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Domo Announces Fiscal 2020 Third Quarter Financial Results

December 5, 2019 4:06 PM

SILICON SLOPES, Utah, Dec. 05, 2019 (GLOBE NEWSWIRE) -- Domo, Inc. (Nasdaq: DOMO) today announced results for the fiscal 2020 third quarter ended October 31, 2019.

Fiscal Third Quarter Results

Comments
"I am very pleased with our 24% subscription revenue growth and our execution in Q3, closing several of the largest deals in company history. We provide a differentiated solution that helps customers quickly, easily and securely put data to work at scale," said Josh James, Domo founder and CEO. "In Q3, we were once again able to make meaningful progress on reducing our cash burn, coming in well ahead of our guidance. Consistent with our previous statements, we remain committed to achieving cash flow positive status with the cash on our balance sheet and continue to be optimistic about the opportunity in front of us."

Recent Highlights
We believe the following points and accolades are additional indicators of what’s to come in our business through our commitment to product innovation, go-to-market initiatives and customer success:

Business Outlook
Based on information available as of December 5, 2019, Domo is providing the following guidance for Q4 and full year fiscal 2020:

Q4 Fiscal 2020

Full Year Fiscal 2020

We have not reconciled guidance for non-GAAP metrics to their most directly comparable GAAP measures because such items that impact these measures are not within our control or cannot be reasonably predicted.

Earnings Call Details
Domo plans to host a conference call today to review its fiscal 2020 third quarter financial results and to discuss its financial outlook. The call is scheduled to begin at 3:00 p.m. MT/ 5:00 p.m. ET. A live webcast of the event will be available on the Domo Investor Relations website at https://www.domo.com/ir. A live dial-in is available domestically at (877) 491-5762 and internationally at (763) 416-6939, with conference ID#3483388. A replay will be available via webcast or at (855) 859-2056 or (404) 537-3406 until midnight (ET) December 19, 2019.

About Domo
Domo’s mission is to be the operating system for business, digitally connecting all your people, your data and your systems, empowering them to collaborate better, make better decisions and be more efficient, right from their phones. Domo works with many of the world’s leading and most progressive brands across multiple industries including retail, media and entertainment, manufacturing, finance and more. For more information about Domo (Nasdaq: DOMO), visit www.domo.com. You can also follow Domo on Twitter, Facebook and LinkedIn.

Domo Disclosure Channels to Disseminate Information
Domo investors and others should note that we announce material information to the public about our company, products and services, and other issues through a variety of means, including Domo’s website, press releases, SEC filings, blogs and social media, in order to achieve broad, non-exclusionary distribution of information to the public. We intend to use the Domo Facebook page, the Domo LinkedIn page, the Domo blog, the @Domotalk Twitter account and the @JoshJames Twitter account as a means of disclosing information about the Company and its services and for complying with the disclosure obligations under Regulation FD. The information we post through these social media channels may be deemed material. Accordingly, we encourage investors and others to monitor these social media channels in addition to following our press releases, SEC filings and public conference calls and webcasts. The social media channels that we intend to use as a means of disclosing the information described here may be updated from time to time as listed on our investor relations webpage.

Use of Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), we reference in this press release and the accompanying tables the following non-GAAP financial measures: billings, non-GAAP subscription gross margin, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share and adjusted net cash used in operating activities. In computing these measures, we exclude the effects of certain items including stock-based compensation expense, amortization of certain intangible assets, the reversal of contingent tax-related accruals and proceeds from shares issued in connection with employee stock purchase plan. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses that may not be indicative of our ongoing core business operating results. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and planning, forecasting, and analyzing future periods.

For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Reconciliation of Non-GAAP Financial Measures" included at the end of this release.

Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our future growth, demand for our products and services, our financial outlook for Q4 fiscal quarter and full fiscal year 2020, and results for future periods. Forward-looking statements are subject to risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our filings with the U.S. Securities and Exchange Commission, including, without limitation, the Annual Report on Form 10-K filed with the SEC on April 15, 2019 and the Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2019 expected to be filed with the SEC on or about December 11, 2019. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update this information unless required by law.

Domo is a registered trademark of Domo, Inc.

