Summary
Domo's fiscal 2023 first quarter showed steady top-line momentum alongside a much larger bottom-line loss. Total revenue for the quarter ended April 30, 2022 was $74.5 million, up 24.0% from $60.1 million in the prior-year quarter. Subscription revenue reached $64.6 million, up 24% year over year, and represented 87% of total revenue. Billings grew 25% year over year to $72.9 million. Gross profit rose to $56.8 million from $44.9 million, an increase of 26.5%, and gross margin improved to 76.3% from 74.8%.
Profitability moved the other way. Operating loss for the quarter was $28.6 million, wider than the $15.0 million loss a year earlier, and the operating margin fell to -38.5% from -24.9%. Net loss was $32.9 million against $18.1 million, and diluted loss per share widened to $0.99 from $0.58.
The expense base drove that swing. Total operating expenses climbed to $85.4 million from $59.9 million, with sales and marketing at $45.6 million, research and development at $23.2 million, and general and administrative at $16.7 million. Total stock-based compensation was $25.3 million, up from $10.1 million, and included $3.6 million tied to the settlement of certain fiscal 2022 bonuses and $2.6 million from the modification of certain awards. The MD&A attributes the increases mainly to higher headcount and stock-based compensation, and notes that fiscal 2022 bonuses were paid in the form of vested restricted stock units during the quarter.
The GAAP and non-GAAP pictures diverge sharply. Non-GAAP net loss was $7.6 million, or $0.23 per share, against a GAAP net loss of $32.9 million and a GAAP loss per share of $0.99. Non-GAAP operating margin improved by 4 percentage points year over year, while GAAP operating margin declined by 14 percentage points.
Cash generation improved. Net cash provided by operating activities was $0.8 million for the quarter, compared with $2.7 million used in operating activities a year earlier. The MD&A notes that cash collected from customers of $90.4 million exceeded cash outflows of $89.6 million, with $61.2 million of that spending on personnel costs. Capital expenditures were $1.9 million, up from $1.8 million. Adjusted free cash flow, a non-GAAP measure, was $407,000 versus negative $373,000 a year ago. Cash and cash equivalents were $84.0 million as of April 30, 2022, and the $100 million credit facility was fully drawn. Deferred revenue was $169.2 million, up 29.7% from the prior-year quarter. RPO was $351.5 million as of April 30, 2022, up 24% year over year, with $225.0 million of that expected to be recognized as revenue in the next twelve months.
Retention metrics strengthened. Gross retention rate was 93% for the 12 months ended April 30, 2022, up from 89% for the 12 months ended April 30, 2021. Domo had over 2,400 customers as of April 30, 2022, and its customer count grew 15% from April 30, 2021. Multi-year contracts covered 64% of customers on a dollar-weighted basis, up from 62% at January 31, 2022. Mix shifted toward smaller accounts: enterprise customers accounted for 49% of revenue in the quarter, down from 55% a year earlier. Subscription revenue growth broke down as $7.7 million from new customers and $4.8 million from existing customers.
Guidance for the second fiscal quarter of 2023 addresses revenue and a non-GAAP net loss per share between $0.31 and $0.35, based on 33.9 million weighted-average shares outstanding. The full fiscal year 2023 outlook addresses revenue and a non-GAAP net loss per share between $1.26 and $1.34, based on 34.1 million weighted-average shares outstanding. Management did not reconcile the non-GAAP guidance to the most directly comparable GAAP measures because the items involved are not within its control or cannot be reasonably predicted.
