Business Wire | Sep 3, 2020 04:05PM EDT

Domo Announces Second Quarter Fiscal 2021 Financial Results

Sep. 03, 2020

SILICON SLOPES, Utah--(BUSINESS WIRE)--Sep. 03, 2020--Domo, Inc. (Nasdaq: DOMO) today announced results for the fiscal 2021 second quarter ended July 31, 2020.

Fiscal Second Quarter Results

* Total revenue was $51.1 million, an increase of 23% year over year * Subscription revenue was $44.3 million, an increase of 27% year over year * Subscription revenue represented 87% of total revenue * Billings were $47.6 million or 23% year-over-year growth * Net cash used in operating activities was $4.8 million, an improvement of 74% year over year * Subscription gross margin was 80%, an improvement of 5 percentage points from Q2 FY20 * GAAP operating margin improved by 38 percentage points year over year * Non-GAAP operating margin improved by 41 percentage points year over year * GAAP net loss was $17.9 million, and GAAP net loss per share was $0.62, based on 29.0 million weighted-average shares outstanding * Non-GAAP net loss was $10.7 million, and non-GAAP net loss per share was $0.37, based on 29.0 million weighted-average shares outstanding * Cash, cash equivalents and short-term investments were $83.4 million as of July 31, 2020

"Domo was built for this new world of work where business agility is imperative to surviving and thriving," said Josh James, founder and CEO, Domo. "Since our IPO, we have been relentlessly focused on growing our business, while at the same time making our growth more efficient and driving to cash flow positive with the cash on our balance sheet. In Q2, we once again made great progress on this front as we help CIOs, CDOs and IT leaders solve some of their most complex and strategic data challenges at a speed and scale our customers have told us they've never seen."

Recent Highlights

We believe the following points and accolades from the last quarter are additional indicators of what's to come in our business through our commitment to product innovation, go-to-market initiatives and customer success:

* Domo was named an overall leader in customer experience and in vendor credibility for Business Intelligence (BI) in the Dresner Advisory Services' 2020 Wisdom of Crowds(r) Industry Excellence Awards for the fourth consecutive year. Domo was also named an experience and credibility Leader in Dresner's Customer Experience and Vendor Credibility models.

* Domo made Constellation Research's ShortLists for both Cloud-based BI and Analytics Platforms and Marketing Analytics Solutions.

* Domo was named to the Parity.org Best Companies for Women to Advance List 2020.

* Domo announced it is a founding member of Parity.org's ParityPledge in support of people of color, and it has extended its commitment to the ParityPledge by applying the pledge's recruiting principles throughout the organization.

Business Outlook

Based on information available as of September 3, 2020, Domo is providing the following guidance for Q3 and full year fiscal 2021:

Q3 Fiscal 2021

* Revenue is expected to be in the range of $51.2 million to $52.2 million * Non-GAAP net loss per share is expected to be between $0.42 and $0.46 based on 29.6 million weighted-average shares outstanding

Full Year Fiscal 2021

* Revenue is expected to be in the range of $202.5 million to $206.5 million * Non-GAAP net loss per share is expected to be between $1.83 and $1.91 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 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#2499486. A replay will be available via webcast or at (855) 859-2056 or (404) 537-3406 until midnight (ET) September 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. The social media channels that we intend to use as a means of disclosing the information described here may be updated from time to time as listed on our investor relations webpage.

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 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 July 31, 2020 expected to be filed with the SEC on or about September 9, 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 Six Months Ended July 31, July 31, 2019 2020 2019 2020

Revenue:Subscription $ 34,873 $ 44,347 $ 69,264 $ 86,783

Professional services and 6,787 6,784 13,194 12,909 otherTotal revenue 41,660 51,131 82,458 99,692

Cost of revenue:Subscription (1) 8,816 8,811 16,851 17,916

Professional services and 5,395 4,838 10,164 9,842 other (1)Total cost of revenue 14,211 13,649 27,015 27,758

Gross profit 27,449 37,482 55,443 71,934

Operating expenses:Sales and marketing (1) 29,501 27,384 65,450 56,480

Research and development 17,046 15,917 34,145 33,370 (1)General and administrative 9,275 9,557 17,292 19,426 (1), (2), (3)Total operating expenses 55,822 52,858 116,887 109,276

Loss from operations (28,373 ) (15,376 ) (61,444 ) (37,342 )

Other expense, net (1) (2,482 ) (2,417 ) (4,807 ) (5,141 )

Loss before provision for (30,855 ) (17,793 ) (66,251 ) (42,483 )income taxesProvision for income taxes 305 110 445 315

Net loss $ (31,160 ) $ (17,903 ) $ (66,696 ) $ (42,798 )

