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Domo (DOMO)
NASDAQ:DOMO
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Domo
(NASDAQ:DOMO)
52Neutral
Positive Factors
Customer Spending
67% of the surveyed customers plan to increase their spending on Domo over the next 12-18 months.
Product Innovation
The newly announced Agent Catalyst offering is designed to help developers create AI agents more efficiently, receiving over 200 customer requests in the first hour.
Profitability
Improved Non-GAAP EBIT profitability was a bright spot this quarter, with Non-GAAP EBIT margin improving to 4.1%.
Negative Factors
Professional Services Revenue
Total revenue was dragged down substantially by professional services, which declined 16.5% year-over-year.
Retention Concerns
Retention numbers below 90% have been concerning, with current retention at 85%.
Revenue Growth
Revenue growth outlook remains unchanged at -1% in FY26, and there is a wait to see current initiatives move key KPIs higher.
Domo (DOMO) vs. S&P 500 (SPY)
Market Cap
$311.30M
Dividend YieldN/A
Average Volume (3M)349.03K
Price to Earnings (P/E)―
Beta (1Y)1.79
Revenue Growth-0.61%
EPS Growth-1.61%
CountryUS
Employees958
SectorTechnology
Sector Strength44
IndustrySoftware - Application
Share Statistics
EPS (TTM)-2.13
Shares Outstanding35,843,918
10 Day Avg. Volume351,546
30 Day Avg. Volume349,034
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.02
Price to Cash Flow (P/CF)-5.90
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.25Price Target Upside28.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Domo Business Overview & Revenue Model
Company DescriptionDomo, Inc. is a cloud-based platform company headquartered in American Fork, Utah. It operates in the business intelligence and data visualization sector, offering a comprehensive suite of tools designed to enable businesses to harness the power of their data. Domo's platform provides real-time data access and analytics, facilitating better decision-making across organizations by connecting directly to a wide range of data sources and presenting information in an easily digestible format. The company serves various industries, including retail, media, finance, and healthcare, among others.
How the Company Makes MoneyDomo makes money primarily through the sale of subscriptions to its cloud-based platform, which is offered as a software-as-a-service (SaaS) model. Customers pay recurring fees for access to the platform, which includes various tiers and levels of service depending on their specific needs and the scale of their operations. The company also generates revenue from professional services, such as consulting and training, which help clients effectively implement and utilize the platform. Additionally, partnerships with other technology providers and systems integrators play a role in expanding Domo's market reach and providing integrated solutions to its customers.
Domo Financial Statement Overview
Summary
Domo faces significant financial hurdles, with ongoing net losses and a precarious balance sheet marked by negative equity and high leverage. While revenue growth has slowed, the company struggles to translate this into profitability. Cash flow challenges persist, with negative operating and free cash flows worsening the financial outlook. These factors collectively suggest a need for strategic improvements to enhance financial stability and performance.Income Statement
Domo's revenue has shown moderate growth, with a recent TTM revenue of $317M compared to $319M the previous year, indicating a slight decline. The gross profit margin remains relatively stable, but the company continues to operate at a net loss, with a net profit margin of -25.8%. This consistent loss position underscores challenges in achieving profitability despite revenue growth.45
Neutral
Balance Sheet
The balance sheet reveals structural weaknesses, with significant negative stockholders' equity of -$177M, indicating high leverage. The debt-to-equity ratio is not meaningful due to negative equity, highlighting financial instability. Additionally, the company's total liabilities exceed total assets, further emphasizing balance sheet vulnerability.30
