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DOMO Beats on Q3 Earnings, Subscription Revenues Increase Y/Y

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Domo (DOMO - Free Report) reported third-quarter fiscal 2021 non-GAAP loss of 40 cents per share that beat the Zacks Consensus Estimate by 9.1% and was narrower than the year-ago quarter’s loss of 85 cents.

Revenues of $53.6 million increased 19.8% year over year, primarily driven by customer addition. The figure also beat the consensus mark by 5%.

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

Notably, Anaplan’s, Cloudera’s and Zuora’s subscription revenues accounted for 91.4%, 90.6% and 77.7% of their respective third-quarter fiscal 2021 revenues. While Anaplan’s subscription revenues jumped 31.4% year over year, Cloudera’s and Zuora’s grew 18% and 15% respectively.
 

Domo, Inc. Price, Consensus and EPS Surprise

 

Domo, Inc. Price, Consensus and EPS Surprise

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

Domo’s subscription revenues contributed 87.4% of revenues and totaled $46.9 million, up 24% year over year. However, this Zacks Rank #3 (Hold) company’s professional services revenues declined 2.7% to $6.7 million, representing 12.6% 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 25.3% year over year to $55.7 million. The solid growth was driven by strong new customer count growth, upsells and expansions, and high retention rates.

Moreover, 59% of Domo’s customers were on the multi-year contracts at the end of the reported quarter. Remaining performance obligations grew 21% year over year to $248.8 million.

In the quarter under review, gross profit rose 29.3% year over year to $39.2 million. Gross margin expanded 530 basis points (bps) to 73%.

Notably, non-GAAP subscription gross margin was 70.7% in the reported quarter, up 600 bps.

GAAP sales & marketing expenses decreased by 0.6% year over year to $29.6 million. GAAP research & development expenses also declined 6.1% to $16.5 million. However, GAAP general & administrative expenses increased 24.4% to $9.6 million.

Total non-GAAP operating expenses decreased 6.2% year over year to $48.6 million, reflecting benefits of solid cost management.

Non-GAAP operating loss of $8.7 million was narrower than the year-ago quarter’s loss of $21.2 million.

Balance Sheet & Cash Flow

As of Oct 31, 2020, Domo had cash, cash equivalents and short-term investments of $83.8 million compared with $83 million as of Jul 31, 2020.

Moreover, adjusted net cash flow from operations was $1.4 million against net cash used in operations of $4.8 million in the previous quarter and $19.5 million in the year-ago quarter.

Guidance

For fourth-quarter fiscal 2021, revenues are anticipated between $53.3 million and $54.3 million. Non-GAAP net loss per share is expected between 42 cents and 46 cents.

Billings are expected to total $72 million.

Domo expects expenses to increase modestly on a sequential basis. Adjusted net cash flow from operations is expected to be approximately $1.5 million.

For fiscal 2021, revenues are now anticipated between $206.6 million and $207.6 million (up from the previous guidance of $202.5-$206.5 million). Non-GAAP net loss per share is expected between $1.83 and $1.87.

Billings are expected to be $222 million, up from the previous guidance of $208 million.

Adjusted cash used in operations is expected be around $11 million.

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