Summary
Domo's fiscal 2024 third quarter landed close to flat on the top line. Total revenue was $79.7 million, up 0.8% from $79.0 million in the prior-year quarter. Gross profit rose to $60.9 million from $60.1 million, a 1.3% increase. Total gross margin was 76.4%, up 0.4 percentage points. Subscription revenue mix was 89% of total revenue. Those top-line figures came with a modest mix shift: professional services and other revenue declined while subscription revenue grew.
The loss profile improved more sharply. GAAP operating loss was $11.2 million, narrowed from $18.5 million in the prior-year quarter. Operating margin was negative 14.1%, up 9.3 percentage points. GAAP net loss was $16.4 million, narrowed from $23.7 million. Diluted EPS was negative $0.45, narrowed from negative $0.69. On a non-GAAP basis, operating income was $4.986 million, compared with $0.648 million in the prior-year quarter. Non-GAAP net loss was $24.0 thousand, and non-GAAP net loss per share was $0.00. Management tied the lower loss to cost controls and lower employee-related costs, while research and development and general and administrative spending fell as a percentage of revenue.
Cash generation remains negative but less so. Net cash used in operating activities was $4.3 million in the quarter, an improvement from $6.5 million in the prior-year quarter. For the nine months, net cash used in operating activities was $2.9 million, compared with $8.1 million in the prior-year period. Capital expenditures were $2.7 million in the quarter, up from $1.7 million, and $9.2 million for the nine months, up from $5.1 million. Adjusted free cash flow, a non-GAAP measure, was negative $5.665 million in the quarter, compared with negative $8.139 million in the prior-year quarter. Deferred revenue was $162.8 million, up 1.1% from $161.0 million. The company had drawn all $100 million of its credit facility, and the interest rate was about 11.1% as of October 31, 2023. The credit facility matures April 1, 2025 and includes financial covenants.
Customer metrics point to both durability and pressure. Domo had over 2,600 customers as of October 31, 2023, and customer count increased 3% from October 31, 2022 to October 31, 2023. Enterprise customers accounted for 46% of revenue in the quarter, down from 50% in the prior-year quarter. Multi-year contracts were 67% of customers on a dollar-weighted basis as of October 31, 2023, up from 65% as of January 31, 2023. The gross retention rate was 87% for the 12 months ended October 31, 2023, down from 91% for the 12 months ended October 31, 2022. Management expects revenue to be negatively impacted in the near term by macroeconomic conditions, elongated software sales cycles, increased deal scrutiny, and tougher renewal discussions. It also said the total revenue growth rate will decrease for the remainder of fiscal 2024. Risks include the transition to consumption-based pricing, credit facility covenants, and potential limits on access to cash if conditions affecting financial institutions worsen.
Product and customer recognition continued. Domo was a leader in Nucleus Research's 2023 Embedded Analytics Technology Value Matrix for the third consecutive year. Regional One Health received a Nucleus Research ROI Award for achieving a total ROI of 190% using Domo's platform. Domo was also ranked as an Overall Experience Leader in Dresner Advisory Services' 2023 Small and Midsize Enterprise Business Intelligence Market Study and named to the 2023 Constellation ShortList for Marketing Analytics Solutions, its ninth placement on that ShortList.