Negative
Cash Flow
The cash flow situation is concerning, with negative operating and free cash flows indicating ongoing cash burn. The free cash flow to net income ratio is negative, which reflects the company's inability to generate positive cash flow relative to its reported losses. The operating cash flow to net income ratio also mirrors this trend, emphasizing cash management challenges.40
Negative
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 317.04M | 318.99M | 308.64M | 257.96M | 210.18M | 173.40M |
| Gross Profit | |||||
| 231.75M | 243.52M | 235.57M | 190.81M | 153.43M | 117.47M |
| EBIT | |||||
| -59.28M | -54.88M | -88.87M | -88.47M | -73.08M | -115.27M |
| EBITDA | |||||
| -52.16M | -48.26M | -88.87M | -78.97M | -73.08M | -108.35M |
| Net Income Common Stockholders | |||||
| -81.94M | -75.57M | -105.55M | -102.11M | -84.63M | -125.66M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 45.26M | 57.24M | 66.50M | 83.56M | 90.79M | 98.81M |
| Total Assets | |||||
| 214.34M | 225.66M | 242.12M | 244.59M | 216.44M | 216.74M |
| Total Debt | |||||
| 131.09M | 129.48M | 128.78M | 124.18M | 104.97M | 101.07M |
| Net Debt | |||||
| 85.83M | 72.24M | 62.28M | 40.62M | 14.18M | 20.23M |
| Total Liabilities | |||||
| 391.59M | 379.21M | 388.52M | 370.57M | 299.90M | 265.92M |
| Stockholders Equity | |||||
| -177.25M | -153.55M | -146.40M | -125.98M | -83.46M | -49.18M |
| Cash Flow | Free Cash Flow | ||||
| -18.50M | -9.18M | -18.89M | -6.14M | -21.68M | -86.75M |
| Operating Cash Flow | |||||
| -9.05M | 2.58M | -10.89M | 379.00K | -15.87M | -80.22M |
| Investing Cash Flow | |||||
| -9.45M | -11.76M | -8.00M | -6.52M | 12.24M | -23.82M |
| Financing Cash Flow | |||||
| 3.39M | 3.47M | 2.42M | -561.00K | 13.10M | 7.98M |
Domo Technical Analysis
Negative
7.96
Price Trends
8.21
Negative
8.15
Negative
7.85
Positive
Market Momentum
0.09
Positive
45.35
Neutral
33.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DOMO, the sentiment is Negative. The current price of 7.96 is below the 20-day moving average (MA) of 8.21, below the 50-day MA of 8.21, and above the 200-day MA of 7.85, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 45.35 is Neutral, neither overbought nor oversold. The STOCH value of 33.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DOMO.
Domo Risk Analysis
Domo disclosed 59 risk factors in its most recent earnings report. Domo reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Domo Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.82T | 30.51 | 34.29% | 0.83% | 15.04% | 12.38% | |
76 Outperform | $201.35B | 453.99 | 10.90% | ― | 28.79% | 112.38% | |
75 Outperform | $259.44B | 42.43 | 10.26% | 0.59% | 8.72% | 51.47% | |
72 Outperform | $165.30B | 116.62 | 16.53% | ― | 22.44% | -18.31% | |
59 Neutral | $57.11B | ― | -32.59% | ― | 23.19% | 11.01% | |
58 Neutral | $21.03B | 10.58 | -16.29% | 2.47% | 4.38% | -23.63% | |
52 Neutral | $311.30M | ― | 48.46% | ― | -0.61% | -1.61% |
* Technology Sector Average
Performance Comparison
DOMO
Domo
7.96
-1.25
-13.57%
MSFT
Microsoft
378.80
-42.55
-10.10%
CRM
Salesforce
269.97
-31.00
-10.30%
NOW
ServiceNow
797.76
29.39
3.82%
TEAM
Atlassian
217.99
24.62
12.73%
PLTR
Palantir Technologies
85.85
62.99
275.55%
Domo Earnings Call Summary
Earnings Call Date: Mar 6, 2025 | % Change Since: 12.91% | Next Earnings Date: May 22, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with significant achievements in transitioning to a consumption model, strong growth in subscription RPO, and strategic partnerships and AI capabilities. While there are challenges in the software spending environment and reduced margins, the company's focus on efficient growth and cash generation is promising.Highlights
Exceeded Guidance and Positive Free Cash Flow
Domo exceeded guidance for billings, revenue, non-GAAP EPS, and adjusted free cash flow. They reported positive adjusted free cash flow for Q4 and expect this trend to continue in Q1 and fiscal year 2026.
