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Domo (DOMO) Q1 Loss Narrows, Revenues Up on Customer Wins

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Domo (DOMO - Free Report) reported first-quarter fiscal 2020 non-GAAP loss of $1.08 per share, narrower than the year-ago quarter’s loss of $28.48 and the Zacks Consensus Estimate of a loss of $1.28.

Revenues of $40.8 million increased 27.7% on a year-over-year basis, primarily driven by customer additions. The figure was in line with the consensus mark.

International accounted for 26% of revenues, up from 24% in fourth-quarter fiscal 2019.

Subscription revenues (84.3% of total revenues) were $34.4 million, up 29% year over year. Professional services and other revenues (15.7% of total revenues) increased 21.3% year over year to $6.4 million.

Billings increased 21.8% to $41.1 million. Dollar-based net revenue retention rate was more than 100%.

Domo stated that 45% of customers were on multiyear contracts at the end of first-quarter fiscal 2020 compared with 35% at the end of the year-ago quarter.
 

Domo, Inc. Price, Consensus and EPS Surprise

Domo, Inc. Price, Consensus and EPS Surprise

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

 

The company now has 458 enterprise customers, up 19% year over year. Enterprise revenues grew 33% from the year-ago quarter.

Domo’s customer base exceeded 1,800 at the end of the quarter.

Operating Details

In first-quarter fiscal 2020, gross profit rallied 37.4% year over year to $28 million. Gross margin expanded 480 basis points (bps) to 68.6%.

Notably, subscription gross margin was 77% in the reported quarter compared with 69.8% in the year-ago quarter.

GAAP sales & marketing (S&M) expenses decreased 9.3% year over year to $36 million. While GAAP research & development (R&D) expenses declined 10.3% to $17.1 million, GAAP general & administrative (G&A) expenses surged 72.6% year over year to $8 million.

Non-GAAP operating loss of $26.8 million was narrower than the year-ago quarter’s loss of $44.4 million.

Balance Sheet & Cash Flow

Domo exited first-quarter fiscal 2020 with cash, cash equivalents and short-term investments of $154 million.

Adjusted cash used in operations was $22.2 million, up $5.5 million sequentially. However, the metric was down 40% year over year.

Guidance

For second-quarter fiscal 2020, revenues are anticipated between $41 million and $42 million. Non-GAAP net loss is expected between 98 cents and $1.02 per share.

Billings are expected to be $42 million. Domo expects operating expenses to decline in the second quarter.

For fiscal 2020, revenues are still anticipated between $173 million and $174 million. Non-GAAP net loss is expected between $3.79 and $3.87 per share, narrower than the previous guidance of a loss of $3.99-$4.07.

Zacks Rank & Stocks to Consider

Currently, Domo has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same sector include eGain Corp. (EGAN - Free Report) , j2 Global and Alteryx . While eGain and j2 Global sport a Zacks Rank #1 (Strong Buy), Alteryx has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for eGain, j2 Global and Alteryx is set at 30%, 8% and 13.7%, respectively.

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