Contacts:
Domo, Inc.
Media: [email protected]
Investors: [email protected]


Domo, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
2018 2019 2018 2019
Revenue:
Subscription $30,398 $37,841 $85,227 $107,105
Professional services and other 6,446 6,925 17,829 20,119
Total revenue 36,844 44,766 103,056 127,224
Cost of revenue:
Subscription (1) 8,193 9,045 24,514 25,896
Professional services and other (1) 4,734 5,418 12,497 15,582
Total cost of revenue 12,927 14,463 37,011 41,478
Gross profit 23,917 30,303 66,045 85,746
Operating expenses:
Sales and marketing (1) 28,034 29,784 101,692 95,234
Research and development (1) 18,803 17,578 58,786 51,723
General and administrative (1), (2), (3) 7,055 9,590 21,906 26,882
Total operating expenses 53,892 56,952 182,384 173,839
Loss from operations (29,975) (26,649) (116,339) (88,093)
Other expense, net (1) (2,371) (2,368) (7,188) (7,175)
Loss before provision for income taxes (32,346) (29,017) (123,527) (95,268)
Provision for income taxes 199 84 909 529
Net loss $(32,545) $(29,101) $(124,436) $(95,797)
Net loss per share (basic and diluted) $(1.24) $(1.05) $(9.61) $(3.50)
Weighted-average number of shares (basic and diluted) 26,338 27,638 12,954 27,345
(1) Includes stock-based compensation expenses, as follows:
Cost of revenue:
Subscription $74 $151 $144 $341
Professional services and other 34 123 112 276
Sales and marketing 1,441 2,135 5,490 8,184
Research and development 1,630 1,493 5,106 4,852
General and administrative 1,461 1,533 6,056 3,953
Other income, net 14 47 5 142
Total stock-based compensation expenses $4,654 $5,482 $16,913 $17,748
(2) Includes amortization of certain intangible assets, as follows:
General and administrative $20 $20 $60 $60
(3) Includes reversal of contingent tax-related accrual, as follows:
General and administrative $- $- $(3,513) $(1,293)



Domo, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
January 31, October 31,
2019 2019
Assets
Current assets:
Cash and cash equivalents$176,973 $93,511
Short-term investments - 22,426
Accounts receivable, net 48,421 34,051
Contract acquisition costs 10,425 12,156
Prepaid expenses and other current assets 10,935 10,406
Total current assets 246,754 172,550
Property and equipment, net 12,595 12,891
Contract acquisition costs, noncurrent 18,030 16,723
Intangible assets, net 4,415 3,954
Goodwill 9,478 9,478
Other assets 1,360 2,268
Total assets$292,632 $217,864
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable$2,609 $2,900
Accrued expenses and other current liabilities 48,139 42,828
Current portion of deferred revenue 88,959 88,214
Total current liabilities 139,707 133,942
Deferred revenue, noncurrent 4,943 2,751
Other liabilities, noncurrent 6,210 6,266
Long-term debt 97,245 100,086
Total liabilities 248,105 243,045
Commitments and contingencies
Stockholders' equity (deficit):
Common stock 26 28
Additional paid-in capital 956,145 982,239
Accumulated other comprehensive income 438 431
Accumulated deficit (912,082) (1,007,879)
Total stockholders' equity (deficit) 44,527 (25,181)
Total liabilities and stockholders' equity (deficit)$292,632 $217,864



Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
2018 2019 2018 2019
Cash flows from operating activities
Net loss$(32,545) $(29,101) $(124,436) $(95,797)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 2,190 1,691 6,752 5,307
Amortization of contract acquisition costs 2,117 3,008 5,750 8,503
Stock-based compensation 4,654 5,482 16,913 17,748
Other, net 648 819 (1,928) 816
Changes in operating assets and liabilities:
Accounts receivable, net (2,539) (2,915) 5,679 14,370
Contract acquisition costs (3,461) (4,031) (9,243) (9,017)
Prepaid expenses and other assets 646 3,026 (1,747) (362)
Accounts payable (5,188) 862 (6,476) 304
Accrued and other liabilities 849 1,978 (42) (3,876)
Deferred revenue 1,947 (338) 5,113 (2,937)
Net cash used in operating activities (30,682) (19,519) (103,665) (64,941)
Cash flows from investing activities
Purchases of property and equipment (1,468) (1,683) (4,673) (4,860)
Purchases of securities available for sale - (14,387) - (93,331)
Proceeds from maturities of securities available for sale - 28,000 - 71,500
Net cash (used in) provided by investing activities (1,468) 11,930 (4,673) (26,691)
Cash flows from financing activities
Proceeds from initial public offering, net of underwriting discounts and commissions - - 206,627 -
Payments of costs related to initial public offering (650) - (4,063) -
Proceeds from issuance of convertible preferred stock, net of issuance costs - - (87) -
Proceeds from shares issued in connection with employee stock purchase plan - 3,294 - 7,812
Shares repurchased for tax withholdings on vesting of restricted stock - (98) - (1,110)
Debt proceeds, net of issuance costs - - 49,651 -
Proceeds from exercise of stock options 4 70 276 1,501
Principal payments on capital lease obligations - - (44) -
Net cash provided by (used in) financing activities (646) 3,266 252,360 8,203
Effect of exchange rate changes on cash and cash equivalents (7) (105) 5 (33)
Net increase (decrease) in cash and cash equivalents (32,803) (4,428) 144,027 (83,462)
Cash and cash equivalents at beginning of period 238,802 97,939 61,972 176,973
Cash and cash equivalents at end of period$205,999 $93,511 $205,999 $93,511