Subscription RPO Growth
Subscription RPO growth accelerated to 14% year over year, with long-term subscription RPO growth accelerating to 38% year over year. RPO was over the $400 million mark for the first time.
Transition to Consumption Model
Domo's transition to a consumption model has seen significant progress, with 65% of ARR now on the consumption model, up from 5% two years ago. They aim for 90% by the end of fiscal year 2026.
AI and Partner Ecosystem Strategy
Domo's focus on AI and developing partnerships, particularly with cloud-based data warehouses, has led to new strategic deals and industry recognition. Their AI capabilities have won industry awards and are seen as a growth driver.
Improved Retention Rates
Gross retention improved to 85% for the third consecutive quarter. The consumption model customers had gross retention of over 90% and net retention of over 100%.
Lowlights
Challenges in Software Spending Environment
The software spending environment remains challenging, although there is some willingness to invest in AI enablement.
Reduced Subscription Gross Margin
Subscription gross margin was 81.4%, down sequentially due to the timing of capitalized software amortization, with expectations to remain in the low eighties in the near term.
Net Loss and Earnings Guidance
Non-GAAP net loss was $1.8 million, with a non-GAAP net loss per share of $0.05. Guidance for fiscal year 2026 includes a non-GAAP net loss per share of $0.29 to $0.39.
Company Guidance
During the fourth quarter earnings call for fiscal year 2025, Domo's executives highlighted that the company exceeded guidance on several key financial metrics, including billings at $102.6 million, total revenue at $78.8 million, non-GAAP EPS, and adjusted free cash flow, which was reported at $6 million, marking the highest in the company's history. Subscription revenue made up 91% of the total revenue, and the subscription RPO grew by 14% year-over-year, reaching $403.6 million, with a long-term subscription RPO growth of 38%. The company also emphasized a shift to a consumption model, which now accounts for over 65% of ARR compared to 5% two years prior, and this model has shown a net retention rate of over 100%. Gross retention was 85% for the third consecutive quarter, and Domo expects an improvement of at least two percentage points in fiscal year 2026. The strategic focus on partnerships with cloud-based data warehouses (CDWs) and artificial intelligence (AI) innovations were noted as drivers for future growth, with significant traction observed in their partner ecosystem, particularly with CDWs like Snowflake and Databricks. Looking ahead, Domo provided guidance for fiscal year 2026 with expected billings of $310 to $320 million, GAAP revenue of $310 to $318 million, and a non-GAAP net loss per share of $0.29 to $0.39, while anticipating positive cash flow both in Q1 and throughout the fiscal year.Domo Corporate Events
Executive/Board Changes
Domo Appoints Mark Maughan as Chief Operating Officer
Neutral
Mar 17, 2025
On March 14, 2025, Domo, Inc. appointed Mark Maughan as the chief operating officer. Mr. Maughan has been with Domo since 2015, holding various leadership roles, and his appointment reflects his extensive experience within the company. His new role comes with an increased annual base salary of $345,000 and potential for a discretionary cash bonus. This strategic appointment is expected to enhance Domo’s operational leadership, although specific implications for stakeholders were not detailed in the announcement.
Executive/Board ChangesShareholder Meetings
Domo Announces New Director Appointments and Resignation
Neutral
Mar 11, 2025
On March 6 and 7, 2025, Domo, Inc. elected Ryan Wright and David Jolley as directors, with terms expiring at the 2025 annual meeting of stockholders. Jolley resigned as an employee on March 7, 2025, and both will participate in the company’s outside director compensation policy. This move, approved by stockholders holding a majority of the company’s stock, was communicated to stockholders on March 11, 2025, as part of a written consent action under Delaware law.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.