Summary
Domo's fiscal 2022 third quarter, ended October 31, 2021, showed solid top-line growth but a wider loss. Total revenue was $65.1 million, up 21.3% from the prior-year quarter. Gross profit was $47.9 million, up 22.4%, and gross margin was 73.7%, up 0.6 percentage points. Billings were $70.2 million, up 26% year over year. Remaining performance obligations were $296.9 million as of October 31, 2021, up 19%, and the portion expected to be recognized in the next twelve months was $190.6 million, up 24%. Deferred revenue was $132.7 million, up 24.9% from the prior-year quarter. The company had over 2,200 customers, and 61% of customers were under multi-year contracts on a dollar-weighted basis as of October 31, 2021.
Profitability remains the main pressure point. Operating loss was $25.0 million, and the loss widened year over year. Operating margin was negative 38.4%, down 3.2 percentage points. Net loss was $28.5 million, and the loss widened year over year. Diluted EPS was negative $0.88. On a non-GAAP basis, net loss was $10.3 million and non-GAAP net loss per share was $0.32. Non-GAAP subscription gross margin was 83%, an improvement of 2 percentage points from Q3 FY21. Non-GAAP operating margin improved by 6 percentage points year over year. The gap between GAAP and non-GAAP results is mostly stock-based compensation, which also weighed on operating expenses.
Cash generation improved. Operating cash flow was $0.03 million in the quarter, up year over year. For the nine months, operating cash flow was negative $0.53 million, up year over year. Capital expenditures were $1.55 million in the quarter, up 40.0%, and $4.96 million for the nine months, up 16.6%. Free cash flow was negative $1.5 million in the quarter and negative $1.4 million for the nine months. The company was in compliance with the covenant terms of its credit facility at October 31, 2021.
Guidance points to continued growth. For the fourth fiscal quarter, Domo expects revenue of $66.5 million to $67.5 million and non-GAAP net loss per share of $0.37 to $0.41 based on 32.8 million weighted-average shares. For the full fiscal year 2022, the company expects revenue of $254.5 million to $255.5 million and non-GAAP net loss per share of $1.26 to $1.30 based on 32.0 million weighted-average shares. The outlook does not reconcile non-GAAP metrics to GAAP because some items are not within the company's control or cannot be reasonably predicted.
Risks remain significant. Domo has incurred net losses since inception, and management expects losses for the foreseeable future. The COVID-19 pandemic continues to create uncertainty, and a significant portion of sales and professional services are being conducted remotely. Customers in travel and hospitality, sports and leisure, and retail have been severely impacted. Some customers have sought concessions such as lengthened payment terms or reduced contract length. Gross retention rate was 90% for the twelve months ended October 31, 2021. Revenue growth may decline due to maturation, competition, slowing demand, or lower renewal and upsell rates. The credit facility includes covenants based on the ratio of outstanding indebtedness to annualized recurring revenue, and the company was in compliance at October 31, 2021. Hiring more sales representatives may hurt productivity in the near term.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $65.1M | $62.8M | +3.6% | $53.6M | +21.3% |
| Gross profit | $47.9M | $46.5M | +3.1% | $39.2M | +22.4% |
| Gross margin | 73.7% | 74.0% | -0.4 pp | 73.0% | +0.6 pp |
| Research & development | $22.0M | $19.3M | +13.7% | $16.5M | +33.2% |
| Sales & marketing | $37.5M | $33.4M | +12.4% | $29.6M | +26.7% |
| General & administrative | $13.4M | $12.4M | +8.4% | $11.9M | +12.6% |
| Total operating expenses | $72.9M | $65.1M | +12.0% | $58.0M | +25.6% |
| Operating income (loss) | -$25.0M | -$18.6M | -34.3% | -$18.9M | -32.3% |
| Operating margin | -38.4% | -29.6% | -8.8 pp | -35.2% | -3.2 pp |
| Net income (loss) | -$28.5M | -$22.2M | -28.2% | -$22.2M | -28.3% |
| Net margin | -43.8% | -35.4% | -8.4 pp | -41.4% | -2.4 pp |
Risks
The ongoing COVID-19 pandemic continues to disrupt Domo's business, with substantially all sales and professional services conducted remotely and customers in travel and hospitality, sports and leisure, and retail severely impacted. Management states that certain customers have pursued concessions such as lengthened payment terms or reduced contract length, which may materially and negatively impact operating results.
