Domo(US:DOMO)2022-08-25 23:25Financial 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]