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DOMO Q2 Earnings Beat Estimates, Subscription Revenues Rise

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Domo (DOMO - Free Report) reported second-quarter fiscal 2021 non-GAAP loss of 37 cents per share that beat the Zacks Consensus Estimate by 30.19% and was narrower than the year-ago quarter’s loss of 96 cents.

Revenues of $51.1 million increased 22.7% year over year, primarily driven by customer addition. The figure also beat the consensus mark by 6.08%.

Domo’s revenues for the fiscal second quarter benefited from higher subscription revenues, much similar to its Zacks Internet-Software industry peers like Smartsheet (SMAR - Free Report) , Cloudera (CLDR - Free Report) and Zuora (ZUO - Free Report) .

Notably, Smartsheet’s, Cloudera’s and Zuora’s subscription revenues accounted for 91.7%, 89.4% and 77.7% of their respective second-quarter fiscal 2021 revenues. While Smartsheet’s subscription revenues jumped 43% year over year, Cloudera’s and Zuora’s grew 17% and 15%, respectively.

Domo’s subscription revenues accounted for 86.7% of revenues and totaled $44.3 million, up 27.2% year over year. However, this Zacks Rank #3 (Hold) company’s professional services revenues were unchanged at $6.8 million, representing 13.3% of revenues. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Quarter Details

International revenues represented 24% of total revenues, unchanged sequentially.

Billings increased 22.8% year over year to $47.6 million. The solid growth was driven by contract wins across a number of industries and expansion with the State of Iowa, strong renewal rate, and consistent execution across the business, particularly within enterprise customer base.

Domo, Inc. Price, Consensus and EPS Surprise

 

Domo, Inc. Price, Consensus and EPS Surprise

Domo, Inc. price-consensus-eps-surprise-chart | Domo, Inc. Quote

Renewal rate was well more than 85%, slightly better than the previous-quarter figure. Net retention rate was more than 100%. Further, 60% of Domo’s customers were on the multi-year contracts at the end of the reported quarter.

Remaining performance obligations grew 16% year over year.

In the quarter under review, gross profit rose 26.7% year over year to $30.3 million. Gross margin expanded 740 basis points (bps) to 73.3%.

Notably, non-GAAP subscription gross margin was 69.5% in the reported quarter, up 700 bps.

GAAP sales & marketing expenses decreased by 7.2% year over year to $27.4 million. GAAP research & development expenses also declined 6.6% to $15.9 million. However, GAAP general & administrative expenses increased 3% to $9.6 million.

Total non-GAAP operating expenses decreased by 10.4% year over year to $46 million, reflecting benefits of solid cost management.

Non-GAAP operating loss of $8.2 million was narrower than the year-ago quarter’s loss of $23.7 million.

Balance Sheet & Cash Flow

As of Jul 31, 2020, Domo had cash, cash equivalents and short-term investments of $83 million.

Domo recently extended the maturity of its existing debt with Blackrock to April 2025 from October 2022. As of Jul 31, long-term debt was $103 million.

Moreover, adjusted net cash used in operations was $4.8 million.

Guidance

For third-quarter fiscal 2021, revenues are anticipated between $51.2 million and $52.2 million. Non-GAAP net loss per share is expected between 42 cents and 46 cents.

Billings are expected to total $48.5 million.

Domo expects expenses to increase modestly on a sequential basis. Adjusted net cash used in operation are expected to be approximately $4.5 million.

For fiscal 2021, revenues are anticipated between $202.5 million and $206.5 million. Non-GAAP net loss per share is expected between $1.83 and $1.91.

Billings are expected to be $208 million, up from the previous guidance of $190 million.

Adjusted cash used in operations is expected be around $23 million.

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