Customer Base and Revenue - As of January 31, 2023, Domo had over 2,500 organizations as customers, with an annual recurring revenue (ARR) net retention rate of 106% for the year ended January 31, 2023[24]. - Total revenue for Domo was $308.6 million for the year ended January 31, 2023, representing a year-over-year growth of 20%[25]. - As of January 31, 2023, the company had over 2,500 customers, with 78% of revenue derived from U.S. customers[78]. - 65% of customers were under multi-year contracts as of January 31, 2023, up from 62% in 2022 and 60% in 2021, enhancing subscription revenue predictability[80]. - A majority of annual recurring revenue is up for renewal during the fiscal year ending January 31, 2024, with potential fluctuations in renewal rates due to various factors[141]. Financial Performance - Domo's annual net loss was $105.6 million for the year ended January 31, 2023, compared to $102.1 million in 2022[25]. - The company incurred net losses of $105.6 million for the year ended January 31, 2023, with an accumulated deficit of $1,330.0 million[112]. - Cash used in operating activities was $10.9 million for the year ended January 31, 2023, while cash provided was $0.4 million for the year ended January 31, 2022[118]. - As of January 31, 2023, the company had $66.5 million in cash, cash equivalents, and restricted cash, with $3.7 million being restricted cash[118]. - The company has experienced negative or close to break-even cash flows from operating activities since inception[118]. Product and Technology - Domo's platform processes several hundred trillion rows from uncached queries on a typical business day, maintaining a subsecond average query response time[40]. - Domo offers more than 1,000 powerful connectors, enabling real-time data synchronization across a broad range of sources[23]. - The Domo platform allows for real-time access to data, enabling employees to design customized views and analyze trends effectively[28]. - The platform's artificial intelligence capabilities provide personalized alerts and recommendations based on real-time data analysis[29]. - Domo's data warehouse, Adrenaline, supports massive data storage and parallel querying, allowing simultaneous access for employees[23]. Research and Development - Domo has invested $730.4 million in research and development to enhance its platform, resulting in over 1,000 first-class connectors and a comprehensive cloud-based solution[44]. - Research and development expenses increased from $66.5 million in fiscal year 2021 to $95.1 million in fiscal year 2023[93]. - The company focuses on continuous research and development to introduce new platform enhancements and maintain competitiveness in the market[92]. - The company has made significant investments in research and development to enhance its platform and expand usage among existing customers[142]. Market Strategy and Expansion - The company aims to expand its international market presence, particularly in Japan, Asia Pacific, and EMEA regions[46]. - The company plans to continue investing in growth, including sales and marketing, technology enhancements, and international expansion[114]. - The company anticipates continued development of third-party relationships to support business growth[83]. - The company plans to continue expanding international operations as part of its growth strategy, facing various risks and challenges[197]. Operational Challenges - The sales cycle for new enterprise customers can vary from approximately six months to multiple years, leading to unpredictability in sales and operating performance[124]. - The company faces challenges in attracting new customers cost-effectively, which could slow revenue growth due to market acceptance and competitive pressures[139]. - A significant majority of the company's costs are expensed as incurred, while revenue is recognized over the subscription term, complicating financial performance management[122]. - The company may need to raise additional funds to support growth opportunities and product development[119]. Compliance and Legal Risks - The company is subject to securities class-action litigation, which could result in significant legal expenses and negatively impact business operations[186]. - The company is subject to various anti-bribery, anti-corruption, and anti-money laundering laws, which could lead to significant penalties and adverse consequences if violated[205]. - The California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA) impose new obligations on data handling, with enforcement anticipated to commence in July 2023[208]. - The General Data Protection Regulation (GDPR) imposes penalties of up to €20 million or 4% of global annual revenues for non-compliance, affecting operational costs and data handling practices[209]. Cybersecurity and Data Privacy - The company faces risks related to privacy and cybersecurity, with increasing regulatory scrutiny and potential liabilities due to evolving data protection laws[207]. - The company acknowledges the potential for unauthorized access and misuse of sensitive customer data due to security vulnerabilities[219]. - Techniques used in cyberattacks change frequently, making it difficult for the company to anticipate and implement preventative measures[219]. - Security breaches may remain undetected for extended periods, posing ongoing risks to the company's systems[219]. Human Resources and Management - The company had 967 employees as of January 31, 2023, with 773 located in the United States[106]. - The inability to attract, integrate, and retain qualified personnel could adversely affect the business, especially in new geographies[189]. - The effectiveness of sales and marketing efforts is critical for revenue growth, with challenges in recruiting and retaining qualified sales personnel[185]. - Management and board turnover has created uncertainties, with significant changes including the resignation and re-appointment of key executives[188].

Domo, Inc. (NASDAQ:DOMO) Q4 2023 Results Conference Call March 6, 2023 5:00 PM ET Company Participants Peter Lowry - Investor Relations John Mellor - CEO (Outgoing) Josh James - CEO Julie Kehoe - Chief Communications Officer David Jolley - CFO Conference Call Participants Eric Martinez - Lake Street Capital Markets Derrick Wood - Cowen Kamil Mielczarek - William Blair Sanjit Singh - Morgan Stanley Operator Good afternoon, ladies and gentlemen, and welcome to the Domo Q4 Fiscal Year 2023 Earnings Conference ...

Domo, Inc. (NASDAQ:DOMO) Q3 2023 Earnings Conference Call December 8, 2022 5:00 PM ET Corporate Participants Peter Lowry - Vice President of Investor Relations Julie Kehoe - Chief Communications Officer John Mellor - Chief Executive Officer Bruce Felt - Chief Financial Officer Conference Call Participants Derrick Wood - Cowen Pat Walravens - JMP Securities Eric Martinuzzi - Lake Street Capital Markets Operator Hello, everyone, and welcome to the Domo Q3 Fiscal Year 2023 Earnings Call. Today's call is being ...

