Business Wire | Dec 3, 2020 04:05PM EST

Domo Announces Third Quarter Fiscal 2021 Financial Results

Dec. 03, 2020

SILICON SLOPES, Utah--(BUSINESS WIRE)--Dec. 03, 2020--Domo, Inc. (Nasdaq: DOMO) today announced results for its fiscal third quarter ended October 31, 2020.

Fiscal Third Quarter Results

* Total revenue was $53.6 million, an increase of 20% year over year * Subscription revenue was $46.9 million, an increase of 24% year over year * Subscription revenue represented 87% of total revenue * Billings were $55.7 million or 25% year-over-year growth * Revenue allocated to remaining performance obligations (RPO) was $248.8 million as of October 31, 2020, an increase of 21% year over year * RPO expected to be recognized as revenue in the next twelve months was $153.9 million as of October 31, 2020, an increase of 22% year over year * Net cash used in operating activities was $1.7 million, while adjusted net cash provided by operating activities was $1.4 million * GAAP subscription gross margin was 80%, an improvement of 4 percentage points from Q3 FY20 * Non-GAAP subscription gross margin was 81%, an improvement of 4 percentage points from Q3 FY20 * GAAP operating margin improved by 24 percentage points year over year * Non-GAAP operating margin improved by 31 percentage points year over year * GAAP net loss was $22.2 million, and GAAP net loss per share was $0.75, based on 29.5 million weighted-average shares outstanding * Non-GAAP net loss was $11.9 million, and non-GAAP net loss per share was $0.40, based on 29.5 million weighted-average shares outstanding * Cash and cash equivalents were $83.8 million as of October 31, 2020

"In Q3, we achieved strong growth and delivered on the commitment we made at our IPO to grow revenue while getting to cash-flow positive with the cash we had on hand," said Josh James, founder and CEO. "This is a huge financial milestone for our company and a result of listening to our customers and building what they need, and having every employee put their hearts and souls into this mission. Our strong results and our improved financial position give us the confidence to invest in the significant growth opportunity in front of us. I want to extend a huge thank you to our customers, our employees and investors who have been part of this ongoing journey of building a world-class enterprise software business."

Recent Highlights

We believe the following points and accolades demonstrate our commitment to product innovation, go-to-market initiatives and customer success:

* Domo was named Winner with its customer Unilever in Ventana Research's Digital Leadership Awards for Analytics. This award was based on the use of Domo to support Unilever's United for America, a national philanthropic program that provided more than $25 million in goods and services to communities in need. * Domo was ranked an Overall Experience Leader and a Credibility Leader in Dresner Advisory Services' 2020 SME Business Intelligence Market Study. * Domo received industry recognitions in Gartner Research's Digital Markets brands Capterra Top 20 - Statistical Analysis (August 2020) and GetApp Category Leader - Statistical Analysis (August 2020). * Domo was been named a Best Company to Work For by Utah Business Magazine for the ninth consecutive year. * Domo achieved SAP-certified integration with SAP HANA(r). The SAP(r) Integration and Certification Center (SAP ICC) has certified that Domo integrates with SAP HANA using standard integration technologies.

Business Outlook

Based on information available as of December 3, 2020, Domo is providing the following guidance for its fourth fiscal quarter and full year fiscal 2021:

Q4 Fiscal 2021

* Revenue is expected to be in the range of $53.3 million to $54.3 million * Non-GAAP net loss per share is expected to be between $0.42 and $0.46 based on 30.1 million weighted-average shares outstanding

Full Year Fiscal 2021

* Revenue is expected to be in the range of $206.6 million to $207.6 million * Non-GAAP net loss per share is expected to be between $1.83 and $1.87 based on 29.3 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 2021 third 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. Participants can register for the call in advance by visiting http://www.directeventreg.com/registration/event/4296169. Instructions will be shared on how to join the call after registering.

A replay will be available at (800) 585-8367 or (416) 621-4642 with conference ID #4296169 following the completion of the conference call until 11:59 p.m. (ET) December 17, 2020.

About Domo

Domo is the Business Cloud, empowering organizations of all sizes with BI leverage at cloud scale in record time. With Domo, BI-critical processes that took weeks, months or more can now be done on-the-fly, in minutes or seconds, at unbelievable scale. For more information about how Domo (Nasdaq: DOMO) helps its customers go fast, go big and go bold, visit www.domo.com. You can also follow Domo on Twitter, Facebook 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 its fourth fiscal quarter and full fiscal year 2021, 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 10, 2020 and the Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2020 expected to be filed with the SEC on or about December 10, 2020, as well as risks to our business related to the COVID-19 outbreak. 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, Domo Business Cloud and Domo is the Business Cloud are registered trademarks of Domo, Inc.

