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CST: 15/09/2019 13:03:20   

Domo Announces Fiscal 2020 Second Quarter Financial Results

9 Days ago

SILICON SLOPES, Utah, Sept. 05, 2019 (GLOBE NEWSWIRE) -- Domo, Inc. (Nasdaq: DOMO) today announced results for the fiscal 2020 second quarter ended July 31, 2019.

Fiscal Second Quarter Results

  • Total revenue was $41.7 million, an increase of 22% year over year
  • Subscription revenue was $34.9 million, an increase of 24% year over year
  • Subscription revenue represented 84% of total revenue
  • Billings were $38.8 million or 9% year-over-year growth
  • Net cash used in operating activities was $18.7 million, an improvement of 48% year over year
  • Subscription gross margin was 75%, an improvement of 4 percentage points from Q2 FY19
  • GAAP operating margin improved by 59 percentage points year over year
  • Non-GAAP operating margin improved by 40 percentage points year over year
  • GAAP operating expenses decreased 14% year over year
  • Non-GAAP operating expenses decreased 7% year over year
  • GAAP net loss was $31.2 million, and GAAP net loss per share was $1.14, based on 27.4 million weighted-average shares outstanding
  • Non-GAAP net loss was $26.4 million, and non-GAAP net loss per share was $0.96, based on 27.4 million weighted-average shares outstanding
  • Cash, cash equivalents and short-term investments were $133.9 million as of July 31, 2019

Comments

"Our focus on empowering every business decision maker, from the frontline employee to the CEO, with actionable data is having a transformational impact on some of the world's largest companies," said Josh James, Domo founder and CEO. "While we continue to aggressively pursue our growth objectives, in Q2 we executed well on cost controls and improved our cash burn, and we remain committed to achieving cash flow positive status with the cash on our balance sheet.  As we look ahead, we are very optimistic about the opportunity in front of us."

Recent Highlights

We believe the following points and accolades are additional indicators of what’s to come in our business through our commitment to product innovation and customer success:

Business Outlook

Based on information available as of September 5, 2019, Domo is providing the following guidance for Q3 and full year fiscal 2020:

Q3 Fiscal 2020

  • Revenue is expected to be in the range of $41.5 million to $42.5 million
  • Non-GAAP net loss per share is expected to be between $1.00 and $1.04 based on 27.7 million weighted-average shares outstanding

Full Year Fiscal 2020

  • Revenue is expected to be in the range of $168.0 million to $169.0 million
  • Non-GAAP net loss per share is expected to be between $4.00 and $4.10 based on 27.5 million weighted-average shares outstanding

We have not reconciled guidance for non-GAAP metrics to their most directly comparable GAAP measures because such items that impact these measures are not within our control or cannot be reasonably predicted.

Earnings Call Details

Domo plans to host a conference call today to review its fiscal 2020 second quarter financial results and to discuss its financial outlook. The call is scheduled to begin at 3:00 p.m. MT/ 5:00 p.m. ET. A live webcast of the event will be available on the Domo Investor Relations website at https://www.domo.com/ir. A live dial-in is available domestically at (877) 491-5762 and internationally at (763) 416-6939, with conference ID#6087229. A replay will be available via webcast or at (855) 859-2056 or (404) 537-3406 until midnight (ET) September 19, 2019.

About Domo

Domo’s mission is to be the operating system for business, digitally connecting all your people, your data and your systems, empowering them to collaborate better, make better decisions and be more efficient, right from their phones. Domo works with many of the world’s leading and most progressive brands across multiple industries including retail, media and entertainment, manufacturing, finance and more. For more information about Domo (Nasdaq: DOMO), visit www.domo.com. You can also follow Domo on TwitterFacebook and LinkedIn.

Domo Disclosure Channels to Disseminate Information

Domo investors and others should note that we announce material information to the public about our company, products and services, and other issues through a variety of means, including Domo's website, press releases, SEC filings, blogs and social media, in order to achieve broad, non-exclusionary distribution of information to the public. We intend to use the Domo Facebook page, the Domo LinkedIn page, the Domo blog, the @Domotalk Twitter account and the @JoshJames Twitter account as a means of disclosing information about the Company and its services and for complying with the disclosure obligations under Regulation FD. The information we post through these social media channels may be deemed material. Accordingly, we encourage investors and others to monitor these social media channels in addition to following our press releases, SEC filings and public conference calls and webcasts.