Revenue and Growth - Total revenue for the three months ended October 31, 2022, was $79.0 million, reflecting a year-over-year increase of 21% from $65.1 million in the same period of 2021[198]. - Billings for the three months ended October 31, 2022, were $74.0 million, compared to $70.2 million in the same period of 2021, indicating growth in subscription renewals and upsells[221]. - Subscription revenue increased by 22% from $56,621 thousand in Q3 2021 to $69,041 thousand in Q3 2022, driven by a $7.5 million increase from new customers and a $4.9 million increase from existing customers[238]. - Total revenue for Q3 2022 was $79,026 thousand, up 21% from $65,081 thousand in Q3 2021[238]. - Subscription revenue increased by $37.6 million, or 23%, from $163.4 million in the nine months ended October 31, 2021, to $201.0 million in the same period of 2022[249]. - Total revenue rose by $41.1 million, or 22%, from $188.0 million to $229.0 million during the same period[249]. Customer Metrics - Remaining performance obligations (RPO) grew by 19% year-over-year, reaching $354.3 million as of October 31, 2022, compared to $296.9 million in 2021[197]. - The gross retention rate improved to 91% for the 12 months ended October 31, 2022, up from 90% in the previous year[212]. - As of October 31, 2022, the company had over 2,500 customers, with enterprise customers accounting for 50% of revenue for the three months ended October 31, 2022[207]. - Customer count increased by 14% from October 31, 2021, to October 31, 2022[238]. Financial Performance - The company incurred a net loss of $23.7 million for the three months ended October 31, 2022, compared to a net loss of $28.5 million in the same period of 2021[201]. - The company reported a net loss of $23,711 thousand in Q3 2022, compared to a net loss of $28,513 thousand in Q3 2021[234]. - Gross profit rose by 25% from $47,937 thousand in Q3 2021 to $60,112 thousand in Q3 2022, resulting in a gross margin increase from 74% to 76%[240]. - Gross profit improved by $34.8 million, or 25%, from $139.3 million to $174.1 million, with total gross margin increasing from 74% to 76%[251]. Expenses and Costs - Research and development expenses as a percentage of total revenue decreased to 31% for the three months ended October 31, 2022, from 34% in the same period of 2021[218]. - Sales and marketing expenses as a percentage of total revenue decreased to 52% for the three months ended October 31, 2022, compared to 58% in the same period of 2021[216]. - Total operating expenses increased from $72,917 thousand in Q3 2021 to $78,624 thousand in Q3 2022, with sales and marketing expenses rising from $37,503 thousand to $41,012 thousand[234]. - Operating expenses increased by $49.0 million, or 25%, from $197.9 million to $246.9 million, with sales and marketing expenses rising by $26.9 million, or 26%[254]. - The cost of subscription revenue increased by 8% from $10,514 thousand in Q3 2021 to $11,342 thousand in Q3 2022, primarily due to a $1.4 million increase in third-party web hosting services[240]. Cash and Debt Management - As of October 31, 2022, the company had $71.1 million in cash and cash equivalents, with a $100 million credit facility fully drawn[260]. - The company has drawn the full $100 million from its credit facility, with a term loan maturity date set for April 1, 2025, and an interest rate of approximately 9.3% as of October 31, 2022[266][287]. - The company had total debt outstanding of $107.4 million as of October 31, 2022, with a maximum allowable debt-to-annualized recurring revenue ratio of 0.525[267][288]. - The structured payables agreement allows for a maximum outstanding principal balance of $5.0 million, with an annual limit of $60.0 million, and no interest expense was recognized related to this agreement during the three and nine months ended October 31, 2022[269]. - The company had $71.1 million in cash, cash equivalents, and restricted cash as of October 31, 2022, with $3.7 million classified as restricted cash[286]. Future Outlook - The company expects revenue growth rates to decline in the near term due to decreased sales capacity from higher turnover among sales representatives[199]. - The company expects total revenue growth rate to decrease for the remainder of fiscal 2023 and likely into the first half of fiscal 2024[238]. - The company plans to continue investing in growth opportunities, product development, and sales and marketing over the long term[262]. Other Considerations - The company experienced net cash provided by financing activities of $2.4 million for the nine months ended October 31, 2022, compared to a net cash used of $0.8 million in the same period of 2021[271][279]. - Significant cash outflows for the nine months ended October 31, 2022 included $150.5 million for personnel costs and $45.0 million for marketing programs and events[274]. - The company is required to comply with a financial covenant based on the ratio of outstanding indebtedness to annualized recurring revenue, with compliance confirmed as of January 31, 2022, and October 31, 2022[268]. - The company has not engaged in hedging foreign currency transactions to date but is considering the costs and benefits of such a program as it expands international operations[290]. - Inflation has not materially affected the company's financial condition or results of operations to date, with subscription contracts often tied to the Consumer Price Index[291].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION __________________________ WASHINGTON, D.C. 20549 __________________________ Form 10-Q __________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to . Commission File Number 001-38553. DOMO, INC. (Exact Name of Registrant as Spe ...

Financial Data and Key Metrics Changes - In Q2 2023, the company reported a 21% growth in billings, a 20% increase in total revenue, and a 23% rise in subscription revenue [4][14] - Subscription gross margin reached a record 85.3%, up 2.6 percentage points year-over-year [16] - The net loss for the quarter was $8.7 million, an improvement from $9.6 million a year ago, with a net loss per share of $0.26 [17] Business Line Data and Key Metrics Changes - Corporate sales experienced over 25% growth in new Annual Contract Value (ACV) and revenue growth exceeding 30% [5][6] - In contrast, enterprise revenue growth was only about 10% with ACV growth of 6%, indicating challenges in this segment [7][8] - The company is reallocating resources towards corporate sales due to more efficient growth opportunities [8][9] Market Data and Key Metrics Changes - International revenue represented 22% of total revenue, up from 21% in the previous quarter [16] - The company continues to add new logo customers, with notable wins in the corporate sector, including a Fortune 50 pharmaceutical company and HelloFresh [10][11] Company Strategy and Development Direction - The company is focusing on driving digital transformation for organizations of all sizes, which is expected to fuel long-term growth [9] - A cost reduction plan has been implemented for the second half of the year to improve profitability and cash flow [8][20] - The company aims to achieve a non-GAAP positive operating margin and meaningful cash flow in the long term [8][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the changes made to the enterprise go-to-market strategy did not yield the expected results, leading to increased turnover [7][28] - The company remains committed to enterprise customer success but is prioritizing corporate sales for more predictable growth [8][29] - The outlook for Q3 has been adjusted, with billings growth expected to be around 13% year-over-year, down from previous estimates [20][21] Other Important Information - The company hired Wendy Steinle as Chief Marketing Officer, bringing extensive B2B software marketing experience [12] - Domo was recognized as a leader in various industry analyst reports, validating its technology and market position [12] Q&A Session Summary Question: What are the drivers of the full-year guidance? - Management indicated that the lower revenue guidance is primarily driven by internal factors related to sales capacity rather than macroeconomic conditions [23] Question: What went wrong with the enterprise strategy? - Management noted that the enterprise segment faced challenges with predictability and the cost and time required to sell to these customers [28] Question: What is the new strategy for the enterprise part of the business? - The company will continue to maintain a significant enterprise go-to-market strategy but will shift more resources towards corporate sales [29] Question: What caused the recent turnover in sales reps? - The turnover was attributed to changes in quotas and territory assignments, which impacted ramped reps' performance [42] Question: How is the company addressing the sales capacity issue? - Management is focused on improving retention and ramping capacity among new hires, with a record number of sales headcount currently onboard [25][30]

