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Domo Announces Second Quarter Fiscal 2021 Financial Results

September 3, 2020 4:05 PM

SILICON SLOPES, Utah--(BUSINESS WIRE)-- Domo, Inc. (Nasdaq: DOMO) today announced results for the fiscal 2021 second quarter ended July 31, 2020.

Fiscal Second Quarter Results

"Domo was built for this new world of work where business agility is imperative to surviving and thriving," said Josh James, founder and CEO, Domo. "Since our IPO, we have been relentlessly focused on growing our business, while at the same time making our growth more efficient and driving to cash flow positive with the cash on our balance sheet. In Q2, we once again made great progress on this front as we help CIOs, CDOs and IT leaders solve some of their most complex and strategic data challenges at a speed and scale our customers have told us they've never seen."

Recent Highlights

We believe the following points and accolades from the last quarter 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 September 3, 2020, Domo is providing the following guidance for Q3 and full year fiscal 2021:

Q3 Fiscal 2021

Full Year Fiscal 2021

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 2021 second 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#2499486. A replay will be available via webcast or at (855) 859-2056 or (404) 537-3406 until midnight (ET) September 17, 2020.

About Domo

Domo is the Business Cloud, empowering organizations of all sizes with BI leverage at cloud scale in record time. With Domo, BI-critical processes that took weeks, months or more can now be done on-the-fly, in minutes or seconds, at unbelievable scale. For more information about how Domo (Nasdaq: DOMO) helps its customers go fast, go big and go bold, 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 Q3 fiscal quarter and full fiscal year 2021, 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 10, 2020 and the Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2020 expected to be filed with the SEC on or about September 9, 2020, as well as risks to our business related to the COVID-19 outbreak. 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, Domo Business Cloud and Domo is the Business Cloud are registered trademarks of Domo, Inc.

Domo, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
July 31, July 31,

2019

2020

2019

2020

Revenue:
Subscription

$

34,873

$

44,347

$

69,264

$

86,783

Professional services and other

6,787

6,784

13,194

12,909

Total revenue

41,660

51,131

82,458

99,692

Cost of revenue:
Subscription (1)

8,816

8,811

16,851

17,916

Professional services and other (1)

5,395

4,838

10,164

9,842

Total cost of revenue

14,211

13,649

27,015

27,758

Gross profit

27,449

37,482

55,443

71,934

Operating expenses:
Sales and marketing (1)

29,501

27,384

65,450

56,480

Research and development (1)

17,046

15,917

34,145

33,370

General and administrative (1), (2), (3)

9,275

9,557

17,292

19,426

Total operating expenses

55,822

52,858

116,887

109,276

Loss from operations

(28,373

)

(15,376

)

(61,444

)

(37,342

)

Other expense, net (1)

(2,482

)

(2,417

)

(4,807

)

(5,141

)

Loss before provision for income taxes

(30,855

)

(17,793

)

(66,251

)

(42,483

)

Provision for income taxes

305

110

445

315

Net loss

$

(31,160

)

$

(17,903

)

$

(66,696

)

$

(42,798

)

Net loss per share (basic and diluted)

$

(1.14

)

$

(0.62

)

$

(2.45

)

$

(1.49

)

Weighted-average number of shares (basic and diluted)

27,418

29,001

27,196

28,728

(1) Includes stock-based compensation expenses, as follows:
Cost of revenue:
Subscription

$

67

$

147

$

190

$

373

Professional services and other

60

118

153

221

Sales and marketing

2,041

2,543

6,049

4,369

Research and development

1,294

2,002

3,359

3,879

General and administrative

1,182

2,323

2,420

4,720

Other expense, net

47

48

95

95

Total stock-based compensation expenses

$

4,691

$

7,181

$

12,266

$

13,657

(2) Includes amortization of certain intangible assets, as follows:
General and administrative

$

20

$

20

$

40

$

40

(3) Includes reversal of contingent tax-related accrual, as follows:
General and administrative

$

-

$

-

$

(1,293

)

