Domo(US:DOMO)2024-08-30 01:29Financial Data and Key Metrics Changes - In Q2, total revenue was $78.4 million, representing a year-over-year decrease of 2% [24] - Subscription revenue accounted for 90% of total revenue and was flat year-over-year [24] - Q2 billings were $68.6 million, slightly below guidance due to a large customer opting for quarterly billing [24][25] - Gross retention improved to 88%, up from 83% in Q1, while net retention was 90% year-over-year [25] - Non-GAAP operating margin was 2.5%, with a non-GAAP net loss of $2.7 million compared to $0.8 million a year ago [27] - Adjusted free cash flow was negative $5.6 million, resulting in a cash balance of $55.7 million [27] Business Line Data and Key Metrics Changes - The consumption cohort showed gross retention of 98% and net retention of 118%, indicating strong performance compared to the overall business [25] - Over 45% of annual recurring revenue (ARR) is now on consumption contracts, with expectations to exceed 50% by year-end [14] Market Data and Key Metrics Changes - Current remaining performance obligations (RPO) were $225.4 million, with total RPO increasing to $358.9 million year-over-year [26] - The average contract duration for deals closed in Q2 was up more than 10% year-over-year [26] Company Strategy and Development Direction - The company is focusing on a shift to consumption-based pricing to drive expansion and customer retention [14][15] - Strategic partnerships with cloud data warehouses (CDWs) are being emphasized to enhance customer engagement and market positioning [7][11] - The company aims to leverage its partnerships to create joint solutions and drive consumption across customer bases [11][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities stemming from ecosystem partnerships, although financial results may take 12 to 24 months to reflect this [13][29] - The company is confident in its strategic direction and believes it is better positioned to capitalize on market opportunities [6][29] Other Important Information - The CFO, David Jolley, will transition to a senior advisory role due to health issues, with Todd Crane taking over as CFO [20][21] - The company successfully refinanced its debt, extending maturity to August 2028 and reducing interest rates [26][44] Q&A Session Summary Question: Insights on strategic conversations with customers - Management noted that partnerships with CDWs have improved relationships with CIOs, allowing for more strategic discussions about data strategies [33][34] Question: Timeframe for deal closure from the partner pipeline - Management indicated that while they are eager to see an uptick in billings, they need more data before providing specific timelines [38] Question: Efficiency in sales and marketing expenses - Management attributed the drop in sales and marketing expenses to headcount changes and natural attrition, expecting a more efficient sales process moving forward [40][41] Question: Details on the refinancing terms - The company extended the loan maturity and reduced the cash interest rate, providing improved financial flexibility [44] Question: Partnerships with CDWs - Management confirmed active partnerships with Snowflake, Databricks, Google, Oracle, and IBM, all of which are live in various capacities [45][46] Question: Competitive dynamics with CDWs - Management acknowledged the cooperative nature of relationships with CDWs, emphasizing the complementary roles in delivering customer solutions [50][51]