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for the period [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for Domo, Inc., including the balance sheets, statements of operations, comprehensive loss, stockholders' deficit, and cash flows, along with detailed notes explaining the accounting policies and specific financial line items [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and stockholders' deficit at specific points in time Condensed Consolidated Balance Sheets | Metric | As of Jan 31, 2022 (in millions) | As of Apr 30, 2022 (in millions) | | :-------------------------- | :------------------------------- | :------------------------------- | | Total Assets | $244.589 | $231.872 | | Total Liabilities | $370.567 | $363.826 | | Total Stockholders' Deficit | $(125.978) | $(131.954) | - Total assets decreased by **approximately $12.7 million**, while total liabilities decreased by **approximately $6.7 million**, leading to an increased stockholders' deficit of **approximately $6 million** from January 31, 2022, to April 30, 2022[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss over a specific reporting period Condensed Consolidated Statements of Operations | Metric | Three Months Ended Apr 30, 2021 (in millions) | Three Months Ended Apr 30, 2022 (in millions) | Change ($) | Change (%) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :--------- | :--------- | | Total Revenue | $60.062 | $74.464 | $14.402 | 24% | | Gross Profit | $44.904 | $56.803 | $11.899 | 26% | | Total Operating Expenses | $59.858 | $85.438 | $25.580 | 43% | | Loss from Operations | $(14.954) | $(28.635) | $(13.681) | 91% | | Net Loss | $(18.104) | $(32.888) | $(14.784) | 82% | | Net Loss per Share (basic & diluted) | $(0.580) | $(0.990) | $(0.410) | 71% | - Total revenue increased by **24%** year-over-year, driven by subscription and professional services growth. However, total operating expenses increased by **43%**, leading to a significant increase in net loss by **82%** and net loss per share by **71%**[14](index=14&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents the net loss and other comprehensive income or loss components, leading to the total comprehensive loss Condensed Consolidated Statements of Comprehensive Loss | Metric | Three Months Ended Apr 30, 2021 (in millions) | Three Months Ended Apr 30, 2022 (in millions) | | :----------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Loss | $(18.104) | $(32.888) | | Foreign currency translation adjustments | $(0.004) | $(0.703) | | Comprehensive Loss | $(18.108) | $(33.591) | - Comprehensive loss significantly increased from **$(18.1) million** in 2021 to **$(33.6) million** in 2022, primarily due to the higher net loss and a substantial increase in negative foreign currency translation adjustments[18](index=18&type=chunk) [Condensed Consolidated Statements of Stockholders' Deficit](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Deficit) This section outlines changes in the components of stockholders' deficit, including accumulated deficit and additional paid-in capital Condensed Consolidated Statements of Stockholders' Deficit | Metric | As of Jan 31, 2022 (in millions) | As of Apr 30, 2022 (in millions) | | :-------------------------------------- | :------------------------------- | :------------------------------- | | Total Stockholders' Deficit | $(125.978) | $(131.954) | | Additional Paid-in Capital | $1,098.084 | $1,125.699 | | Accumulated Deficit | $(1,224.483) | $(1,257.371) | | Accumulated Other Comprehensive Income (Loss) | $0.388 | $(0.315) | - The accumulated deficit increased by **approximately $32.9 million** from January 31, 2022, to April 30, 2022, reflecting the net loss for the period. Additional paid-in capital increased by **$27.6 million**, partly due to stock-based compensation expense[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows | Metric | Three Months Ended Apr 30, 2021 (in millions) | Three Months Ended Apr 30, 2022 (in millions) | | :-------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash (used in) provided by operating activities | $(2.728) | $0.781 | | Net cash used in investing activities | $(1.778) | $(1.937) | | Net cash (used in) provided by financing activities | $(1.457) | $2.287 | | Net (decrease) increase in cash and cash equivalents | $(5.968) | $0.434 | | Cash and cash equivalents at end of period | $84.826 | $83.995 | - The company shifted from net cash used in operating activities (**$2.7 million**) in Q1 2021 to net cash provided by operating activities (**$0.8 million**) in Q1 2022. Net cash from financing activities also turned positive, contributing to a net increase in cash and cash equivalents in Q1 2022, compared to a decrease in Q1 2021[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the accounting policies, significant estimates, and specific line items within the financial statements - Domo, Inc. provides a cloud-based platform that digitally connects everyone from the CEO to the frontline employee with all the data, systems and people in an organization, giving them access to real-time data and insights and allowing them to manage their business from their smartphones[29](index=29&type=chunk) - The preparation of the condensed consolidated financial statements requires management to make estimates, judgments and assumptions that affect the amounts reported, including for revenue recognition, contract acquisition costs, and stock-based compensation[33](index=33&type=chunk) - Revenue is primarily derived from subscriptions to its cloud-based platform (recognized ratably over the contractual term) and professional services (recognized as services are provided)[61](index=61&type=chunk)[64](index=64&type=chunk)[67](index=67&type=chunk) - Amortization expense related to contract acquisition costs was **$4.3 million** for the three months ended April 30, 2022, up from **$3.9 million** in the prior year[43](index=43&type=chunk) - Total stock-based compensation expense was **$25.3 million** for the three months ended April 30, 2022, a significant increase from **$10.1 million** in the prior year[149](index=149&type=chunk) - The company has a credit facility permitting up to **$100.0 million** in term loan borrowings, all of which had been drawn as of April 30, 2022. The interest rate was **approximately 7%** as of April 30, 2022[119](index=119&type=chunk)[121](index=121&type=chunk) - Total remaining performance obligations (RPO) were **$351.5 million** as of April 30, 2022, representing a year-over-year growth of **24%**. Approximately **$205.7 million** of subscription RPO and **$19.3 million** of professional services RPO are expected to be recognized in the next twelve months[181](index=181&type=chunk)[115](index=115&type=chunk) - Revenue from customers with billing addresses in the United States comprised **79%** of total revenue for the three months ended April 30, 2022, up from **77%** in the prior year. Japan accounted for **9%** and other regions **12%**[118](index=118&type=chunk) - The financial statements are unaudited and prepared in conformity with GAAP, reflecting all necessary adjustments for fair presentation[31](index=31&type=chunk) - The company's fiscal year ends on January 31[30](index=30&type=chunk) - Results for the three months ended April 30, 2022, are not necessarily indicative of results to be expected for the fiscal year ending January 31, 2023, or any other future period[31](index=31&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, highlighting key trends, factors affecting performance, and future outlook. It also includes a discussion of the impact of COVID-19 and critical accounting policies - Domo's vision is to digitally connect everyone within the enterprise with real-time, rich, relevant data, enabling collaboration and business management from smartphones[178](index=178&type=chunk) - As of April 30, 2022, **64%** of customers were under multi-year contracts on a dollar-weighted basis, up from **62%** as of January 31, 2022, which has enhanced the predictability of subscription revenue[180](index=180&type=chunk) - Total revenue increased by **24%** year-over-year to **$74.5 million** for the three months ended April 30, 2022[182](index=182&type=chunk) - The company incurred net losses of **$32.9 million** for the three months ended April 30, 2022, and expects to incur losses for the foreseeable future, with an accumulated deficit of **$1,257.4 million**[184](index=184&type=chunk) - The COVID-19 pandemic's full impact is uncertain, potentially affecting customer acquisition, retention, and technology spending. Sales