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]

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 April 30, 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 Sp ...

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)

Domo, Inc. (NASDAQ:DOMO) Q4 2022 Earnings Conference Call March 1, 2022 5:00 PM ET Company Participants Peter Lowry - Vice President of Investor Relations Julie Kehoe - Chief Communications Officer Josh James - Chief Executive Officer John Mellor - Chief Strategy Officer Bruce Felt - Chief Financial Officer Conference Call Participants Sanjit Singh - Morgan Stanley Derrick Wood - Cowen Kamil Mielczarek - William Blair Operator Welcome to Domo's Fourth Quarter Fiscal Year 2022 and Year End Earnings Conferenc ...

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 October 31, 2021 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 ...

Domo, Inc. (NASDAQ:DOMO) Q3 2022 Earnings Conference Call December 2, 2021 5:00 PM ET Company Participants Peter Lowry - VP, IR Julie Kehoe - Head of Corporate Communications Josh James - CEO Bruce Felt - CFO Conference Call Participants Sanjit Singh - Morgan Stanley Derrick Wood - Cowen and Company Jack Andrews - Needham & Company Kamil Mielczarek - William Blair Pat Walravens - JMP Operator Welcome to Domo's third quarter fiscal year 2022 earnings call. All lines have been placed on mute to prevent any ba ...