Domo, Inc.Condensed Consolidated Statements of Operations(in thousands, except per share data)(unaudited) Three Months Ended Nine Months Ended

October 31, October 31,

2019 2020 2019 2020

Revenue:Subscription $ 37,841 $ 46,906 $ 107,105 $ 133,689

Professional services 6,925 6,739 20,119 19,648 and otherTotal revenue 44,766 53,645 127,224 153,337

Cost of revenue:Subscription (1) 9,045 9,372 25,896 27,288

Professional services 5,418 5,106 15,582 14,948 and other (1)Total cost of revenue 14,463 14,478 41,478 42,236

Gross profit 30,303 39,167 85,746 111,101

Operating expenses:Sales and marketing (1) 29,784 29,609 95,234 86,089

Research and development 17,578 16,504 51,723 49,874 (1)General and 9,590 11,929 26,882 31,355 administrative (1), (2),(3)Total operating expenses 56,952 58,042 173,839 167,318

Loss from operations (26,649 ) (18,875 ) (88,093 ) (56,217 )

Other expense, net (1) (2,368 ) (3,215 ) (7,175 ) (8,356 )

Loss before provision (29,017 ) (22,090 ) (95,268 ) (64,573 )for income taxesProvision for income 84 131 529 446 taxesNet loss $ (29,101 ) $ (22,221 ) $ (95,797 ) $ (65,019 )

Net loss per share $ (1.05 ) $ (0.75 ) $ (3.50 ) $ (2.24 )(basic and diluted)Weighted-average number 27,638 29,533 27,345 28,998 of shares (basic anddiluted) (1) Includes stock-basedcompensation expenses,as follows:Cost of revenue:Subscription $ 151 $ 377 $ 341 $ 750

Professional services 123 273 276 494 and otherSales and marketing 2,135 3,301 8,184 7,670

Research and development 1,493 2,716 4,852 6,595

General and 1,533 3,452 3,953 8,172 administrativeOther expense, net 47 172 142 267

Total stock-based $ 5,482 $ 10,291 $ 17,748 $ 23,948 compensation expenses (2) Includesamortization of certainintangible assets, asfollows:General and $ 20 $ 20 $ 60 $ 60 administrative (3) Includes reversal ofcontingent tax-relatedaccrual, as follows:General and $ - $ - $ (1,293 ) $ - administrativeDomo, Inc.Condensed Consolidated Balance Sheets(in thousands)(unaudited)January 31,

October 31,

2020

2020

AssetsCurrent assets:Cash and cash equivalents$

80,843

$

83,813

Short-term investments17,967

-

Accounts receivable, net47,967

37,788

Contract acquisition costs12,676

13,013

Prepaid expenses and other current assets12,809

9,112

Total current assets172,262

143,726

Property and equipment, net12,816

14,259

Right-of-use assets-

5,009

Contract acquisition costs, noncurrent17,083

16,201

Intangible assets, net3,865

3,515

Goodwill9,478

9,478

Other assets1,234

954

Total assets$

216,738

$

193,142

Liabilities and stockholders' deficitCurrent liabilities:Accounts payable$

2,298

$

4,756

Accrued expenses and other current liabilities46,473

45,911

Lease liabilities-

4,169

Current portion of deferred revenue105,290

103,075

Total current liabilities154,061

157,911

Lease liabilities, noncurrent-

2,693

Deferred revenue, noncurrent4,454

3,182

Other liabilities, noncurrent6,329

9,324

Long-term debt101,074

98,548

Total liabilities265,918

271,658

Commitments and contingenciesStockholders' deficit:Common stock28

30

Additional paid-in capital988,141

1,023,662

Accumulated other comprehensive income389

549

Accumulated deficit(1,037,738

)

(1,102,757

)

Total stockholders' deficit(49,180

)

(78,516

)

Total liabilities and stockholders' deficit$

216,738

$

193,142

Domo, Inc.Condensed Consolidated Balance Sheets(in thousands)(unaudited) January 31, October 31,

2020 2020

AssetsCurrent assets:Cash and cash equivalents $ 80,843 $ 83,813

Short-term investments 17,967 -

Accounts receivable, net 47,967 37,788

Contract acquisition costs 12,676 13,013

Prepaid expenses and other current assets 12,809 9,112

Total current assets 172,262 143,726

Property and equipment, net 12,816 14,259

Right-of-use assets - 5,009

Contract acquisition costs, noncurrent 17,083 16,201

Intangible assets, net 3,865 3,515

Goodwill 9,478 9,478

Other assets 1,234 954

Total assets $ 216,738 $ 193,142

Liabilities and stockholders' deficitCurrent liabilities:Accounts payable $ 2,298 $ 4,756