and professional services activities have largely shifted to remote work[186](index=186&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - The company had over **2,400** customers as of April 30, 2022. Enterprise customers (over **$1 billion** in revenue) accounted for **49%** of revenue in Q1 2022, down from **55%** in Q1 2021[192](index=192&type=chunk) - Gross retention rate improved to **93%** for the 12 months ended April 30, 2022, from **89%** in the prior year[197](index=197&type=chunk) - Sales and marketing expense as a percentage of total revenue increased to **61%** for Q1 2022 from **56%** for Q1 2021, with plans to continue hiring more sales representatives[201](index=201&type=chunk)[199](index=199&type=chunk) - The company plans to continue investments in machine learning algorithms, predictive analytics, and other artificial intelligence technologies. Research and development expense as a percentage of total revenue increased to **31%** for Q1 2022 from **27%** for Q1 2021[202](index=202&type=chunk)[203](index=203&type=chunk) - Billings increased to **$72.9 million** for the three months ended April 30, 2022, from **$58.2 million** in the prior year[206](index=206&type=chunk) - As of April 30, 2022, cash and cash equivalents were **$84.0 million**, and the **$100 million** credit facility was fully drawn. Management believes existing cash will be sufficient for at least the next 12 months[232](index=232&type=chunk)[234](index=234&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section discusses the company's exposure to market risks, specifically interest rate risk and foreign currency exchange rate risk, and how these risks are managed - As of April 30, 2022, the company had **$84.0 million** in cash and cash equivalents, primarily in money market funds and certificates of deposit, with no material exposure to changes in fair value from interest rate fluctuations due to their short-term nature[258](index=258&type=chunk) - The company had **$105.1 million** in total debt outstanding as of April 30, 2022. A hypothetical **10%** change in interest rates would not have a material impact on the fair value of outstanding debt or returns on cash[260](index=260&type=chunk) - A portion of the interest on the **$100 million** credit facility accrues at a floating rate (**approximately 7%** as of April 30, 2022), while another portion is capitalized at a fixed rate of **2.5%**[259](index=259&type=chunk) - The company is exposed to foreign currency risks related to revenue and operating expenses denominated in Japanese Yen, British Pound Sterling, and Australian Dollar. No hedging program is currently in place, but it is under consideration[261](index=261&type=chunk)[262](index=262&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the principal executive and financial officers, evaluated the effectiveness of disclosure controls and procedures, concluding they were effective at a reasonable assurance level as of April 30, 2022. No material changes to internal control over financial reporting were identified - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of April 30, 2022[264](index=264&type=chunk) - There were no material changes in internal control over financial reporting during the period covered by this report[265](index=265&type=chunk) - Management acknowledges the inherent limitations of control systems, which can only provide reasonable assurance and may not prevent all errors or fraud[266](index=266&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, and other miscellaneous information pertinent to the company's operations and financial health [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal proceedings, including a securities class action and a shareholder derivative lawsuit, and management's assessment of their potential impact - A securities class action complaint (Volonte v. Domo, Inc., et. al) alleging violations of securities laws related to the June 2018 IPO is currently on appeal after initial dismissal. Management believes the lawsuit is without merit[269](index=269&type=chunk) - A shareholder derivative complaint (Zalvin v. James, et al.) was filed in August 2021, alleging breaches of fiduciary duties by the former CEO and certain directors regarding excessive equity awards. A motion to dismiss has been filed[271](index=271&type=chunk)[272](index=272&type=chunk) - Management believes that the outcome of other legal proceedings will not have a material impact on the company's financial condition, results of operations, or liquidity[273](index=273&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This extensive section outlines numerous risks and uncertainties that could materially affect the company's business, operating results, and financial condition, categorized into risks related to financial position, customer relationships, products, personnel, privacy/cybersecurity, intellectual property, and corporate governance - The ongoing COVID-19 pandemic presents inherent uncertainties, potentially impacting customer acquisition, retention, technology spending, and overall business operations, with sales and professional services largely conducted remotely[277](index=277&type=chunk)[281](index=281&type=chunk) - The company has a history of net losses and an accumulated deficit of **$1,257.4 million** as of April 30, 2022, and expects to incur losses for the foreseeable future, making profitability uncertain[286](index=286&type=chunk) - A limited operating history makes forecasting future operating results difficult and subjects the company to uncertainties in planning future growth, market adoption, and competition[288](index=288&type=chunk) - The ability to raise future capital may be limited, and failure to secure needed funds could prevent growth or force delays/elimination of product development efforts[298](index=298&type=chunk) - The company faces intense and increasing competition from large software companies and business analytics providers, which could reduce demand for its platform and adversely affect business, growth, revenue, and market share[349](index=349&type=chunk)[350](index=350&type=chunk)[351](index=351&type=chunk) - Success depends on adapting to rapidly changing technology, evolving industry standards, and changing customer needs, requiring continuous enhancements and investments in R&D, including AI technologies[364](index=364&type=chunk) - As a cloud service provider, the company's operations involve storing and transmitting sensitive customer data, making it vulnerable to cyber-attacks, breaches, and data loss, which could damage reputation and incur significant liabilities[431](index=431&type=chunk)[435](index=435&type=chunk) - The company's success is dependent on protecting its proprietary technology, including **119** issued U.S. patents. However, patents may be challenged, and enforcement of intellectual property rights can be costly and time-consuming[458](index=458&type=chunk)[462](index=462&type=chunk) - The dual class structure of common stock concentrates voting control with Joshua G. James (**approximately 81%** voting power), limiting other stockholders' ability to influence important transactions, including a change in control[465](index=465&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various certifications and interactive data files - The exhibits include certifications of the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1)[496](index=496&type=chunk)[497](index=497&type=chunk)[500](index=500&type=chunk) - Interactive Data Files in Inline XBRL format are provided, including Instance, Schema, Calculation, Definition, Label, and Presentation Linkbase Documents (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE)[498](index=498&type=chunk) - Management contracts related to Joshua James, including a Letter Agreement, Separation and Transition Agreement, and Registration Rights Agreement, are listed as exhibits[500](index=500&type=chunk) [Signatures](index=74&type=section&id=Signatures) This section contains the official signatures, confirming the submission of the report by Domo, Inc. - The report was signed by Bruce Felt, Chief Financial Officer (Principal Financial and Accounting Officer) of Domo, Inc. on June 7, 2022[505](index=505&type=chunk)