Domo's net loss widened to $28.5 million for FY2022 Q3 from $22.2 million in FY2021 Q3, and operating loss widened to $25.0 million from $18.9 million. For FY2022 year to date, net loss widened to $68.9 million from $65.0 million, and management expects to continue incurring losses for the foreseeable future.
Domo's credit facility has $100 million drawn and no amounts available to draw as of October 31, 2021, and management states it may need to raise additional funds for growth opportunities, product development, and sales and marketing. Any additional equity financing would be dilutive to existing stockholders.
A majority of Domo's annual recurring revenue is up for renewal during the fiscal year ending January 31, 2022, and its gross retention rate for the twelve months ended October 31, 2021 was 90%. Renewal rates may decline or fluctuate due to leadership changes, limited customer resources, pricing changes, or deteriorating economic conditions.
Domo faces intense competition from large software companies such as Microsoft, Oracle, SAP, and IBM, analytics vendors including Tableau and Qlik, and cloud analytics providers such as Salesforce and Infor. Competitors may bundle analytics products into larger deals at significant discounts or no charge, pressuring pricing, gross margins, and market share.
Domo currently has securities class-action complaints pending against it and certain current and former directors and officers, alleging violations of federal securities laws and seeking unspecified damages. Management believes the lawsuits are without merit and intends to defend them vigorously, but litigation can require significant management attention and legal expense.
Domo targets enterprise customers with over $1 billion in revenue and faces sales cycles that vary from approximately six months to multiple years, with quarterly sales weighted toward the last few weeks and days of the quarter. This concentration can cause large transactions to slip beyond the forecasted quarter, harming billings and new customer acquisition and renewal metrics.
Domo's Mr. Roboto uses machine learning algorithms, predictive analytics, and other artificial intelligence technologies to identify trends and initiate business processes. The filing warns that flawed algorithms, insufficient or biased datasets, or controversial data practices could undermine outputs and subject Domo to competitive harm, legal liability, and reputational damage.
Domo's dual-class structure gives founder and CEO Joshua G. James approximately 82% of voting power through Cocolalla, LLC, limiting other stockholders' ability to influence matters such as a change in control. Mr. James has pledged all Class A shares to secure a loan, and a default could result in lender sales of those shares and adversely affect the Class B common stock price.
Domo ceased to be an emerging growth company on January 31, 2021 and is no longer eligible for reduced disclosure and exemptions. Its independent registered public accounting firm is now required to attest to internal control over financial reporting under Section 404, increasing legal, accounting, and compliance costs.
Domo's platform depends on customers' ability to access data maintained on third-party software and service platforms, and Domo generally does not have agreements guaranteeing access. If third parties restrict or limit data connectors or data delivery, customers' access to data may be limited and Domo's business may be harmed.
Domo relies on third-party data centers and cloud infrastructure, and interruptions or capacity shortfalls could cause service outages, data loss, customer refunds or credits, and non-renewals. The company may not rapidly switch data centers or transfer customer data without significant costs and possible service interruption.
Domo's credit facility contains restrictive covenants limiting asset dispositions, mergers, acquisitions, indebtedness, liens, dividends, and new offices, and requires compliance with a financial covenant based on the ratio of outstanding indebtedness to annualized recurring revenue. The facility is secured by substantially all assets, including intellectual property, and non-compliance could accelerate repayment.
Domo's growth depends on recruiting, training, and retaining direct sales personnel and sales leadership, and new hires require significant time to reach full productivity. During fiscal 2022, the company has hired and plans to continue hiring more sales representatives, which management expects may adversely affect productivity in the near term.
SaaS KPIs
All quarters →Total Customers
Billings
Remaining Performance Obligations (RPO)
Non-GAAP Subscription Gross Margin
Current Remaining Performance Obligations (cRPO)
Customer count growth (YoY)
Free Cash Flow
Summary, forecast, risks and KPIs are extracted from Huckleberry.ai, Inc.'s SEC filings for Q3 FY2022 (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.