Net loss per share (basic $ (1.14 ) $ (0.62 ) $ (2.45 ) $ (1.49 )and diluted)Weighted-average number of 27,418 29,001 27,196 28,728 shares (basic and diluted) (1) Includes stock-basedcompensation expenses, asfollows:Cost of revenue:Subscription $ 67 $ 147 $ 190 $ 373

Professional services and 60 118 153 221 otherSales and marketing 2,041 2,543 6,049 4,369

Research and development 1,294 2,002 3,359 3,879

General and administrative 1,182 2,323 2,420 4,720

Other expense, net 47 48 95 95

Total stock-based $ 4,691 $ 7,181 $ 12,266 $ 13,657 compensation expenses (2) Includes amortizationof certain intangibleassets, as follows:General and administrative $ 20 $ 20 $ 40 $ 40

(3) Includes reversal ofcontingent tax-relatedaccrual, as follows:General and administrative $ - $ - $ (1,293 ) $ -

Domo, Inc.Condensed Consolidated Balance Sheets(in thousands)(unaudited) January 31, July 31, 2020 2020

AssetsCurrent assets:Cash and cash equivalents $ 80,843 $ 78,455

Short-term investments 17,967 4,899

Accounts receivable, net 47,967 34,933

Contract acquisition costs 12,676 12,872

Prepaid expenses and other current assets 12,809 9,756

Total current assets 172,262 140,915

Property and equipment, net 12,816 14,051

Right-of-use assets - 10,214

Contract acquisition costs, noncurrent 17,083 16,008

Intangible assets, net 3,865 3,663

Goodwill 9,478 9,478

Other assets 1,234 806

Total assets $ 216,738 $ 195,135

Liabilities and stockholders' deficitCurrent liabilities:Accounts payable $ 2,298 $ 1,774

Accrued expenses and other current liabilities 46,473 41,105

Lease liabilities - 4,076

Current portion of deferred revenue 105,290 101,982

Total current liabilities 154,061 148,937

Lease liabilities, noncurrent - 7,159

Deferred revenue, noncurrent 4,454 2,248

Other liabilities, noncurrent 6,329 6,584

Long-term debt 101,074 103,075

Total liabilities 265,918 268,003

Commitments and contingencies Stockholders' deficit:Common stock 28 29

Additional paid-in capital 988,141 1,007,022

Accumulated other comprehensive income 389 617

Accumulated deficit (1,037,738) (1,080,536)

Total stockholders' deficit (49,180) (72,868)

Total liabilities and stockholders' deficit $ 216,738 $ 195,135



Domo, Inc.Condensed Consolidated Statements of Cash Flows(in thousands)(unaudited) Three Months Ended Six Months Ended July 31, July 31, 2019 2020 2019 2020

Cash flows from operatingactivitiesNet loss $ (31,160 ) $ (17,903 ) $ (66,696 ) $ (42,798 )

Adjustments to reconcilenet loss to net cash usedin operating activities:Depreciation and 1,852 1,071 3,616 2,364 amortizationNon-cash lease expense - 1,002 - 1,953

Amortization of contract 2,817 3,512 5,495 6,920 acquisition costsStock-based compensation 4,691 7,181 12,266 13,657

Other, net 656 943 (3 ) 1,822

Changes in operatingassets and liabilities:Accounts receivable, net 5,071 (5,289 ) 17,285 13,034

Contract acquisition (2,924 ) (3,966 ) (4,986 ) (5,892 )costsPrepaid expenses and 1,105 3,352 (3,388 ) 3,565 other assetsAccounts payable (1,109 ) (639 ) (558 ) (594 )

Operating lease - (663 ) - (1,568 )liabilitiesAccrued and other 3,123 10,098 (5,854 ) (4,653 )liabilitiesDeferred revenue (2,866 ) (3,490 ) (2,599 ) (5,514 )

Net cash used in (18,744 ) (4,791 ) (45,422 ) (17,704 )operating activities Cash flows from investingactivitiesPurchases of property and (1,703 ) (1,791 ) (3,177 ) (3,154 )equipmentPurchases of securities (15,936 ) - (78,944 ) (11,149 )available for saleProceeds from maturities 43,500 7,700 43,500 24,300 of securities availablefor salePurchases of intangible - (1 ) - (105 )assetsNet cash provided by 25,861 5,908 (38,621 ) 9,892 (used in) investingactivities Cash flows from financingactivitiesProceeds from sharesissued in connection with - (10 ) 4,518 3,649 employee stock purchaseplanShares repurchased fortax withholdings on (112 ) (485 ) (1,012 ) (523 )vesting of restrictedstockProceeds from exercise of 93 2,048 1,431 2,059 stock optionsNet cash (used in) (19 ) 1,553 4,937 5,185 provided by financingactivitiesEffect of exchange rate 78 242 72 239 changes on cash and cashequivalentsNet increase (decrease) 7,176 2,912 (79,034 ) (2,388 )in cash and cashequivalentsCash and cash equivalents 90,763 75,543 176,973 80,843 at beginning of periodCash and cash equivalents $ 97,939 $ 78,455 $ 97,939 $ 78,455 at end of period