Financial Data and Key Metrics Changes - The company reported a billings growth of 25% and total revenue growth of 24% for Q1 2023, with subscription revenue also growing by 24% [4][23][28] - The subscription gross margin reached a record of over 84%, up 1.2 percentage points year-over-year [29] - The net loss for the quarter was $7.6 million, slightly improved from $8 million a year ago, with a net loss per share of $0.23 [31] Business Line Data and Key Metrics Changes - The corporate business showed strong growth, consistently generating new logos and achieving a gross retention rate of over 90% [24][25] - Subscription revenue represented 87% of total revenue, marking a substantial acceleration from 19% growth in the previous quarter [28] - The current remaining performance obligation (RPO) grew 24% year-over-year to $225 million [27] Market Data and Key Metrics Changes - International revenue accounted for 21% of total revenue, maintaining a similar mix to the previous quarter [29] - The company expects to exit fiscal year 2023 with subscription revenue growth of about 25% [29] Company Strategy and Development Direction - The company is focusing on three strategic priorities: maintaining growth, increasing enterprise cadence, and emphasizing data apps [10][11] - Domo aims to leverage existing resources to help businesses reduce costs and improve efficiencies, particularly in uncertain economic times [5][9] - The company is transitioning from a per-user pricing model to a consumption-based pricing model to encourage broader adoption of its platform [43] Management's Comments on Operating Environment and Future Outlook - Management noted that despite concerns about a potential economic slowdown, customer demand remained strong in Q1 [8][9] - The company believes that the modernization of business practices will continue, as organizations seek to unlock data value [9] - Management expressed confidence in navigating potential economic downturns, citing a resilient revenue stream primarily from renewals and upselling [46][55] Other Important Information - Domo appointed Ian Tickle as President of Global Revenue and Field Operations, succeeding Wolf Maasberg [19] - The company received industry recognition, being named the 1 vendor in Self-Service BI for the fifth consecutive year [20] - In Q1, 36% of new hires were diverse candidates, reflecting the company's commitment to building an inclusive workplace [21] Q&A Session Summary Question: How does Domo fit into the enterprise landscape amid potential spending slowdowns? - Management highlighted Domo's unique position in addressing the last mile of data utilization, emphasizing the importance of agility and speed in current business environments [40][41] Question: How has Domo's pricing model evolved? - The company is shifting from a per-seat model to a consumption-based model to encourage wider adoption and usage across organizations [43] Question: What are the assumptions behind the full-year guidance? - Management maintained guidance due to optimism about sales hiring and resilience in revenue streams, while also considering macroeconomic concerns [45][46] Question: What strategies are being implemented to improve enterprise go-to-market efforts? - The company is focusing on verticalization of the sales team to address specific business pains in various industries [51][52] Question: How does Domo differentiate itself from competitors like Microsoft? - Domo's value proposition lies in addressing clear business pains and delivering quick results, which has proven effective in competitive situations against Power BI [59] Question: What is the current state of the balance sheet? - The company has $84 million in cash and $105 million in debt, with no immediate need for additional cash, indicating a strong balance sheet position [60]

PART I [Business](index=7&type=section&id=Item%201.%20Business) Domo, Inc. offers a cloud-based business intelligence platform, the Domo Business Cloud, connecting organizations for data-driven decisions Revenue and Net Loss Overview (in millions) | Fiscal Year Ended January 31, | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | | **Total Revenue (in millions)** | $173.4 | $210.2 | $258.0 | | **Year-over-Year Growth** | - | 21% | 23% | | **Net Loss (in millions)** | $125.7 | $84.6 | $102.1 | - As of January 31, 2022, Domo had more than **2,300** organizations as customers[30](index=30&type=chunk) - The company's subscription net revenue retention rate has averaged **over 105%** for the fiscal years 2020, 2021, and 2022[30](index=30&type=chunk) [Overview](index=7&type=section&id=Item%201.%20Business%23Overview) Domo's Business Cloud is a modern BI platform integrating data processes, designed for scalability and rapid data analysis with a 'land, expand, and retain' model - Domo's Business Cloud is a modern BI platform that integrates data connection, storage, preparation, analysis, visualization, and sharing[20](index=20&type=chunk)[21](index=21&type=chunk) - The platform is built to handle massive data volumes, with customers querying several hundred trillion rows from uncached queries on a typical day, while maintaining a subsecond average query response time[21](index=21&type=chunk) [The Domo Solution](index=8&type=section&id=Item%201.%20Business%23The%20Domo%20Solution) The Domo solution empowers data leverage across the organization through mobile access, real-time connectors, AI-driven insights, and an app ecosystem - Enables all employees to connect to, analyze, and leverage data from their smartphones, increasing data value across the organization[33](index=33&type=chunk) - Provides real-time data access through **over 1,000** first-class connectors and flexible universal connectors[34](index=34&type=chunk) - Leverages AI and machine learning (Mr Roboto) to provide proactive alerts and recommended actions[28](index=28&type=chunk)[35](index=35&type=chunk) - Features the Domo Appstore, an ecosystem for partners and users to build and share intelligent applications, driving platform adoption and network effects[37](index=37&type=chunk) [Growth Strategies](index=12&type=section&id=Item%201.%20Business%23Growth%20Strategies) Domo's growth strategy focuses on expanding its customer base, accelerating existing customer adoption, enhancing platform functionality, growing its partner ecosystem, and leveraging aggregated data - Increase the overall customer base, with a focus on international markets like Japan, Asia Pacific, and EMEA[63](index=63&type=chunk) - Accelerate expansion within existing customers using a 'land, expand, and retain' model[64](index=64&type=chunk) - Continue to invest in enhancing platform functionality, including ease of use, scalability, security, IoT, and AI capabilities[65](index=65&type=chunk) - Expand the ecosystem of customer influencers, strategic partners, and third-party developers[66](index=66&type=chunk) - Leverage aggregated data to create performance benchmarks and indices to attract and retain customers[67](index=67&type=chunk) [Our Technology](index=12&type=section&id=Item%201.%20Business%23Our%20Technology) Domo's technology integrates connectors, a fast data warehouse, ETL tools, analysis, collaboration, AI, and an app platform with mobile-first design and enterprise security - The platform features **over 1,000** first-class connectors and a Connector Dev Studio for users to build their own[72](index=72&type=chunk) - The Adrenaline data warehouse and fast query engine enable subsecond average query response times on massive datasets[74](index=74&type=chunk)[76](index=76&type=chunk) - Fusion, the self-service ETL toolset, allows users of all skill levels to clean, combine, and transform data with a drag-and-drop interface or SQL-based dataflows[79](index=79&type=chunk)[80](index=80&type=chunk) - Mr Roboto leverages AI and machine learning for alerts, anomaly detection, and predictive analytics[93](index=93&type=chunk) - The technology is designed with mobile-first functionality, ensuring content created once is immediately available on all devices[99](index=99&type=chunk)[100](index=100&type=chunk) - Enterprise-grade security features include customer-controlled encryption key management (BYOK), access controls, and compliance with standards like SOC 1, SOC 2 + HITRUST, and HIPAA[49](index=49&type=chunk)[105](index=105&type=chunk)[111](index=111&type=chunk) [Customers](index=17&type=section&id=Item%201.%20Business%23Customers) As of January 31, 2022, Domo served **over 2,300** diverse customers, with **77%** of FY2022 revenue from the United States - As of January 31, 2022, Domo had **over 2,300** customers[113](index=113&type=chunk) - For the fiscal year ended January 31, 2022, **77%** of revenue came from customers in the United States[113](index=113&type=chunk) - No single customer represented more than **10%** of revenue in fiscal years 2020, 2021, or 2022[113](index=113&type=chunk) [Sales and Marketing](index=17&type=section&id=Item%201.