GICS Sector : Technology
Domo, Inc.operates a cloud-based business intelligence platform in the United States, Japan, and internationally.Its platform digitally connects from the chief executive officer to the frontline employee with the people, data, and systems in an organization, giving them access to real-time data and insights, and allowing them to manage business from smartphones.
Domo, Inc.'s Q3 Fiscal Year 2026 earnings report showcased a significant improvement in the company's financial performance, with positive adjusted free cash flow of $2.1 million, a $15.8 million improvement over last year. The company achieved an operating margin of 6.8%, exceeding guidance, and posted positive EPS for the second consecutive quarter, with non-GAAP diluted net income per share at $0.01, beating estimates of -$0.05. Billings came in at $73.2 million, and total subscription RPO grew 15% to $405.9 million. Gross retention was 85%, and ARR net retention was 95%, up sequentially for the fifth straight quarter.
Publication Date: Dec -07
The company is making significant progress in executing its key objectives, including deepening its partner ecosystem, accelerating consumption, and pushing AI boundaries. Over 350 accounts are actively using Cloud Amplifier, with unique users soaring 450% year over year. The company has seen a substantial shift to consumption pricing, with 80% of annual recurring revenue on consumption contracts, up from single digits two years ago. This shift is driving growth and improving customer retention.
Domo is experiencing strong adoption of AI features, with unique accounts using AI features increasing over 60% year over year. The company is building an agentic platform, with a next-generation version available in Q1. This focus on AI is expected to drive growth and improve customer delivery. Customer wins in the quarter included new logo deals and expansions with major companies, demonstrating the company's ability to attract and retain customers.
With a P/S Ratio of 1.12 and an EV/EBITDA of -9.95, the market is pricing in a certain level of growth and profitability. Analysts estimate next year's revenue growth at 0.5%. Given the company's progress in achieving positive adjusted free cash flow and its focus on balancing growth and profitability, it is well-positioned to meet its guidepost for 10% growth and 10% margin. The expected improvement in gross retention to 90% next year, driven by multiyear contracts and other initiatives, further supports this outlook.
The company is leveraging AI to empower resources and increase efficiency, which is expected to help manage expenses. While areas of investment may see a run rate higher than in FY '26, the company is focused on balancing growth and profitability. The rule of 40 framework is guiding this balance, ensuring that the company prioritizes both growth and profitability.
Crude Oil Moves Higher; Domo Shares Plunge
Dec -05
Domo, Argan, Hewlett Packard Enterprise And Other Big Stocks Moving Lower In Friday's Pre-Market Session
Dec -05
Domo, Inc. (DOMO) Q3 2026 Earnings Call Transcript
Dec -05
Domo Announces Third Quarter Fiscal 2026 Financial Results
Dec -04
Domo's AI and Data Products Platform Recognized With CRN 2025 Products of the Year Award
Dec -01
Domo Joins Snowflake and Industry Leaders to Support the Open Semantic Interchange to Advance AI and Data Interoperability
Nov -25
Connor Clark & Lunn Investment Management Ltd. Has $449,000 Stock Holdings in Domo, Inc. $DOMO
Nov -21
Domo and Formula 1 Driver Alex Albon Join Forces to Showcase the Power of Data and How it Helps Drive Performance
Nov -20
Domo's subscription growth of 12.03% is driven by increasing adoption of cloud-based business intelligence solutions, expansion into new industries, and growing demand for data-driven decision making. Additionally, Domo's platform enhancements, strategic partnerships, and effective sales execution also contribute to this growth.
Domo's Professional Services and Other segment growth of 11.43% is driven by increasing adoption of its cloud-based platform, expansion of existing customer relationships, and growth in demand for digital transformation services. Additionally, strategic partnerships and investments in emerging technologies such as AI and machine learning are contributing to the segment's growth.
A cloud-based platform that integrates with hundreds of data sources to provide real-time insights and analytics.
A low-code platform that enables users to build custom business applications without extensive coding knowledge.
A platform that connects and analyzes data from IoT devices, sensors, and equipment to provide real-time insights.
Pre-built, customizable apps that provide real-time insights and analytics for customer-facing teams.
A data integration platform that connects and integrates data from multiple sources.
A data governance platform that provides data quality, security, and compliance features.
Domo's cloud-based platform and proprietary technology make it difficult for substitutes to emerge, but the presence of open-source alternatives and custom-built solutions pose some threat.
Domo's customers are largely enterprise-level organizations with limited bargaining power, and the company's subscription-based model reduces the risk of customer concentration.
Domo's technology-driven business model reduces its reliance on suppliers, and the company's scale and market position give it bargaining power over its suppliers.
The cloud-based business intelligence and analytics market is highly competitive, and new entrants with innovative technologies and business models can easily disrupt the market.
The business intelligence and analytics market is highly competitive, with established players like Tableau, Power BI, and Qlik, and new entrants vying for market share.
| Value | |
|---|---|
| Debt Weight | -336.15% |
| Debt Cost | 3.95% |
| Equity Weight | 436.15% |
| Equity Cost | 15.71% |
| WACC | 55.24% |
| