Domo(DOMO)2022-12-08 16:00Revenue 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].