Domo(US:DOMO)2025-03-06 23:02Financial Data and Key Metrics Changes - In Q4, the company exceeded guidance for billings, revenue, non-GAAP EPS, and adjusted free cash flow, with total revenue reaching $78.8 million, of which subscription revenue accounted for 91% [29] - Q4 billings were $102.6 million, and subscription RPO grew to $403.6 million, up 14% year over year, marking the best subscription RPO growth in over two years [30] - Adjusted free cash flow was $6 million in Q4, the highest in the company's history, with cash balance increasing from $40.9 million in Q3 to $45.3 million in Q4 [32][42] Business Line Data and Key Metrics Changes - Subscription RPO beyond twelve months grew 38% year over year, indicating a significant improvement in long-term contracts [30] - Gross retention was 85% in Q4, maintaining this level for three consecutive quarters, with expectations for at least a two percentage point improvement in FY '26 [31] Market Data and Key Metrics Changes - The consumption model has seen significant adoption, with consumption customers achieving gross retention of over 90% and net retention of over 100% [31] - The company has transitioned from 5% of ARR on the consumption model two years ago to over 65% by the end of FY '25, with expectations to approach 90% by the end of FY '26 [10] Company Strategy and Development Direction - The primary growth initiatives for FY '25 included building out the partner network, adding AI innovations, and shifting customers to consumption pricing [11] - The company is focusing on enhancing partnerships with cloud-based data warehouses (CDWs) and system integrators (SIs) to drive growth and improve customer satisfaction [12][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the current macroeconomic environment has led to more organized and well-thought-out purchasing decisions from customers, with no significant recent changes observed [37][38] - The company is optimistic about future growth, expecting to generate positive cash flow in both Q1 and FY '26, while also aiming for improved growth and profitability [35][36] Other Important Information - Domo's AI capabilities have been recognized with several industry awards, highlighting the platform's strength in data analytics and visualization [20][25] - The company is hosting its annual user conference, Domopalooza, on March 21, which will feature new product announcements and customer success stories [26] Q&A Session Summary Question: Can you comment on the macro environment and its effect on customer willingness to purchase? - Management indicated that purchasing decisions are well-organized and backed by metrics, with no recent significant changes in customer behavior [37][38] Question: Can you explain the dynamic between renewals and consumption, and the impact on cash and debt? - The CFO explained that the shift in renewal timing due to consumption conversions resulted in a $5 million shift out of Q1 into other quarters, and expressed satisfaction with the cash flow results and balance sheet [40][42] Question: How are partnerships with Snowflake and Databricks tracking? - Management reported significant progress in partnerships, with ecosystem leads converting at a much higher rate compared to independently generated leads, indicating a positive trend for future growth [49][50] Question: Are there plans for additional tweaks to the go-to-market strategy? - The company plans to continue focusing on the ecosystem and hiring individuals with experience in CDWs, emphasizing customer satisfaction and ROI [58][60] Question: Has recent M&A activity in the data cloud space increased discussions about potential acquisitions? - Management acknowledged openness to M&A opportunities, emphasizing the importance of relationships with multiple CDWs and the value Domo provides as an independent provider [78][81]