Accrued expenses and other current liabilities 46,473 45,911

Lease liabilities - 4,169

Current portion of deferred revenue 105,290 103,075

Total current liabilities 154,061 157,911

Lease liabilities, noncurrent - 2,693

Deferred revenue, noncurrent 4,454 3,182

Other liabilities, noncurrent 6,329 9,324

Long-term debt 101,074 98,548

Total liabilities 265,918 271,658

Commitments and contingencies Stockholders' deficit:Common stock 28 30

Additional paid-in capital 988,141 1,023,662

Accumulated other comprehensive income 389 549

Accumulated deficit (1,037,738 ) (1,102,757 )

Total stockholders' deficit (49,180 ) (78,516 )

Total liabilities and stockholders' deficit $ 216,738 $ 193,142

Domo, Inc.Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited)Three Months Ended

Nine Months Ended

October 31,

October 31,

2019

2020

2019

2020

Cash flows from operating activitiesNet loss$

(29,101

)

$

(22,221

)

$

(95,797

)

$

(65,019

)

Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization1,691

1,126

5,307

3,490

Non-cash lease expense-

1,044

-

2,997

Amortization of contract acquisition costs3,008

3,657

8,503

10,577

Stock-based compensation5,482

10,291

17,748

23,948

Other, net819

1,634

816

3,456

Changes in operating assets and liabilities:Accounts receivable, net(2,915

)

(2,855

)

14,370

10,179

Contract acquisition costs(4,031

)

(4,047

)

(9,017

)

(9,939

)

Prepaid expenses and other assets3,026

474

(362

)

4,039

Accounts payable862

2,991

304

2,397

Operating lease liabilities-

(996

)

-

(2,564

)

Accrued and other liabilities1,978

5,159

(3,876

)

506

Deferred revenue(338

)

2,027

(2,937

)

(3,487

)

Net cash used in operating activities(19,519

)

(1,716

)

(64,941

)

(19,420

)

Cash flows from investing activitiesPurchases of property and equipment(1,683

)

(1,105

)

(4,860

)

(4,259

)

Purchases of securities available for sale(14,387

)

-

(93,331

)

(11,149

)

Proceeds from maturities of securities available for sale28,000

4,900

71,500

29,200

Purchases of intangible assets-

(6

)

-

(111

)

Net cash provided by (used in) investing activities11,930

3,789

(26,691

)

13,681

Cash flows from financing activitiesProceeds from shares issued in connection with employee stock purchase plan3,294

3,099

7,812

6,748

Shares repurchased for tax withholdings on vesting of restricted stock(98

)

(194

)

(1,110

)

(717

)

Proceeds from exercise of stock options70

446

1,501

2,505

Net cash provided by financing activities3,266

3,351

8,203

8,536

Effect of exchange rate changes on cash and cash equivalents(105

)

(66

)

(33

)

173

Net (decrease) increase in cash and cash equivalents(4,428

)

5,358

(83,462

)

2,970

Cash and cash equivalents at beginning of period97,939

78,455

176,973

80,843

Cash and cash equivalents at end of period$

93,511

$

83,813

$

93,511

$

83,813

Domo, Inc.Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited) Three Months Ended Nine Months Ended

October 31, October 31,

2019 2020 2019 2020

Cash flows fromoperating activitiesNet loss $ (29,101 ) $ (22,221 ) $ (95,797 ) $ (65,019 )

Adjustments to reconcilenet loss to net cashused in operatingactivities:Depreciation and 1,691 1,126 5,307 3,490 amortizationNon-cash lease expense - 1,044 - 2,997

Amortization of contract 3,008 3,657 8,503 10,577 acquisition costsStock-based compensation 5,482 10,291 17,748 23,948

Other, net 819 1,634 816 3,456

Changes in operatingassets and liabilities:Accounts receivable, net (2,915 ) (2,855 ) 14,370 10,179

Contract acquisition (4,031 ) (4,047 ) (9,017 ) (9,939 )costsPrepaid expenses and 3,026 474 (362 ) 4,039 other assetsAccounts payable 862 2,991 304 2,397

Operating lease - (996 ) - (2,564 )liabilitiesAccrued and other 1,978 5,159 (3,876 ) 506 liabilitiesDeferred revenue (338 ) 2,027 (2,937 ) (3,487 )

Net cash used in (19,519 ) (1,716 ) (64,941 ) (19,420 )operating activities Cash flows frominvesting activitiesPurchases of property (1,683 ) (1,105 ) (4,860 ) (4,259 )and equipmentPurchases of securities (14,387 ) - (93,331 ) (11,149 )available for saleProceeds from maturities 28,000 4,900 71,500 29,200 of securities availablefor salePurchases of intangible - (6 ) - (111 )assetsNet cash provided by 11,930 3,789 (26,691 ) 13,681 (used in) investingactivities Cash flows fromfinancing activitiesProceeds from sharesissued in connection 3,294 3,099 7,812 6,748 with employee stockpurchase planShares repurchased fortax withholdings on (98 ) (194 ) (1,110 ) (717 )vesting of restrictedstockProceeds from exercise 70 446 1,501 2,505 of stock optionsNet cash provided by 3,266 3,351 8,203 8,536 financing activitiesEffect of exchange rate (105 ) (66 ) (33 ) 173 changes on cash and cashequivalentsNet (decrease) increase (4,428 ) 5,358 (83,462 ) 2,970 in cash and cashequivalentsCash and cash 97,939 78,455 176,973 80,843 equivalents at beginningof periodCash and cash $ 93,511 $ 83,813 $ 93,511 $ 83,813 equivalents at end ofperiodDomo, Inc.Reconciliation of Non-GAAP Financial Measures(in thousands, except per share data)(unaudited)Three Months Ended