Risks stay in view. Domo has posted significant net losses since inception, reported an accumulated deficit of $1,257.4 million at April 30, 2022, and expects losses for the foreseeable future. It warned that its revenue growth rate may decline because of business maturation, competition, slowing demand, lower renewal rates or fewer upsells. New sales hires during fiscal 2023 may weigh on near-term productivity. Foreign currency volatility could make other expense more pronounced. The pandemic continues to cloud enterprise software spending, and some customers have sought concessions such as longer payment terms or shorter contracts. The credit facility carries a covenant tied to the ratio of outstanding debt to annualized recurring revenue, and the company was in compliance at April 30, 2022.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2023 | Q4 FY2022 | QoQ | Q1 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $74.5M | $70.0M | +6.4% | $60.1M | +24.0% |
| Gross profit | $56.8M | $51.5M | +10.4% | $44.9M | +26.5% |
| Gross margin | 76.3% | 73.5% | +2.8 pp | 74.8% | +1.5 pp |
| Research & development | $23.2M | $23.5M | -1.4% | $16.2M | +43.3% |
| Sales & marketing | $45.6M | $39.4M | +15.7% | $33.5M | +36.3% |
| General & administrative | $16.7M | $18.5M | -10.0% | $10.2M | +63.0% |
| Total operating expenses | $85.4M | $81.4M | +5.0% | $59.9M | +42.7% |
| Operating income (loss) | -$28.6M | -$29.9M | +4.4% | -$15.0M | -91.5% |
| Operating margin | -38.5% | -42.8% | +4.3 pp | -24.9% | -13.6 pp |
| Net income (loss) | -$32.9M | -$33.3M | +1.1% | -$18.1M | -81.7% |
| Net margin | -44.2% | -47.5% | +3.3 pp | -30.1% | -14.0 pp |
| Diluted EPS | -$0.99 | -$1.04 | +$0.05 | — | — |
Risks
The company announced the resignation of founder Joshua G. James as chairman and executive officer in March 2022 and appointed John Mellor as chief executive officer. The filing states that leadership transitions can cause loss of institutional knowledge and uncertainty in strategy and execution, and that competition for top management is high.
The company is currently subject to a securities class-action complaint against it and certain current and former directors and officers, and a shareholder derivative complaint against certain directors and the former CEO. The filing states both are typically expensive to defend and could divert management attention and resources.
Founder and former CEO Joshua G. James beneficially controls approximately 81% of the voting power as of April 30, 2022 through Class A shares, and he and Cocolalla, LLC have pledged all of such shares to secure a loan with a financial institution. The filing states a default could result in the lender selling pledged shares into the market without volume limitations, likely adversely affecting the stock price.
The filing cites current or future economic uncertainties or downturns, including the Russian invasion of Ukraine, inflation, and the ongoing COVID-19 pandemic, which could reduce corporate spending on business intelligence software, delay or lengthen sales cycles, and lead customers to renegotiate or not renew contracts.
Sales to enterprise customers face long cycles of approximately six months to multiple years, with quarterly sales heavily weighted toward the final weeks and days of the quarter. The company notes this compresses sales activity and greatly increases the likelihood that sizeable transactions extend beyond the quarter in which they were forecast to close.
The platform competes with large software companies such as Microsoft, Oracle, SAP, and IBM, as well as analytics vendors like Tableau and Qlik, some of which may bundle products at significant discounts or for free. The filing also notes risks that artificial intelligence algorithms in Domo's Mr. Roboto may be flawed or trained on insufficient data.
The company had an accumulated deficit of $1,257.4 million at April 30, 2022 and its $100 million credit facility was fully drawn as of that date, with cash and cash equivalents of $84.0 million. The filing states it may need to raise additional funds and that additional financing may not be available on favorable terms.
A majority of the company's annual recurring revenue is up for renewal during the fiscal year ending January 31, 2023, and customers have no obligation to renew their subscriptions after their initial terms expire. Renewal rates may decline or fluctuate due to factors such as leadership changes at customers, pricing changes, and deteriorating economic conditions.
Sales and marketing expense rose to 61% of total revenue in the quarter ended April 30, 2022 from 56% in the prior-year quarter, and the company plans to continue hiring sales representatives, which it notes may have an adverse impact on productivity in the near term.
SaaS KPIs
All quarters →Total Customers
Billings
Remaining Performance Obligations (RPO)
Adjusted Free Cash Flow
Current Remaining Performance Obligations (cRPO)
Customer count growth (YoY)
Customers under multi-year contracts (dollar-weighted)
Subscription gross margin on a non-GAAP basis
Summary, forecast, risks and KPIs are extracted from Huckleberry.ai, Inc.'s SEC filings for Q1 FY2023 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.