Use of Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), we reference in this press release and the accompanying tables the following non-GAAP financial measures: billings, non-GAAP subscription gross margin, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share and adjusted net cash used in operating activities. In computing these measures, we exclude the effects of certain items including stock-based compensation expense, amortization of certain intangible assets, the reversal of contingent tax-related accruals and proceeds from shares issued in connection with employee stock purchase plan. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses that may not be indicative of our ongoing core business operating results. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and planning, forecasting, and analyzing future periods.

For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Reconciliation of Non-GAAP Financial Measures" included at the end of this release.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our future growth, demand for our products and services, our financial outlook for Q3 fiscal quarter and full fiscal year 2020, and results for future periods. Forward-looking statements are subject to risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our filings with the U.S. Securities and Exchange Commission, including, without limitation, the Annual Report on Form 10-K filed with the SEC on April 15, 2019 and the Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2019 expected to be filed with the SEC on or about September 11, 2019.  All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update this information unless required by law.

Domo is a registered trademark of Domo, Inc.

 
Domo, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 
  Three Months Ended   Six Months Ended
  July 31,   July 31,
      2018           2019           2018           2019    
Revenue:                
Subscription   $   28,166     $   34,873     $   54,829     $   69,264  
Professional services and other       6,101         6,787         11,383         13,194  
Total revenue       34,267         41,660         66,212         82,458  
Cost of revenue:  
Subscription (1)       8,265         8,816         16,321         16,851  
Professional services and other (1)       4,253         5,395         7,763         10,164  
Total cost of revenue       12,518         14,211         24,084         27,015  
Gross profit       21,749         27,449         42,128         55,443  
 
Operating expenses:  
Sales and marketing (1)       34,002         29,501         73,658         65,450  
Research and development (1)       20,919         17,046         39,983         34,145  
General and administrative (1), (2), (3)       10,207         9,275         14,851         17,292  
Total operating expenses       65,128         55,822         128,492         116,887  
Loss from operations       (43,379 )       (28,373 )       (86,364 )       (61,444 )
 
Other expense, net (1)       (2,898 )       (2,482 )       (4,817 )       (4,807 )
Loss before provision for income taxes       (46,277 )       (30,855 )       (91,181 )       (66,251 )
Provision for income taxes       107         305         710         445  
Net loss   $   (46,384 )   $   (31,160 )   $   (91,891 )   $   (66,696 )
               
Net loss per share (basic and diluted)   $   (4.41 )   $   (1.14 )   $   (14.94 )   $   (2.45 )
Weighted-average number of shares (basic and diluted)       10,509         27,418         6,151         27,196  
 
   
(1) Includes stock-based compensation expenses, as follows:  
Cost of revenue:  
Subscription   $   55     $   67     $   70     $   190  
Professional services and other       70         60         78         153  
Sales and marketing       3,744         2,041         4,049         6,049  
Research and development       2,993         1,294         3,476         3,359  
General and administrative       3,330         1,182         4,595         2,420  
Other (expense) income, net       (26 )       47         (9 )       95  
Total stock-based compensation expenses   $   10,166     $   4,691     $   12,259     $   12,266  
               
(2) Includes amortization of certain intangible assets, as follows:  
General and administrative   $   20     $   20     $   40     $   40  
 
(3) Includes reversal of contingent tax-related accrual, as follows:  
General and administrative   $   -     $   -     $   (3,513 )   $   (1,293 )
                                 

 

 
Domo, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
  January 31,   July 31,
    2019         2019    
Assets      
Current assets:  
Cash and cash equivalents $   176,973     $   97,939  
Short-term investments     -         35,927  
Accounts receivable, net     48,421         31,136  
Contract acquisition costs     10,425         11,349  
Prepaid expenses and other current assets     10,935         13,617  
Total current assets     246,754         189,968  
 
Property and equipment, net     12,595         12,677  
Contract acquisition costs, noncurrent     18,030         16,334  
Intangible assets, net     4,415         4,108  
Goodwill     9,478         9,478  
Other assets     1,360         1,964  
Total assets $   292,632     $   234,529  
       
