Summary
Domo's fiscal 2025 second quarter ended July 31, 2024 with revenue of $78.4 million, down 1.6% year over year. Gross profit fell 3.8% to $58.3 million, and gross margin slid 1.7 percentage points to 74.3%. The operating loss widened 36.6% to $14.5 million, and operating margin sank 5.2 percentage points to negative 18.5%. Net loss widened 21.3% to $19.5 million, and diluted EPS fell 13.3% to negative $0.51.
Cash generation reversed in the quarter. Operating cash flow was negative $6.2 million, down 1,071.8% from the prior-year quarter. Capital expenditures were $2.2 million, down 24.6% from the prior-year quarter. Deferred revenue was $163.6 million, down 2.4% from the prior-year quarter. Adjusted free cash flow, a non-GAAP measure, was negative $5.6 million. Billings were $68.6 million, down 3% year over year, and remaining performance obligations were $358.9 million as of July 31, 2024.
The quarter showed mixed demand signals. Domo ended the period with over 2,600 customers. Enterprise customers accounted for 46% of revenue, down from 49% a year earlier. The trailing twelve month gross retention rate was 84% as of July 31, 2024, down from 88% a year earlier. Management said it saw a sequential improvement in gross retention during the quarter and that the consumption-based cohort has a gross retention rate greater than 90%. More than 45% of annual recurring revenue is on consumption-based agreements or enterprise-wide subscription agreements, and Domo expects that percentage to increase. The company expects enterprise revenue to decline in the near term because macroeconomic conditions elongate sales cycles, increase deal scrutiny, and make renewals harder. A large non-renewal in the quarter ended April 30, 2024 weighed on retention.
For the first six months of fiscal 2025, total revenue was $158.5 million, flat with the prior-year period. Gross profit fell 3.1% to $117.7 million, and gross margin slipped 2.1 percentage points to 74.2%. The operating loss widened 18.6% to $35.9 million, and the net loss widened 12.4% to $45.5 million. Diluted EPS fell 5.3% to negative $1.20. Operating cash flow for the six months was negative $4.3 million, down 391.9% from the prior-year period. Capital expenditures were $4.7 million, down 27.2% from the prior-year period.
Expense ratios moved in different directions. Sales and marketing expense was 47% of revenue, down from 52% a year earlier. Research and development was 28% of revenue, up from 26%. General and administrative was 17% of revenue, up from 11%, driven by higher stock-based compensation and professional and legal fees. The company reported a non-GAAP net loss of $2.7 million and non-GAAP net loss per share of negative $0.07. For the third quarter of fiscal 2025, management guided revenue to $77.0 million to $78.0 million and non-GAAP net loss per share to $0.14 to $0.18 based on 38.9 million weighted-average shares outstanding. For the full fiscal year 2025, it guided revenue to $313.0 million to $315.0 million and non-GAAP net loss per share to $0.69 to $0.77 based on 38.5 million weighted-average shares outstanding. The company did not reconcile the non-GAAP guidance to GAAP.
Balance sheet and liquidity risks remain. The $100 million credit facility was fully drawn as of July 31, 2024. In August 2024, Domo amended the facility to extend the term loan maturity to August 19, 2028 and to modify the minimum liquidity covenant to $25.0 million monthly. The amended terms carry a floating rate of three-month term SOFR plus 3.0% and a fixed 5.0% accrual on outstanding principal. Management said it expects to incur losses for the foreseeable future and may not achieve or sustain profitability. It also cited ongoing uncertainty in the SaaS sector and the possibility that customers will reduce or delay technology spending.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $78.4M | $80.1M | -2.1% | $79.7M | -1.6% |
| Gross profit | $58.3M | $59.4M | -1.9% | $60.6M | -3.8% |
| Gross margin | 74.3% | 74.1% | +0.2 pp | 76.0% | -1.7 pp |
| Research & development | $22.0M | $22.7M | -3.3% | $20.8M | +5.8% |
| Sales & marketing | $36.6M | $42.2M | -13.2% | $41.0M | -10.8% |
| General & administrative | $14.2M | $15.9M | -10.9% | $9.4M | +51.1% |
| Total operating expenses | $72.8M | $80.8M | -10.0% | $71.2M | +2.2% |
| Operating income (loss) | -$14.5M | -$21.4M | +32.5% | -$10.6M | -36.6% |
| Operating margin | -18.5% | -26.8% | +8.3 pp | -13.3% | -5.2 pp |
| Net income (loss) | -$19.5M | -$26.0M | +25.1% | -$16.1M | -21.3% |
| Net margin | -24.9% | -32.5% | +7.6 pp | -20.2% | -4.7 pp |
| Diluted EPS | -$0.51 | -$0.69 | +$0.18 | -$0.45 | -$0.06 |
| Customers | 31 | — | — | — | — |
Risks
Operating cash flow turned negative, with cash used in operating activities of $4.3 million for the six months ended July 31, 2024 versus cash provided of $1.5 million in the prior-year period. As of July 31, 2024 the company had $55.7 million of cash, cash equivalents and restricted cash, its $100 million credit facility was fully drawn, and no amounts were available to draw.
The shift to consumption-based pricing is material and uncertain: more than 45% of annual recurring revenue was on consumption-based agreements or ELAs as of the most recent quarter, and management states it has limited experience with these contracts and that revenue may be negatively impacted, including lower net retention if customers use less data than originally contemplated.
Macroeconomic conditions have elongated the software sales cycle, increased deal scrutiny and made renewals more challenging, with a greater impact on enterprise customers as evidenced by declining enterprise revenue that management expects to continue declining in the near term. Enterprise customers accounted for 46% of revenue for the three and six months ended July 31, 2024, down from 49% in the prior-year periods.
Trailing twelve month gross retention rate declined to 84% as of July 31, 2024 from 88% as of July 31, 2023, driven partly by challenging renewals from customers with COVID-19 use cases and one large non-renewal in the quarter ended April 30, 2024. A majority of annual recurring revenue is up for renewal during the fiscal year ending January 31, 2025.
The credit facility is secured by substantially all assets and contains restrictive covenants plus a minimum annualized recurring revenue covenant, a minimum trailing 12-month consolidated EBITDA covenant and a monthly minimum liquidity covenant (raised to $25.0 million under the August 2024 Second Amendment). Noncompliance could result in an event of default and acceleration of amounts due.
The platform uses machine learning, predictive analytics and other artificial intelligence technologies, and the filing flags that AI algorithms may be flawed, datasets may be insufficient or biased, and outputs may appear correct but be inaccurate. Evolving and inconsistent AI laws, such as the proposed E.U. Artificial Intelligence Act, could bring new regulatory scrutiny and require costly additional investment.
The company has experienced significant management and board turnover, including the CEO, CFO and COO transitions announced in 2022 and 2023 and recent changes in board composition. Management notes that turnover causes loss of institutional knowledge and that competition for top management is high, which could negatively affect strategy and execution.
The market is intensely competitive, with large software companies such as Microsoft, Oracle, SAP and IBM and analytics providers such as Tableau, Qlik and Looker, many with greater resources and name recognition. Competitors may bundle analytics products at significant discounts or no charge, pressuring pricing, gross margins and market share.
SaaS KPIs
All quarters →Total Customers
Summary, forecast, risks and KPIs are extracted from Huckleberry.ai, Inc.'s SEC filings for Q2 FY2025 (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.