Domo, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
2018 2019 2018 2019
Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:
Revenue:
Subscription $30,398 $37,841 $85,227 $107,105
Cost of revenue:
Subscription 8,193 9,045 24,514 25,896
Subscription gross profit on a GAAP basis 22,205 28,796 60,713 81,209
Subscription gross margin on a GAAP basis 73% 76% 71% 76%
Stock-based compensation 74 151 144 341
Subscription gross profit on a non-GAAP basis $22,279 $28,947 $60,857 $81,550
Subscription gross margin on a non-GAAP basis 73% 76% 71% 76%
Reconciliation of Total Operating Expenses on a GAAP Basis to Total Operating Expenses on a Non-GAAP Basis:
Total operating expenses on a GAAP basis $53,892 $56,952 $182,384 $173,839
Stock-based compensation (4,532) (5,161) (16,652) (16,989)
Amortization of certain intangible assets (20) (20) (60) (60)
Reversal of contingent tax-related accrual - - 3,513 1,293
Total operating expenses on a non-GAAP basis $49,340 $51,771 $169,185 $158,083
Reconciliation of Operating Loss on a GAAP Basis to Operating Loss on a Non-GAAP Basis:
Operating loss on a GAAP basis $(29,975) $(26,649) $(116,339) $(88,093)
Stock-based compensation 4,640 5,435 16,908 17,606
Amortization of certain intangible assets 20 20 60 60
Reversal of contingent tax-related accrual - - (3,513) (1,293)
Operating loss on a non-GAAP basis $(25,315) $(21,194) $(102,884) $(71,720)
Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis:
Operating margin on a GAAP basis (81)% (60)% (113)% (69)%
Stock-based compensation 12 13 16 14
Amortization of certain intangible assets - - - -
Reversal of contingent tax-related accrual - - (3) (1)
Operating margin on a non-GAAP basis (69)% (47)% (100)% (56)%
Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis:
Net loss on a GAAP basis $(32,545) $(29,101) $(124,436) $(95,797)
Stock-based compensation 4,654 5,482 16,913 17,748
Amortization of certain intangible assets 20 20 60 60
Reversal of contingent tax-related accrual - - (3,513) (1,293)
Net loss on a non-GAAP basis $(27,871) $(23,599) $(110,976) $(79,282)
Reconciliation of Net Loss per Share on a GAAP Basis to Net Loss per Share on a Non-GAAP Basis:
Net loss per share on a GAAP basis $(1.24) $(1.05) $(9.61) $(3.50)
Stock-based compensation 0.18 0.20 1.31 0.65
Amortization of certain intangible assets - - - -
Reversal of contingent tax-related accrual - - (0.27) (0.05)
Net loss per share on a non-GAAP basis $(1.06) $(0.85) $(8.57) $(2.90)
Billings:
Total revenue $36,844 $44,766 $103,056 $127,224
Add:
Deferred revenue (end of period) 72,862 88,214 72,862 88,214
Deferred revenue, noncurrent (end of period) 3,207 2,751 3,207 2,751
Less:
Deferred revenue (beginning of period) (70,693) (87,616) (66,712) (88,959)
Deferred revenue, noncurrent (beginning of period) (3,429) (3,687) (4,244) (4,943)
Increase (decrease) in deferred revenue (current and noncurrent) 1,947 (338) 5,113 (2,937)
Billings $38,791 $44,428 $108,169 $124,287
Reconciliation of Net Cash Used in Operating Activities to Adjusted Net Cash Used in Operating Activities:
Net cash used in operating activities $(30,682) $(19,519) $(103,665) $(64,941)
Proceeds from shares issued in connection with employee stock purchase plan - 3,294 - 7,812
Adjusted net cash used in operating activities $(30,682) $(16,225) $(103,665) $(57,129)





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