%20Business%23Sales%20and%20Marketing) Domo sells its subscription-based platform via direct sales and free trials, with **62%** of customers on multi-year contracts as of January 2022 - Sales are generated primarily through a direct sales team, supplemented by free trials available on the company's website[117](index=117&type=chunk) - As of January 31, 2022, **62%** of customers were under multi-year contracts, up from **60%** in 2021 and **56%** in 2020, enhancing subscription revenue predictability[115](index=115&type=chunk) - A majority of annual recurring revenue is up for renewal in the fiscal year ending January 31, 2023[115](index=115&type=chunk) - The COVID-19 pandemic has shifted a large portion of sales and professional services activities to a remote model, with uncertain negative impacts on customer acquisition and retention[120](index=120&type=chunk) [Competition](index=18&type=section&id=Item%201.%20Business%23Competition) Domo faces intense competition from large software vendors and specialized analytics firms, with key factors including user experience, performance, and security - Competitors include large software companies (Microsoft, Oracle, SAP, Salesforce), business analytics firms (Qlik, MicroStrategy, Sisense), and other SaaS providers[121](index=121&type=chunk) - Recent industry consolidation includes Salesforce's acquisition of Tableau and Alphabet's (Google) acquisition of Looker, increasing competitive pressure[220](index=220&type=chunk) - Principal competitive factors include user-centric design, ease of adoption, rapid time to value, performance, security, mobile accessibility, and pricing[122](index=122&type=chunk)[124](index=124&type=chunk) [Research and Development](index=19&type=section&id=Item%201.%20Business%23Research%20and%20Development) Domo heavily invests in R&D to enhance its platform's functionality, reliability, and performance, reflecting a commitment to continuous innovation Research and Development Expense (in millions) | Fiscal Year Ended January 31, | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | | **R&D Expense (in millions)** | $69.2 | $66.5 | $81.0 | - From its inception through January 31, 2022, Domo has invested a total of **$628.7 million** in research and development[59](index=59&type=chunk) [Intellectual Property](index=19&type=section&id=Item%201.%20Business%23Intellectual%20Property) Domo protects its intellectual property through patents, trademarks, copyrights, and trade secrets, holding **119** issued U.S. patents as of January 2022 - As of January 31, 2022, Domo owned **119** issued U.S. patents and **five** pending U.S. patent applications[133](index=133&type=chunk) - The company also held patents in the European Union (**10**), China (**5**), Australia (**1**), Canada (**1**), and Japan (1)[133](index=133&type=chunk) - Domo relies on a mix of trade secret, copyright, trademark, and patent laws, alongside contractual arrangements like confidentiality and non-disclosure agreements, to protect its IP[131](index=131&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) Domo faces risks from economic downturns, persistent net losses, intense competition, data privacy regulations, and intellectual property challenges [Risks Related to Our Financial Position and Capital Needs](index=22&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Related%20to%20Our%20Financial%20Position%20and%20Capital%20Needs) Domo faces financial risks including persistent net losses, an accumulated deficit of **$1.22 billion**, and challenges in raising future capital - The company has a history of losses, with net losses of **$125.7 million**, **$84.6 million**, and **$102.1 million** in fiscal 2020, 2021, and 2022, respectively, and an accumulated deficit of **$1.22 billion**[160](index=160&type=chunk) - The ongoing COVID-19 pandemic and general economic uncertainties could adversely affect customer spending, lengthen sales cycles, and negatively impact operating results[150](index=150&type=chunk)[154](index=154&type=chunk) - The company may need to raise additional capital, which may not be available on favorable terms, if at all As of Jan 31, 2022, cash and cash equivalents were **$83.6 million** with no amounts available under the credit facility[171](index=171&type=chunk)[172](index=172&type=chunk) - The company's ability to use its significant net operating loss (NOL) carryforwards (**$1.18 billion** federal, **$1.33 billion** state) to offset future taxable income may be limited by Section 382 ownership change rules or lack of future profitability[191](index=191&type=chunk) [Risks Related to Our Relationships with Customers and Third Parties](index=28&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Related%20to%20Our%20Relationships%20with%20Customers%20and%20Third%20Parties) Risks include challenges in customer acquisition and retention, reliance on existing customer expansion, and dependency on third-party data centers and networks - Failure to attract new customers cost-effectively or retain existing ones could harm revenue growth A majority of annual recurring revenue is up for renewal in fiscal 2023[192](index=192&type=chunk)[196](index=196&type=chunk) - Growth prospects depend on persuading customers to expand their use of the platform to additional groups, departments, and use cases[199](index=199&type=chunk)[200](index=200&type=chunk) - The business relies on third-party data centers (like AWS) and networks; any outages, interruptions, or performance problems with these providers could adversely affect service delivery and operating results[207](index=207&type=chunk)[208](index=208&type=chunk) - Failure to develop and maintain successful relationships with channel partners, who have historically generated limited revenue, could adversely affect business growth[204](index=204&type=chunk)[205](index=205&type=chunk) [Risks Related to Our Products and Solutions](index=31&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Related%20to%20Our%20Products%20and%20Solutions) Product risks include intense competition, rapid technological change, potential service level failures, and challenges from open-source software usage - The market is intensely competitive, with rivals including large software companies like Microsoft and Salesforce, and specialized analytics firms like Qlik and Sisense[217](index=217&type=chunk)[219](index=219&type=chunk) - Failure to adapt to changing technology, evolving standards, and customer needs could render the platform less competitive[229](index=229&type=chunk) - The use of open-source software could negatively affect the ability to offer the platform and may subject the company to litigation or require making proprietary code public[252](index=252&type=chunk) - If the platform fails to meet service level commitments, the company could be obligated to provide service credits or face subscription terminations, impacting revenue and reputation[241](index=241&type=chunk)[242](index=242&type=chunk) [Risks Related to Privacy and Cybersecurity](index=40&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Related%20to%20Privacy%20and%20Cybersecurity) Significant risks arise from complex data privacy regulations like GDPR and CCPA, potential security breaches, and the invalidation of the EU-U.S Privacy Shield - The company is subject to numerous data privacy laws like GDPR and CCPA, with non-compliance potentially leading to significant fines (e.g., up to **4%** of global annual revenues under GDPR)[287](index=287&type=chunk)[292](index=292&type=chunk) - The invalidation of the EU-U.S Privacy Shield framework by the European Court of Justice creates legal challenges and uncertainty for transferring personal data from the EU to the U.S[293](index=293&type=chunk) - A network or computer system breach could lead to unauthorized access to customer data, damaging the company's reputation, causing customer loss, and incurring significant liabilities[301](index=301&type=chunk) - As a business associate under HIPAA, the company is subject to strict data protection requirements for health information, and non-compliance can lead to significant penalties[298](index=298&type=chunk) [Risks Related to Our Intellectual Property](index=45&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Related%20to%20Our%20Intellectual%20Property) IP risks include brand reputation, third-party infringement claims, challenges in protecting proprietary technology, and indemnity liabilities in contracts - Third-party claims of IP infringement could subject the company to costly litigation, require obtaining expensive licenses, or force a redesign of the platform[324](index=324&type=chunk)[325](index=325&type=chunk) - The company's success depends on its ability to protect its proprietary technology, but its patents may be challenged or invalidated, and protection may be unavailable in some countries[328](index=328&type=chunk)[331](index=331&type=chunk) - Failure to maintain and enhance the Domo brand and reputation, which is critical for attracting and retaining customers, could harm operating results[319](index=319&type=chunk)[320](index=320&type=chunk) - Indemnity provisions in customer agreements expose the company to substantial liability for intellectual property infringement and other losses[326](index=326&type=chunk) [Properties](index=53&type=section&id=Item%202.