$

-

Domo, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
January 31, July 31,

2020

2020

Assets
Current assets:
Cash and cash equivalents

$

80,843

$

78,455

Short-term investments

17,967

4,899

Accounts receivable, net

47,967

34,933

Contract acquisition costs

12,676

12,872

Prepaid expenses and other current assets

12,809

9,756

Total current assets

172,262

140,915

Property and equipment, net

12,816

14,051

Right-of-use assets

-

10,214

Contract acquisition costs, noncurrent

17,083

16,008

Intangible assets, net

3,865

3,663

Goodwill

9,478

9,478

Other assets

1,234

806

Total assets

$

216,738

$

195,135

Liabilities and stockholders' deficit
Current liabilities:
Accounts payable

$

2,298

$

1,774

Accrued expenses and other current liabilities

46,473

41,105

Lease liabilities

-

4,076

Current portion of deferred revenue

105,290

101,982

Total current liabilities

154,061

148,937

Lease liabilities, noncurrent

-

7,159

Deferred revenue, noncurrent

4,454

2,248

Other liabilities, noncurrent

6,329

6,584

Long-term debt

101,074

103,075

Total liabilities

265,918

268,003

Commitments and contingencies
Stockholders' deficit:
Common stock

28

29

Additional paid-in capital

988,141

1,007,022

Accumulated other comprehensive income

389

617

Accumulated deficit

(1,037,738)

(1,080,536)

Total stockholders' deficit

(49,180)

(72,868)

Total liabilities and stockholders' deficit

$

216,738

$

195,135

Domo, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
July 31, July 31,

2019

2020

2019

2020

Cash flows from operating activities
Net loss

$

(31,160

)

$

(17,903

)

$

(66,696

)

$

(42,798

)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization

1,852

1,071

3,616

2,364

Non-cash lease expense

-

1,002

-

1,953

Amortization of contract acquisition costs

2,817

3,512

5,495

6,920

Stock-based compensation

4,691

7,181

12,266

13,657

Other, net

656

943

(3

)

1,822

Changes in operating assets and liabilities:
Accounts receivable, net

5,071

(5,289

)

17,285

13,034

Contract acquisition costs

(2,924

)

(3,966

)

(4,986

)

(5,892

)

Prepaid expenses and other assets

1,105

3,352

(3,388

)

3,565

Accounts payable

(1,109

)

(639

)

(558

)

(594

)

Operating lease liabilities

-

(663

)

-

(1,568

)

Accrued and other liabilities

3,123

10,098

(5,854

)

(4,653

)

Deferred revenue

(2,866

)

(3,490

)

(2,599

)

(5,514

)

Net cash used in operating activities

(18,744

)

(4,791

)

(45,422

)

(17,704

)

Cash flows from investing activities
Purchases of property and equipment

(1,703

)

(1,791

)

(3,177

)

(3,154

)

Purchases of securities available for sale

(15,936

)

-

(78,944

)

(11,149

)

Proceeds from maturities of securities available for sale

43,500

7,700

43,500

24,300

Purchases of intangible assets

-

(1

)

-

(105

)

Net cash provided by (used in) investing activities

25,861

5,908

(38,621

)

9,892

Cash flows from financing activities
Proceeds from shares issued in connection with employee stock purchase plan

-

(10

)

4,518

3,649

Shares repurchased for tax withholdings on vesting of restricted stock

(112

)

(485

)

(1,012

)

(523

)

Proceeds from exercise of stock options

93

2,048

1,431

2,059

Net cash (used in) provided by financing activities

(19

)

1,553

4,937

5,185

Effect of exchange rate changes on cash and cash equivalents

78

242

72

239

Net increase (decrease) in cash and cash equivalents

7,176

2,912

(79,034

)

(2,388

)

Cash and cash equivalents at beginning of period

90,763

75,543

176,973

80,843

Cash and cash equivalents at end of period

$

97,939

$

78,455

$

97,939

$

78,455

Domo, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
July 31, July 31,

2019

2020

2019

2020

Reconciliation of Subscription Gross Margin on a GAAP Basis to Subscription Gross Margin on a Non-GAAP Basis:
Revenue:
Subscription

