Summary
Domo reported FY2024 Q1 revenue of $79.46 million, up 6.7% from $74.46 million in FY2023 Q1. Gross profit rose 7.2% to $60.89 million. Gross margin was 76.6%, up 0.3 percentage points from 76.3%. The operating loss narrowed to $19.71 million from $28.64 million, and the net loss narrowed to $24.40 million from $32.89 million. Diluted loss per share improved to $0.69 from $0.99. Operating margin was -24.8%, up 13.7 percentage points from -38.5%. Subscription revenue represented 89% of total revenue. Billings were $70.3 million, a decrease of 4% year over year. Revenue growth and falling billings point in different directions, which is a watch item for the next several quarters.
Cost discipline did much of the work. Sales and marketing expense was 54% of total revenue, down from 61% a year earlier, and research and development expense was 29% of revenue, down from 31%. The MD&A credits the sales and marketing decline largely to a $2.1 million decrease in marketing expense, of which $1.5 million was marketing events. It attributes the drop in general and administrative expense to a $2.1 million decrease in employee-related costs. Non-GAAP net loss was $6.1 million, and non-GAAP net loss per share was $0.17. Non-GAAP subscription gross margin was 86%, an improvement of 1 percentage point from Q1 FY23, and non-GAAP operating margin increased by 3 percentage points year over year. Management said subscription gross margin should remain relatively flat in future periods.
Retention is the bigger question. Gross retention rate was 88% for the 12 months ended April 30, 2023, down from 93% for the 12 months ended April 30, 2022. Enterprise customers accounted for 47% of revenue in the quarter, compared with 49% in the prior-year quarter. Domo had over 2,500 customers as of April 30, 2023, and 65% of customers were under multi-year contracts on a dollar-weighted basis, unchanged from January 31, 2023. No single customer accounted for more than 10% of total revenue, and 79% of revenue came from customers with billing addresses in the United States in both periods.
Operating cash flow was $0.83 million, up 6.0% from $0.78 million, while capital expenditures were $3.58 million, up 84.6% from $1.94 million. Adjusted free cash flow was negative $0.7 million. Deferred revenue was $176.72 million, up 4.4% from $169.22 million. For Q2 FY2024, management guided revenue of $78.5 million to $79.5 million and non-GAAP net loss per share of $0.07 to $0.11, based on 35.9 million weighted-average shares outstanding. For the full fiscal year 2024, guidance is revenue of $323.0 million to $330.0 million and non-GAAP net loss per share of $0.27 to $0.39, based on 36.1 million weighted-average shares outstanding.
Management expects the revenue growth rate to decline in the near term. The company cites the macroeconomic environment, an elongated software sales cycle and increased deal scrutiny, plus inflation that could raise operating costs and lead customers to delay technology spending or seek concessions. Domo expects to incur losses for the foreseeable future. It says existing cash and cash equivalents will be sufficient for at least the next 12 months, and cash, cash equivalents and restricted cash were $66.0 million as of April 30, 2023. Sales and marketing and research and development expense should increase in the near term, and the company may raise additional equity, equity-linked or debt financing. The $100 million credit facility was fully drawn, and Domo was in compliance with its covenants at January 31, 2023 and April 30, 2023. The transition to consumption-based pricing adds execution risk on top of the competitive and retention pressures.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $79.5M | $79.6M | -0.2% | $74.5M | +6.7% |
| Gross profit | $60.9M | $61.4M | -0.9% | $56.8M | +7.2% |
| Gross margin | 76.6% | 77.2% | -0.5 pp | 76.3% | +0.3 pp |
| Research & development | $23.4M | $22.0M | +6.6% | $23.2M | +1.1% |
| Sales & marketing | $43.2M | $42.0M | +2.8% | $45.6M | -5.3% |
| General & administrative | $14.0M | $13.5M | +3.5% | $16.7M | -16.0% |
| Total operating expenses | $80.6M | $77.5M | +4.0% | $85.4M | -5.7% |
| Operating income (loss) | -$19.7M | -$16.1M | -22.5% | -$28.6M | +31.2% |
| Operating margin | -24.8% | -20.2% | -4.6 pp | -38.5% | +13.7 pp |
| Net income (loss) | -$24.4M | -$19.8M | -23.2% | -$32.9M | +25.8% |
| Net margin | -30.7% | -24.9% | -5.8 pp | -44.2% | +13.5 pp |
| Diluted EPS | -$0.69 | -$0.58 | -$0.11 | -$0.99 | +$0.30 |
Risks
MD&A states that Domo expects its revenue growth rate to decline in the near term due in part to macroeconomic conditions that have elongated the software sales cycle and increased deal scrutiny, even though total revenue rose 6.7% year over year to $79.46 million for FY2024 Q1.
A majority of annual recurring revenue is up for renewal during the fiscal year ending January 31, 2024, and gross retention rate declined to 88% for the 12 months ended April 30, 2023 from 93% for the 12 months ended April 30, 2022.
As of April 30, 2023, Domo had $66.0 million of cash, cash equivalents, and restricted cash, of which $3.7 million was restricted, and its $100 million credit facility was fully drawn with no amounts available to draw, while the facility carries restrictive covenants and interest expense increased.
Domo disclosed recent CEO, CFO, COO, and board turnover, including John Mellor's resignation and Joshua G. James's re-appointment as CEO in March 2023, Bruce Felt's resignation and David Jolley's appointment as CFO, and Catherine Wong's resignation as COO; the risk factor says management and board turnover causes loss of institutional knowledge and can negatively affect strategy and execution.
The risk factors state that prior to Silicon Valley Bank's closure Domo had approximately $12.4 million in deposit accounts with SVB and an additional $18.3 million subject to SVB sweep arrangements; although access was regained, uncertainty remains and future bank failures could limit access to cash or financing.
The risk factors state that artificial intelligence algorithms may be flawed, datasets may be insufficient or biased, and inappropriate data practices could impair adoption of Domo's AI-driven data science features, subjecting it to competitive harm, legal liability, and reputational harm.
MD&A says Domo recently began offering consumption-based pricing and expects more consumption-based agreements, but it has limited experience with these agreements and changes in pricing and subscription models subject it to uncertainties.
The risk factors highlight intense competition from large software companies such as Microsoft, Oracle, SAP, IBM, and Salesforce, which may bundle data management and analytics products into larger deals at significant discounts, potentially causing price cuts, longer sales cycles, and loss of market share.
Professional services and other gross margin declined to 5% for FY2024 Q1 from 29% for FY2023 Q1, which MD&A attributes to a higher amount of prior-year custom app revenue and a higher volume of partner-delivered hours at a higher average cost per hour.
SaaS KPIs
All quarters →Total Customers
Billings
Remaining Performance Obligations (RPO)
Non-GAAP Subscription Gross Margin
Adjusted Free Cash Flow
Current Remaining Performance Obligations (cRPO)
Customer count growth (YoY)
Summary, forecast, risks and KPIs are extracted from Huckleberry.ai, Inc.'s SEC filings for Q1 FY2024 (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 1, 2026.