (3,205)    (38,621)
 
Cash flows from financing activities 
Proceeds from initial public offering, net of underwriting discounts and commissions   206,627     -     206,627     - 
Payments of costs related to initial public offering   (2,102)    -     (3,413)    - 
Proceeds from issuance of convertible preferred stock, net of issuance costs   -     -     (87)    - 
Proceeds from shares issued in connection with employee stock purchase plan   -     -     -     4,518 
Shares repurchased for tax withholdings on vesting of restricted stock   -     (112)    -     (1,012)
Debt proceeds, net of issuance costs   (23)    -     49,651     - 
Proceeds from exercise of stock options   60     93     272     1,431 
Principal payments on capital lease obligations   -     -     (44)    - 
Net cash provided by (used in) financing activities   204,562     (19)    253,006     4,937 
Effect of exchange rate changes on cash and cash equivalents   (12)    78     12     72 
Net increase (decrease) in cash and cash equivalents   166,866     7,176     176,830     (79,034)
Cash and cash equivalents at beginning of period   71,936     90,763     61,972     176,973 
Cash and cash equivalents at end of period$  238,802  $  97,939  $  238,802  $  97,939 
        

 

 
Domo, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)
 
 Three Months Ended Six Months Ended
 July 31, July 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 $  28,166  $  34,873  $  54,829  $  69,264 
Cost of revenue: 
Subscription    8,265     8,816     16,321     16,851 
Subscription gross profit on a GAAP basis    19,901     26,057     38,508     52,413 
Subscription gross margin on a GAAP basis  71%  75%  70%  76%
 
Stock-based compensation    55     67     70     190 
Subscription gross profit on a non-GAAP basis $  19,956  $  26,124  $  38,578  $  52,603 
Subscription gross margin on a non-GAAP basis  71%  75%  70%  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 $  65,128  $  55,822  $  128,492  $  116,887 
Stock-based compensation    (10,067)    (4,517)    (12,120)    (11,828)
Amortization of certain intangible assets    (20)    (20)    (40)    (40)
Reversal of contingent tax-related accrual    -     -     3,513     1,293 
Total operating expenses on a non-GAAP basis $  55,041  $  51,285  $  119,845  $  106,312 
        
Reconciliation of Operating Loss on a GAAP Basis to Operating Loss on a Non-GAAP Basis: 
Operating loss on a GAAP basis $  (43,379) $  (28,373) $  (86,364) $  (61,444)
Stock-based compensation    10,192     4,644     12,268     12,171 
Amortization of certain intangible assets    20     20     40     40 
Reversal of contingent tax-related accrual    -     -     (3,513)    (1,293)
Operating loss on a non-GAAP basis $  (33,167) $  (23,709) $  (77,569) $  (50,526)
        
Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis: 
Operating margin on a GAAP basis  (127)%  (68)%  (130)%  (75)%
Stock-based compensation    30     11     18     16 
Amortization of certain intangible assets    -      -      -      -  
Reversal of contingent tax-related accrual    -      -      (5)    (2)
Operating margin on a non-GAAP basis  (97)%  (57)%  (117)%  (61)%
        
Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis: 
Net loss on a GAAP basis $  (46,384) $  (31,160) $  (91,891) $  (66,696)
Stock-based compensation    10,166     4,691     12,259     12,266 
Amortization of certain intangible assets    20     20     40     40 
Reversal of contingent tax-related accrual    -     -     (3,513)    (1,293)
Net loss on a non-GAAP basis $  (36,198) $  (26,449) $  (83,105) $  (55,683)
        
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 $  (4.41) $  (1.14) $  (14.94) $  (2.45)
Stock-based compensation    0.97     0.18     1.99     0.45 
Amortization of certain intangible assets    -     -     0.01     - 
Reversal of contingent tax-related accrual    -     -     (0.57)    (0.05)
Net loss per share on a non-GAAP basis $  (3.44) $  (0.96) $  (13.51) $  (2.05)
        
Billings: 
Total revenue $  34,267  $  41,660  $  66,212  $  82,458 
Add: 
Deferred revenue (end of period)    70,693     87,616     70,693     87,616 
Deferred revenue, noncurrent (end of period)    3,429     3,687     3,429     3,687 
Less: 
Deferred revenue (beginning of period)    (68,718)    (89,219)    (66,712)    (88,959)
Deferred revenue, noncurrent (beginning of period)    (4,007)    (4,950)    (4,244)    (4,943)
Increase in deferred revenue (current and noncurrent)    1,397     (2,866)    3,166     (2,599)
Billings $  35,664  $  38,794  $  69,378  $  79,859 
        
Reconciliation of Net Cash Used in Operating Activities to Adjusted Net Cash Used in Operating Activities: 
Net cash used in operating activities $  (36,096) $  (18,744) $  (72,983) $  (45,422)
Proceeds from shares issued in connection with employee stock purchase plan    -     -     -     4,518 
Adjusted net cash used in operating activities $  (36,096) $  (18,744) $  (72,983) $  (40,904)