Liabilities, convertible preferred stock and stockholders' equity (deficit)  
Current liabilities:  
Accounts payable $   2,609     $   2,023  
Accrued expenses and other current liabilities     48,139         40,856  
Current portion of deferred revenue     88,959         87,616  
Total current liabilities     139,707         130,495  
 
Deferred revenue, noncurrent     4,943         3,687  
Other liabilities, noncurrent     6,210         6,140  
Long-term debt     97,245         99,113  
Total liabilities     248,105         239,435  
 
Commitments and contingencies  
 
Stockholders' equity (deficit):  
Common stock     26         27  
Additional paid-in capital     956,145         973,473  
Accumulated other comprehensive income     438         372  
Accumulated deficit     (912,082 )       (978,778 )
Total stockholders' equity (deficit)     44,527         (4,906 )
Total liabilities and stockholders' equity (deficit) $   292,632     $   234,529  
 
 

 

 
Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
  Three Months Ended   Six Months Ended
  July 31,   July 31,
      2018           2019           2018           2019    
Cash flows from operating activities              
Net loss  $   (46,384 )   $   (31,160 )   $   (91,891 )   $   (66,696 )
Adjustments to reconcile net loss to net cash used in operating activities:  
Depreciation and amortization     2,277         1,852         4,562         3,616  
Amortization of contract acquisition costs     1,906         2,817         3,633         5,495  
Stock-based compensation     10,166         4,691         12,259         12,266  
Other, net     604         656         (2,576 )       (3 )
Changes in operating assets and liabilities:  
Accounts receivable, net     1,152         5,071         8,218         17,285  
Contract acquisition costs     (3,859 )       (2,924 )       (5,782 )       (4,986 )
Prepaid expenses and other assets     (2,995 )       1,105         (2,393 )       (3,388 )
Accounts payable     (5,716 )       (1,109 )       (1,288 )       (558 )
Accrued and other liabilities     5,356         3,123         (891 )       (5,854 )
Deferred revenue     1,397         (2,866 )       3,166         (2,599 )
  Net cash used in operating activities     (36,096 )       (18,744 )       (72,983 )       (45,422 )
 
Cash flows from investing activities  
Purchases of property and equipment     (1,588 )       (1,703 )       (3,205 )       (3,177 )
Purchases of securities available for sale     -         (15,936 )       -         (78,944 )
Proceeds from maturities and redemption of securities available for sale     -         43,500         -         43,500  
  Net cash (used in) provided by investing activities     (1,588 )       25,861         (3,205 )       (38,621 )
 
Cash flows from financing activities  
Proceeds from initial public offering, net of underwriting discounts and commissions     206,627         -         206,627         -  
Payments of costs related to initial public offering     (2,102 )       -         (3,413 )       -  
Proceeds from issuance of convertible preferred stock, net of issuance costs     -         -         (87 )       -  
Proceeds from shares issued in connection with employee stock purchase plan     -         -         -         4,518  
Shares repurchased for tax withholdings on vesting of restricted stock     -         (112 )       -         (1,012 )
Debt proceeds, net of issuance costs     (23 )       -         49,651         -  
Proceeds from exercise of stock options     60         93         272         1,431  
Principal payments on capital lease obligations     -         -         (44 )       -  
Net cash provided by (used in) financing activities     204,562         (19 )       253,006         4,937  
Effect of exchange rate changes on cash and cash equivalents     (12 )       78         12         72  
Net increase (decrease) in cash and cash equivalents     166,866         7,176         176,830         (79,034 )
Cash and cash equivalents at beginning of period     71,936         90,763         61,972         176,973  
Cash and cash equivalents at end of period $   238,802     $   97,939     $   238,802     $   97,939  
               

 

 
Domo, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)
 
  Three Months Ended   Six Months Ended
  July 31,   July 31,
      2018           2019           2018           2019    
Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:                
Revenue:  
Subscription   $   28,166     $   34,873     $   54,829     $   69,264  
Cost of revenue:  
Subscription       8,265         8,816         16,321         16,851  
Subscription gross profit on a GAAP basis       19,901         26,057         38,508         52,413  
Subscription gross margin on a GAAP basis     71 %     75 %     70 %     76 %
 
