Domo(US:DOMO)2023-06-08 16:00Financial Performance - Total revenue for the three months ended April 30, 2023, was $79.5 million, reflecting a year-over-year increase of 7% from $74.5 million in the same period of 2022[161] - Total revenue rose by $5.0 million (7%) from $74.5 million in Q2 2022 to $79.5 million in Q2 2023[193] - Gross profit increased by $4.1 million (7%) from $56.8 million in Q2 2022 to $60.9 million in Q2 2023, with gross margin improving from 76% to 77%[195] - Net loss narrowed from $32.9 million in Q2 2022 to $24.4 million in Q2 2023, representing a reduction of $8.5 million[189] Revenue Expectations - The company expects revenue growth rate to decline in the near term due to macroeconomic conditions affecting the software sales cycle[162] - The amount of RPO expected to be recognized as revenue in the next twelve months increased to $237.5 million, a 6% year-over-year growth from $225.0 million in 2022[160] Customer Metrics - The company had over 2,500 customers as of April 30, 2023, with enterprise customers accounting for 47% of revenue, down from 49% in 2022[167] - Gross retention rate decreased to 88% for the 12 months ended April 30, 2023, down from 93% in the previous year[171] - Subscription revenue increased by $6.5 million (10%) from $64.6 million in Q2 2022 to $71.1 million in Q2 2023, driven by a 7% increase in customer count[193] Expenses - Sales and marketing expense as a percentage of total revenue was 54% for the three months ended April 30, 2023, compared to 61% in the same period of 2022[174] - Research and development expense as a percentage of total revenue decreased to 29% for the three months ended April 30, 2023, from 31% in 2022[176] - Total operating expenses decreased by $4.8 million (6%) from $85.4 million in Q2 2022 to $80.6 million in Q2 2023, with sales and marketing expenses down by $2.4 million (5%)[198] Cash and Debt - Cash, cash equivalents, and restricted cash totaled $66.0 million as of April 30, 2023, with $3.7 million classified as restricted cash[203] - The company has a $100 million credit facility, fully drawn as of April 30, 2023[203] - The company incurred total debt of $109.8 million as of April 30, 2023, with an interest rate of approximately 10.7%[227][228] - The credit facility allows for up to $100 million in term loan borrowings, all of which had been drawn as of April 30, 2023[209] Cash Flow - Net cash provided by operating activities for the three months ended April 30, 2023 was $828,000, compared to $781,000 for the same period in 2022, reflecting an increase[212] - Cash collected from customers during the three months ended April 30, 2023 was $93.6 million, exceeding cash outflows of $92.8 million[215] - Net cash used in investing activities for the three months ended April 30, 2023 was $3.6 million, compared to $1.9 million for the same period in 2022[212] Other Financial Metrics - Remaining performance obligations (RPO) as of April 30, 2023, were $356.7 million, representing a year-over-year growth of 1% from $351.5 million in 2022[160] - Other expense, net increased by $430,000 (11%) due to a rise in interest expense, which is expected to continue increasing modestly[201] - The provision for income taxes increased by $11,000 (6%) from $188,000 in Q2 2022 to $199,000 in Q2 2023[202] - Significant cash outflows for the three months ended April 30, 2023 included $53.8 million for personnel costs and $18.0 million for marketing programs[215] Financial Covenants - The company is required to maintain a minimum balance of unrestricted cash and cash equivalents equal to $10.0 million until adjusted cash flow is greater than zero[208] - The maximum debt ratio financial covenant is set at 0.500, measured quarterly based on annualized recurring revenue[210] International Operations - 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[230]