Domo Reports Slight Revenue Increase and Net Loss in Q3 Fiscal 2024

Domo, Inc. reported its financial results for the third quarter of fiscal 2024, revealing total revenue of $79.8 million, a slight increase from $79.7 million in the same period last year. Subscription revenue remained relatively stable at $71.1 million compared to $71.3 million in the prior year, while professional services revenue rose to $8.7 million from $8.4 million. For the nine months ending October 31, 2024, total revenue was $238.3 million, down from $238.8 million in the previous year. The company continues to face challenges in achieving profitability, posting a net loss of $18.8 million for the quarter, compared to a loss of $16.4 million in the same quarter of the previous year.

The company’s financial performance reflects a strategic shift towards consumption-based pricing, which now accounts for over 55% of its annual recurring revenue (ARR). However, Domo has experienced a decline in enterprise revenue, attributed to macroeconomic conditions that have elongated sales cycles and increased scrutiny during deal negotiations. The company reported a gross retention rate of 84% for the trailing twelve months, down from 87% in the previous year, indicating challenges in customer retention and upselling.

Operationally, Domo's customer base remained stable at over 2,600 customers, with enterprise customers contributing 45% of revenue. The company has been investing in its sales and marketing capabilities to enhance efficiency and align with its new pricing structure. Sales and marketing expenses decreased to 47% of total revenue from 51% year-over-year, reflecting a focus on cost control. Domo's employee headcount has also been adjusted, with a reduction in sales and marketing personnel contributing to lower costs.

Domo's balance sheet as of October 31, 2024, showed total assets of $225.7 million, up from $190.2 million at the end of the previous fiscal year. The company had $40.9 million in cash and cash equivalents, down from $60.9 million at the beginning of the fiscal year. Domo's credit facility, which allows for up to $123 million in borrowings, has been fully drawn, and the company is actively managing its capital structure to support ongoing operations and growth initiatives.

Looking ahead, Domo anticipates continued investment in product development and international expansion, despite the challenges posed by the current economic environment. The company expects to incur losses for the foreseeable future as it navigates the transition to a consumption-based model and seeks to enhance customer engagement and retention. Domo's management remains focused on improving operational efficiency and aligning its sales strategies with evolving market demands.