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, 2019 2020 2019 2020

Reconciliation ofSubscription GrossMargin on a GAAP Basisto Subscription GrossMargin on a Non-GAAPBasis:Revenue:Subscription $ 34,873 $ 44,347 $ 69,264 $ 86,783

Cost of revenue:Subscription 8,816 8,811 16,851 17,916

Subscription gross 26,057 35,536 52,413 68,867 profit on a GAAP basisSubscription gross 75 % 80 % 76 % 79 %margin on a GAAP basis Stock-based compensation 67 147 190 373

Subscription gross $ 26,124 $ 35,683 $ 52,603 $ 69,240 profit on a non-GAAPbasisSubscription gross 75 % 80 % 76 % 80 %margin on a non-GAAPbasis Reconciliation of TotalOperating Expenses on aGAAP Basis to TotalOperating Expenses on aNon-GAAP Basis:Total operating expenses $ 55,822 $ 52,858 $ 116,887 $ 109,276 on a GAAP basisStock-based compensation (4,517 ) (6,868 ) (11,828 ) (12,968 )

Amortization of certain (20 ) (20 ) (40 ) (40 )intangible assetsReversal of contingent - - 1,293 - tax-related accrualTotal operating expenses $ 51,285 $ 45,970 $ 106,312 $ 96,268 on a non-GAAP basis Reconciliation ofOperating Loss on a GAAPBasis to Operating Losson a Non-GAAP Basis:Operating loss on a GAAP $ (28,373 ) $ (15,376 ) $ (61,444 ) $ (37,342 )basisStock-based compensation 4,644 7,133 12,171 13,562

Amortization of certain 20 20 40 40 intangible assetsReversal of contingent - - (1,293 ) - tax-related accrualOperating loss on a $ (23,709 ) $ (8,223 ) $ (50,526 ) $ (23,740 )non-GAAP basis Reconciliation ofOperating Margin on aGAAP Basis to OperatingMargin on a Non-GAAPBasis:Operating margin on a (68 ) (30 ) (75 ) (37 )GAAP basis % % % %

Stock-based compensation 11 14 16 13

Amortization of certain - - - - intangible assetsReversal of contingent - - (2 ) - tax-related accrualOperating margin on a (57 ) (16 ) (61 ) (24 )non-GAAP basis % % % %

Reconciliation of NetLoss on a GAAP Basis toNet Loss on a Non-GAAPBasis:Net loss on a GAAP basis $ (31,160 ) $ (17,903 ) $ (66,696 ) $ (42,798 )

Stock-based compensation 4,691 7,181 12,266 13,657

Amortization of certain 20 20 40 40 intangible assetsReversal of contingent - - (1,293 ) - tax-related accrualNet loss on a non-GAAP $ (26,449 ) $ (10,702 ) $ (55,683 ) $ (29,101 )basis Reconciliation of NetLoss per Share on a GAAPBasis to Net Loss perShare on a Non-GAAPBasis:Net loss per share on a $ (1.14 ) $ (0.62 ) $ (2.45 ) $ (1.49 )GAAP basisStock-based compensation 0.18 0.25 0.45 0.48

Amortization of certain - - - - intangible assetsReversal of contingent - - (0.05 ) - tax-related accrualNet loss per share on a $ (0.96 ) $ (0.37 ) $ (2.05 ) $ (1.01 )non-GAAP basis Billings:Total revenue $ 41,660 $ 51,131 $ 82,458 $ 99,692

Add:Deferred revenue (end of 87,616 101,982 87,616 101,982 period)Deferred revenue, 3,687 2,248 3,687 2,248 noncurrent (end ofperiod)Less:Deferred revenue (89,219 ) (104,804 ) (88,959 ) (105,290 )(beginning of period)Deferred revenue, (4,950 ) (2,916 ) (4,943 ) (4,454 )noncurrent (beginning ofperiod)Decrease in deferred (2,866 ) (3,490 ) (2,599 ) (5,514 )revenue (current andnoncurrent)Billings $ 38,794 $ 47,641 $ 79,859 $ 94,178

Reconciliation of NetCash Used in OperatingActivities to AdjustedNet Cash Used inOperating Activities:Net cash used in $ (18,744 ) $ (4,791 ) $ (45,422 ) $ (17,704 )operating activitiesProceeds from sharesissued in connection - (10 ) 4,518 3,649 with employee stockpurchase planAdjusted net cash used $ (18,744 ) $ (4,801 ) $ (40,904 ) $ (14,055 )in operating activities

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CONTACT: Media - Julie Kehoe PR@domo.com

CONTACT: Investors - Peter Lowry IR@domo.com