$

34,873

$

44,347

$

69,264

$

86,783

Cost of revenue:
Subscription

8,816

8,811

16,851

17,916

Subscription gross profit on a GAAP basis

26,057

35,536

52,413

68,867

Subscription gross margin on a GAAP basis

75

%

80

%

76

%

79

%

Stock-based compensation

67

147

190

373

Subscription gross profit on a non-GAAP basis

$

26,124

$

35,683

$

52,603

$

69,240

Subscription gross margin on a non-GAAP basis

75

%

80

%

76

%

80

%

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

$

55,822

$

52,858

$

116,887

$

109,276

Stock-based compensation

(4,517

)

(6,868

)

(11,828

)

(12,968

)

Amortization of certain intangible assets

(20

)

(20

)

(40

)

(40

)

Reversal of contingent tax-related accrual

-

-

1,293

-

Total operating expenses on a non-GAAP basis

$

51,285

$

45,970

$

106,312

$

96,268

Reconciliation of Operating Loss on a GAAP Basis to Operating Loss on a Non-GAAP Basis:
Operating loss on a GAAP basis

$

(28,373

)

$

(15,376

)

$

(61,444

)

$

(37,342

)

Stock-based compensation

4,644

7,133

12,171

13,562

Amortization of certain intangible assets

20

20

40

40

Reversal of contingent tax-related accrual

-

-

(1,293

)

-

Operating loss on a non-GAAP basis

$

(23,709

)

$

(8,223

)

$

(50,526

)

$

(23,740

)

Reconciliation of Operating Margin on a GAAP Basis to Operating Margin on a Non-GAAP Basis:
Operating margin on a GAAP basis

(68

)%

(30

)%

(75

)%

(37

)%

Stock-based compensation

11

14

16

13

Amortization of certain intangible assets

-

-

-

-

Reversal of contingent tax-related accrual

-

-

(2

)

-

Operating margin on a non-GAAP basis

(57

)%

(16

)%

(61

)%

(24

)%

Reconciliation of Net Loss on a GAAP Basis to Net Loss on a Non-GAAP Basis:
Net loss on a GAAP basis

$

(31,160

)

$

(17,903

)

$

(66,696

)

$

(42,798

)

Stock-based compensation

4,691

7,181

12,266

13,657

Amortization of certain intangible assets

20

20

40

40

Reversal of contingent tax-related accrual

-

-

(1,293

)

-

Net loss on a non-GAAP basis

$

(26,449

)

$

(10,702

)

$

(55,683

)

$

(29,101

)

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

$

(1.14

)

$

(0.62

)

$

(2.45

)

$

(1.49

)

Stock-based compensation

0.18

0.25

0.45

0.48

Amortization of certain intangible assets

-

-

-

-

Reversal of contingent tax-related accrual

-

-

(0.05

)

-

Net loss per share on a non-GAAP basis

$

(0.96

)

$

(0.37

)

$

(2.05

)

$

(1.01

)

Billings:
Total revenue

$

41,660

$

51,131

$

82,458

$

99,692

Add:
Deferred revenue (end of period)

87,616

101,982

87,616

101,982

Deferred revenue, noncurrent (end of period)

3,687

2,248

3,687

2,248

Less:
Deferred revenue (beginning of period)

(89,219

)

(104,804

)

(88,959

)

(105,290

)

Deferred revenue, noncurrent (beginning of period)

(4,950

)

(2,916

)

(4,943

)

(4,454

)

Decrease in deferred revenue (current and noncurrent)

(2,866

)

(3,490

)

(2,599

)

(5,514

)

Billings

$

38,794

$

47,641

$

79,859

$

94,178

Reconciliation of Net Cash Used in Operating Activities to Adjusted Net Cash Used in Operating Activities:
Net cash used in operating activities

$

(18,744

)

$

(4,791

)

$

(45,422

)

$

(17,704

)

Proceeds from shares issued in connection with employee stock purchase plan

-

(10

)

4,518

3,649

Adjusted net cash used in operating activities

$

(18,744

)

$

(4,801

)

$

(40,904

)

$

(14,055

)

Media –

Julie Kehoe

[email protected]

Investors –

Peter Lowry

[email protected]

Source: Domo, Inc.

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