Stock-based compensation       55         67         70         190  
Subscription gross profit on a non-GAAP basis   $   19,956     $   26,124     $   38,578     $   52,603  
Subscription gross margin on a non-GAAP basis     71 %     75 %     70 %     76 %
 
Reconciliation of Total Operating Expenses on a GAAP Basis to Total Operating Expenses on a Non-GAAP Basis:  
Total operating expenses on a GAAP basis   $   65,128     $   55,822     $   128,492     $   116,887  
Stock-based compensation       (10,067 )       (4,517 )       (12,120 )       (11,828 )
Amortization of certain intangible assets       (20 )       (20 )       (40 )       (40 )
Reversal of contingent tax-related accrual       -         -         3,513         1,293  
Total operating expenses on a non-GAAP basis   $   55,041     $   51,285     $   119,845     $   106,312  
               
Reconciliation of Operating Loss on a GAAP Basis to Operating Loss on a Non-GAAP Basis:  
Operating loss on a GAAP basis   $   (43,379 )   $   (28,373 )   $   (86,364 )   $   (61,444 )
Stock-based compensation       10,192         4,644         12,268         12,171  
Amortization of certain intangible assets       20         20         40         40  
Reversal of contingent tax-related accrual       -         -         (3,513 )       (1,293 )
Operating loss on a non-GAAP basis   $   (33,167 )   $   (23,709 )   $   (77,569 )   $   (50,526 )
               
Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis:  
Operating margin on a GAAP basis     (127 )%     (68 )%     (130 )%     (75 )%
Stock-based compensation       30         11         18         16  
Amortization of certain intangible assets       -          -          -          -   
Reversal of contingent tax-related accrual       -          -          (5 )       (2 )
Operating margin on a non-GAAP basis     (97 )%     (57 )%     (117 )%     (61 )%
               
Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis:  
Net loss on a GAAP basis   $   (46,384 )   $   (31,160 )   $   (91,891 )   $   (66,696 )
Stock-based compensation       10,166         4,691         12,259         12,266  
Amortization of certain intangible assets       20         20         40         40  
Reversal of contingent tax-related accrual       -         -         (3,513 )       (1,293 )
Net loss on a non-GAAP basis   $   (36,198 )   $   (26,449 )   $   (83,105 )   $   (55,683 )
               
Reconciliation of Net Loss per Share on a GAAP Basis to Net Loss per Share on a Non-GAAP Basis:  
Net loss per share on a GAAP basis   $   (4.41 )   $   (1.14 )   $   (14.94 )   $   (2.45 )
Stock-based compensation       0.97         0.18         1.99         0.45  
Amortization of certain intangible assets       -         -         0.01         -  
Reversal of contingent tax-related accrual       -         -         (0.57 )       (0.05 )
Net loss per share on a non-GAAP basis   $   (3.44 )   $   (0.96 )   $   (13.51 )   $   (2.05 )
               
Billings:  
Total revenue   $   34,267     $   41,660     $   66,212     $   82,458  
Add:  
Deferred revenue (end of period)       70,693         87,616         70,693         87,616  
Deferred revenue, noncurrent (end of period)       3,429         3,687         3,429         3,687  
Less:  
Deferred revenue (beginning of period)       (68,718 )       (89,219 )       (66,712 )       (88,959 )
Deferred revenue, noncurrent (beginning of period)       (4,007 )       (4,950 )       (4,244 )       (4,943 )
Increase in deferred revenue (current and noncurrent)       1,397         (2,866 )       3,166         (2,599 )
Billings   $   35,664     $   38,794     $   69,378     $   79,859  
               
Reconciliation of Net Cash Used in Operating Activities to Adjusted Net Cash Used in Operating Activities:  
Net cash used in operating activities   $   (36,096 )   $   (18,744 )   $   (72,983 )   $   (45,422 )
Proceeds from shares issued in connection with employee stock purchase plan       -         -         -         4,518  
Adjusted net cash used in operating activities   $   (36,096 )   $   (18,744 )   $   (72,983 )   $   (40,904 )
               

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