Nine Months Ended

October 31,

October 31,

2019

2020

2019

2020

Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:Revenue:Subscription$

37,841

$

46,906

$

107,105

$

133,689

Cost of revenue:Subscription9,045

9,372

25,896

27,288

Subscription gross profit on a GAAP basis28,796

37,534

81,209

106,401

Subscription gross margin on a GAAP basis76

%

80

%

76

%

80

%

Stock-based compensation151

377

341

750

Subscription gross profit on a non-GAAP basis$

28,947

$

37,911

$

81,550

$

107,151

Subscription gross margin on a non-GAAP basis76

%

81

%

76

%

80

%

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$

56,952

$

58,042

$

173,839

$

167,318

Stock-based compensation(5,161

)

(9,469

)

(16,989

)

(22,437

)

Amortization of certain intangible assets(20

)

(20

)

(60

)

(60

)

Reversal of contingent tax-related accrual-

-

1,293

-

Total operating expenses on a non-GAAP basis$

51,771

$

48,553

$

158,083

$

144,821

Reconciliation of Operating Loss on a GAAP Basis to Operating Loss on a Non-GAAP Basis:Operating loss on a GAAP basis$

(26,649

)

$

(18,875

)

$

(88,093

)

$

(56,217

)

Stock-based compensation5,435

10,119

17,606

23,681

Amortization of certain intangible assets20

20

60

60

Reversal of contingent tax-related accrual-

-

(1,293

)

-

Operating loss on a non-GAAP basis$

(21,194

)

$

(8,736

)

$

(71,720

)

$

(32,476

)

Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis:Operating margin on a GAAP basis(60

)%

(35

)%

(69

)%

(37

)%

Stock-based compensation13

19

14

16

Amortization of certain intangible assets-

-

-

-

Reversal of contingent tax-related accrual-

-

(1

)

-

Operating margin on a non-GAAP basis(47

)%

(16

)%

(56

)%

(21

)%

Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis:Net loss on a GAAP basis$

(29,101

)

$

(22,221

)

$

(95,797

)

$

(65,019

)

Stock-based compensation5,482

10,291

17,748

23,948

Amortization of certain intangible assets20

20

60

60

Reversal of contingent tax-related accrual-

-

(1,293

)

-

Net loss on a non-GAAP basis$

(23,599

)

$

(11,910

)

$

(79,282

)

$

(41,011

)

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$

(1.05

)

$

(0.75

)

$

(3.50

)

$

(2.24

)

Stock-based compensation0.20

0.35

0.65

0.83

Amortization of certain intangible assets-

-

-

-

Reversal of contingent tax-related accrual-

-

(0.05

)

-

Net loss per share on a non-GAAP basis$

(0.85

)

$

(0.40

)

$

(2.90

)

$

(1.41

)

Billings:Total revenue$

44,766

$

53,645

$

127,224

$

153,337

Add:Deferred revenue (end of period)88,214

103,075

88,214

103,075

Deferred revenue, noncurrent (end of period)2,751

3,182

2,751

3,182

Less:Deferred revenue (beginning of period)(87,616

)

(101,982

)

(88,959

)

(105,290

)

Deferred revenue, noncurrent (beginning of period)(3,687

)

(2,248

)

(4,943

)

(4,454

)

(Decrease) increase in deferred revenue (current and noncurrent)(338

)

2,027

(2,937

)

(3,487

)

Billings$

44,428

$

55,672

$

124,287

$

149,850

Reconciliation of Net Cash Used in Operating Activities to Adjusted Net Cash Used in Operating Activities:Net cash used in operating activities$

(19,519

)

$

(1,716

)

$

(64,941

)

$

(19,420

)

Proceeds from shares issued in connection with employee stock purchase plan3,294

3,099

7,812

6,748

Adjusted net cash (used in) provided by operating activities$

(16,225

)

$

1,383

$

(57,129

)

$

(12,672

)

View source version on businesswire.com: https://www.businesswire.com/news/home/20201203006015/en/

CONTACT: Media - Julie Kehoe PR@domo.com

CONTACT: Investors - Peter Lowry IR@domo.com