%20Properties) Domo's headquarters in American Fork, Utah, comprises **122,000** sq ft of leased space, with an additional **152,000** sq ft under construction - The company's headquarters is in American Fork, Utah, with approximately **122,000** square feet of leased space[370](index=370&type=chunk) - An additional **152,000** square feet is under construction and part of a new lease agreement that began on May 1, 2021[370](index=370&type=chunk) [Legal Proceedings](index=53&type=section&id=Item%203.%20Legal%20Proceedings) Domo is involved in a securities class-action lawsuit related to its 2018 IPO and a shareholder derivative lawsuit concerning executive equity awards - A securities class action lawsuit related to the June 2018 IPO was dismissed by the court in April 2021, but the plaintiff filed an appeal which was fully briefed as of January 2022[372](index=372&type=chunk) - A shareholder derivative lawsuit was filed in August 2021 against the former CEO and certain directors, alleging breaches of fiduciary duty over excessive equity awards A motion to dismiss was fully briefed as of February 2022[374](index=374&type=chunk)[375](index=375&type=chunk) - The company is unable to estimate a range of loss for these cases but notes that an unfavorable outcome could be material[373](index=373&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=54&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Domo's Class B common stock trades on Nasdaq under 'DOMO', with no cash dividends paid or intended, and a recent cashless warrant exercise - Class B common stock trades on the Nasdaq Global Market under the symbol "DOMO" since June 29, 2018[380](index=380&type=chunk) - The company has not paid and does not intend to pay cash dividends in the foreseeable future[382](index=382&type=chunk) - On May 25, 2021, **100,000** shares of Class B common stock were issued pursuant to a cashless exercise of warrants[388](index=388&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Domo's FY2022 revenue grew **23%** to **$258.0 million**, with a net loss of **$102.1 million**, driven by customer acquisition and retention efforts [Overview](index=57&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Overview) Domo's subscription-based BI platform saw RPO grow **20%** to **$339.0 million**, but incurred a **$102.1 million** net loss in FY2022 - As of January 31, 2022, **62%** of customers were under multi-year contracts, up from **60%** in the prior year[398](index=398&type=chunk) - Total Remaining Performance Obligations (RPO) as of January 31, 2022, was **$339.0 million**, a **20%** year-over-year increase RPO expected to be recognized in the next twelve months was **$221.7 million**, a **24%** increase[399](index=399&type=chunk) - The company has invested **$628.7 million** in R&D from inception through January 31, 2022[402](index=402&type=chunk) - For fiscal 2022, the company incurred a net loss of **$102.1 million** and had an accumulated deficit of **$1.22 billion**[407](index=407&type=chunk) [Factors Affecting Performance](index=59&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Factors%20Affecting%20Performance) Performance is driven by customer acquisition and expansion, with a **90%** gross retention rate and **110%** ARR net retention in Q4 2022 - The company's gross retention rate improved to **90%** for the 12 months ended January 31, 2022, up from **88%** in the prior year[418](index=418&type=chunk) Annual Recurring Revenue Net Retention Rate | Quarter | Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | | :--- | :--- | :--- | :--- | :--- | | **ARR Net Retention Rate** | 109% | 109% | 108% | 110% | - Sales and marketing expense was **56%** of total revenue for fiscal 2022, flat from fiscal 2021, but down from **74%** in fiscal 2020[426](index=426&type=chunk) - Research and development expense was **31%** of revenue for fiscal 2022, down from **32%** in fiscal 2021 and **40%** in fiscal 2020[428](index=428&type=chunk) [Results of Operations](index=63&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Results%20of%20Operations) In FY2022, total revenue grew **23%** to **$257.96 million**, but operating expenses also rose **23%**, leading to a net loss of **$102.1 million** Consolidated Results of Operations (in thousands) | (in thousands) | FY 2022 | FY 2021 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $257,961 | $210,180 | 23% | | **Gross Profit** | $190,815 | $153,432 | 24% | | **Loss from Operations** | $(88,470) | $(73,085) | 21% | | **Net Loss** | $(102,111) | $(84,634) | 21% | - The increase in subscription revenue was primarily due to a **$25.9 million** increase from new customers and a **$13.5 million** net increase from existing customers[447](index=447&type=chunk) - The increase in sales and marketing expenses was primarily due to a **$20.0 million** increase in employee-related costs, of which **$10.3 million** was from stock-based compensation[453](index=453&type=chunk) - The increase in R&D expenses was primarily due to a **$13.5 million** increase in employee-related costs, of which **$7.4 million** was from stock-based compensation[456](index=456&type=chunk) [Liquidity and Capital Resources](index=66&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Liquidity%20and%20Capital%20Resources) As of January 2022, Domo had **$83.6 million** in cash, with net cash from operations at **$0.4 million**, and a fully drawn **$100 million** credit facility - As of January 31, 2022, the company had **$83.6 million** in cash and cash equivalents[461](index=461&type=chunk) Consolidated Cash Flow Summary (in thousands) | (in thousands) | FY 2022 | FY 2021 | FY 2020 | | :--- | :--- | :--- | :--- | | **Net cash from operating activities** | $379 | $(15,872) | $(80,219) | | **Net cash from investing activities** | $(6,517) | $12,240 | $(23,815) | | **Net cash from financing activities** | $(561) | $13,095 | $7,984 | - The company has a **$100 million** credit facility that was fully drawn as of January 31, 2022 The loan matures on April 1, 2025, and requires compliance with financial covenants, including a maximum debt-to-annualized recurring revenue ratio[461](index=461&type=chunk)[467](index=467&type=chunk)[468](index=468&type=chunk) [Critical Accounting Policies and Estimates](index=69&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Operations%23Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies include Revenue Recognition, Contract Acquisition Costs, Capitalized Internal-Use Software Costs, and Stock-Based Compensation - **Revenue Recognition**: Revenue is recognized when control of services is transferred For contracts with multiple performance obligations (e.g., subscription and professional services), the transaction price is allocated based on relative standalone selling prices[487](index=487&type=chunk)[494](index=494&type=chunk) - **Contract Acquisition Costs**: Incremental costs, primarily sales commissions, are deferred Costs for initial contracts are amortized over a benefit period of approximately four years[495](index=495&type=chunk) - **Capitalized Internal-Use Software Costs**: Certain development costs for the platform are capitalized during the application development stage and amortized over an estimated useful life, generally three years[496](index=496&type=chunk)[497](index=497&type=chunk) - **Stock-Based Compensation**: Expense is recorded based on the grant-date fair value of awards, estimated using the Black-Scholes model for stock options, and recognized over the requisite service period[502](index=502&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=72&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Domo faces market risks primarily from interest rates on its **$100 million** credit facility and foreign currency exchange rates from international operations - The company has interest rate risk associated with its **$100 million** credit facility, which has a floating interest rate component As of Jan 31, 2022, the rate was approximately **7%**[511](index=511&type=chunk) - Foreign currency risk exists due to international operations, with revenue and expenses denominated in currencies such as the Japanese Yen, British Pound, and Australian Dollar[513](index=513&type=chunk) - The company does not currently engage in hedging foreign currency transactions but is considering it for the future[514](index=514&type=chunk) [Financial Statements and Supplementary Data](index=73&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Domo's consolidated financial statements for FY2022 and Ernst & Young LLP's unqualified audit opinions [Report of Independent Registered Public Accounting Firm](index=74&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%23Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued unqualified opinions on Domo's FY2022 financial statements and internal controls, identifying revenue recognition as a critical audit matter - Ernst & Young LLP provided an unqualified opinion on the consolidated financial statements[521](index=521&type=chunk) - The firm also issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of January 31, 2022[534](index=534&type=chunk) - Revenue recognition was identified as a Critical Audit Matter, due to the challenging and subjective judgments involved in determining distinct performance obligations and estimating standalone selling prices[526](index=526&type=chunk)[527](index=527&type=chunk) [Consolidated Financial Statements](index=77&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%23Consolidated%20Financial%20Statements) Domo's FY2022 consolidated financials show **$244.6 million** in assets, a **$126.0 million** stockholders' deficit, and a **$102.1 million** net loss Consolidated Balance Sheet (in thousands) | (in thousands) | As of Jan 31, 2022 | As of Jan 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | $244,589 | $216,438 | | **Total Liabilities** | $370,567 | $299,897 | | **Total Stockholders' Deficit** | $(125,978) | $(83,459) | Consolidated Statements of Operations (in thousands, except per share data) | (in thousands, except per share data) | FY 2022 | FY 2021 | FY 2020 | | :--- | :--- | :--- | :--- | | **Total Revenue** | $257,961 | $210,180 | $173,395 | | **Net Loss** | $(102,111) | $(84,634) | $(125,656) | | **Net Loss Per Share** | $(3.19) | $(2.89) | $(4.57) | [Notes to Consolidated Financial Statements](index=83&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%23Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, including revenue recognition, contract acquisition costs, internal-use software, and the **$100 million** credit facility - The company has a **$100 million** credit facility, fully drawn as of Jan 31, 2022, which matures on April 1, 2025 It carries a floating interest rate (approx **7%**) plus a fixed **2.5%** PIK interest[655](index=655&type=chunk)[657](index=657&type=chunk) - As of Jan 31, 2022, there was **$208.5 million** of unrecognized stock-based compensation expense related to outstanding RSUs, expected to be recognized over a weighted-average period of **3.1 years**[694](index=694&type=chunk) - The company has significant federal (**$1.18 billion**) and state (**$1.33 billion**) Net Operating Loss (NOL) carryforwards, but a full valuation allowance has been recorded against domestic deferred tax assets due to uncertainty of realization[709](index=709&type=chunk)[710](index=710&type=chunk) - Subsequent to year-end, on March 1, 2022, founder Joshua G James stepped down as chairman and CEO[722](index=722&type=chunk) [Controls and Procedures](index=106&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and Ernst & Young LLP concluded that Domo's disclosure controls and internal control over financial reporting were effective as of January 31, 2022 - Management concluded that the company's disclosure controls and procedures were effective as of January 31, 2022[726](index=726&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of January 31, 2022, a conclusion supported by an audit from Ernst & Young LLP[727](index=727&type=chunk)[728](index=728&type=chunk) - There were no changes in internal control over financial reporting during the period that materially affected, or are reasonably likely to materially affect, these controls[729](index=729&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=107&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2022 Proxy Statement - Required information is incorporated by reference from the 2022 Proxy Statement, to be filed within 120 days of the fiscal year-end[735](index=735&type=chunk) - The company has adopted a Code of Business Conduct and Ethics, available on its website[736](index=736&type=chunk) [Executive Compensation](index=107&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the company's 2022 Proxy Statement - Required information is incorporated by reference from the 2022 Proxy Statement[737](index=737&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=107&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information for beneficial owners and management is incorporated by reference from the 2022 Proxy Statement - Required information is incorporated by reference from the 2022 Proxy Statement[738](index=738&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=107&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the company's 2022 Proxy Statement - Required information is incorporated by reference from the 2022 Proxy Statement[739](index=739&type=chunk) [Principal Accountant Fees and Services](index=107&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Principal accountant fees and services information is incorporated by reference from the company's 2022 Proxy Statement - Required information is incorporated by reference from the 2022 Proxy Statement[740](index=740&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=108&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) Financial statements are in Item 8, with schedules omitted, and a list of exhibits provided in the Exhibit Index - The financial statements required by this item are located in Item 8 of the report[743](index=743&type=chunk) - All financial statement schedules have been omitted because the required information is not present or is included elsewhere[743](index=743&type=chunk)

Financial Data and Key Metrics Changes - Domo achieved 30% billings growth in Q4, the highest growth in the last 14 quarters [24][28] - Total revenue for Q4 was $70 million, representing a year-over-year increase of 23%, exceeding the guidance of 18% [29][32] - The net loss for Q4 was $13.6 million, compared to $9.8 million a year ago, with a net loss per share of $0.41 [32][36] Business Line Data and Key Metrics Changes - Subscription revenue growth is expected to be around 25% for FY '23, driven by sustained billings growth [31][36] - Construction revenue grew 19% year-over-year, accounting for 85% of total revenue [30] - International revenue represented 22% of total revenue, down from 24% in the previous quarter due to strong performance in North America [30] Market Data and Key Metrics Changes - Domo's current RPO (Remaining Performance Obligations) of $222 million grew 24% year-over-year, indicating strong future revenue potential [28] - The company reported a gross retention rate of over 90% and a net retention rate of about 105% on a revenue basis [28] Company Strategy and Development Direction - Domo is focusing on digital transformation as a key driver for growth, leveraging data to improve decision-making across organizations [12][14] - The company plans to enhance its go-to-market strategy by verticalizing its sales force to better align with industry-specific needs [44] - Domo aims to continue expanding its customer base while increasing engagement with existing customers through upselling [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the company's strong position in the market and the potential for continued growth [10][12] - The transition in leadership is seen as an opportunity to leverage the management team's strengths to drive future success [39] - The company is committed to maintaining a positive operating cash flow while investing in growth initiatives [34][47] Other Important Information - Domo was named to Glassdoor's Best Companies to Work For list and recognized by Utah Business as a best company to work for for the tenth consecutive year [23] - The company announced leadership changes, promoting Catherine Wong to COO and hiring Mohammed Aaser as Chief Data Officer [20][21] Q&A Session Summary Question: Transition of leadership and its impact - Management acknowledged the transition as an exciting opportunity, emphasizing the strength of the current team and their vision for the future [39] Question: Proof of concept conversion trends - Management noted that high conversion rates from proof of concepts to closed deals have been a trend, particularly with larger enterprise customers [41] Question: Go-to-market strategy adjustments - Management discussed the importance of balancing transactional and large deal activities, with a focus on verticalizing the sales force to better address industry-specific needs [44] Question: Bottom line expectations for FY '23 - Management indicated that the expected lower EPS is primarily due to increased operating expenses related to growth investments, while maintaining a positive outlook on revenue growth [46][47] Question: Product roadmap and R&D investments - Management highlighted the focus on developing data-driven applications that enhance user engagement and drive business outcomes [50][51]