For the fourth fiscal quarter, Domo guided revenue to a range of $79.0 million to $80.0 million. It guided non-GAAP net loss per share of $0.05 to $0.09 based on 36.8 million weighted-average shares. For the full fiscal year 2024, revenue is expected to be $317.8 million to $318.8 million, representing year-over-year growth of 2% to 4%. Full-year non-GAAP net loss per share is expected to be $0.24 to $0.28 based on 36.1 million weighted-average shares. The company has not reconciled guidance for non-GAAP metrics to their most directly comparable GAAP measures because certain items are not within its control or cannot be reasonably predicted.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $79.7M | $79.7M | +0.0% | $79.0M | +0.8% |
| Gross profit | $60.9M | $60.6M | +0.5% | $60.1M | +1.3% |
| Gross margin | 76.4% | 76.0% | +0.4 pp | 76.1% | +0.4 pp |
| Research & development | $19.7M | $20.8M | -5.0% | $24.6M | -19.7% |
| Sales & marketing | $40.3M | $41.0M | -1.9% | $41.0M | -1.8% |
| General & administrative | $12.1M | $9.4M | +29.3% | $13.0M | -6.9% |
| Total operating expenses | $72.1M | $71.2M | +1.3% | $78.6M | -8.3% |
| Operating income (loss) | -$11.2M | -$10.6M | -5.8% | -$18.5M | +39.4% |
| Operating margin | -14.1% | -13.3% | -0.8 pp | -23.4% | +9.3 pp |
| Net income (loss) | -$16.4M | -$16.1M | -2.1% | -$23.7M | +30.8% |
| Net margin | -20.6% | -20.2% | -0.4 pp | -30.0% | +9.4 pp |
| Diluted EPS | -$0.45 | -$0.45 | ±$0.00 | -$0.69 | +$0.24 |
Risks
MD&A states that prevailing macroeconomic conditions have elongated the software sales cycle, increased deal scrutiny and made renewal discussions more challenging, and that near-term revenue is expected to be negatively impacted by the effects of the macroeconomic environment. Elevated inflation may raise operating costs that cannot be recouped through pricing. Total revenue was up 4.3% for the nine months ended October 31, 2023.
The company has limited experience with its new consumption-based pricing model and warns that customers may use less data than originally contemplated in their initial consumption-based contract, resulting in lower net retention in future years. A sales and marketing re-alignment tied to the consumption model is expected to drive the go-to-market shift.
Gross retention rate fell to 87% for the 12 months ended October 31, 2023 from 91% for the 12 months ended October 31, 2022. MD&A notes that a majority of annual recurring revenue is up for renewal during the fiscal year ending January 31, 2024, and that revenue from existing customers declined net of churn in the quarter.
As of October 31, 2023 the company had $57.4 million of cash, cash equivalents and restricted cash (including $3.7 million restricted), all $100 million of its credit facility had been drawn, and no amounts were available to draw. The facility is secured by substantially all assets, carries an interest rate of approximately 11.1% at October 31, 2023, and imposes financial covenants on annualized recurring revenue.
MD&A states the company expects total revenue growth rate to decrease for the remainder of fiscal 2024, and that notwithstanding the shift to consumption-based pricing, revenue is expected to be negatively impacted in the near term.
The filing cites recent management and board turnover, including the March 2023 re-appointment of Joshua G. James as CEO following John Mellor's resignation, the appointment of David Jolley as CFO to replace Bruce Felt, and the resignation of the COO, along with significant changes in board composition. The company notes this causes loss of institutional knowledge and can impede execution.
The company warns that its use of machine learning, predictive analytics and other artificial intelligence technologies could produce factually inaccurate or flawed outputs, subjecting it to competitive harm, legal liability and reputational damage, and that the evolving and potentially inconsistent regulatory landscape for AI (including a proposed E.U. Artificial Intelligence Act) may require costly additional investment.
The company describes an intensely competitive market, naming Microsoft, Oracle, SAP and IBM, and notes that competitors may bundle data management and analytics products into larger deals at significant discounts or no charge, leading to price cuts, longer sales cycles and loss of market share.
Enterprise sales cycles vary from approximately six months to multiple years and are weighted toward the last few weeks and days of the quarter, compressing sales activity and increasing the likelihood that sizeable transactions extend beyond the quarter in which they are forecast to close.
Founder and CEO Joshua G. James beneficially controlled approximately 80% of the voting power as of October 31, 2023, and has pledged all of his Class A shares to secure a loan such that a default could result in lender sales of pledged shares. The company also qualifies as a controlled company under Nasdaq rules and may rely on exemptions from certain corporate governance requirements.
SaaS KPIs
All quarters →Total Customers
Billings
Remaining Performance Obligations (RPO)
Non-GAAP Subscription Gross Margin
Non-GAAP Operating Margin
Customer count growth (YoY)
Customers under multi-year contracts (dollar-weighted)
Summary, forecast, risks and KPIs are extracted from Huckleberry.ai, Inc.'s SEC filings for Q3 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.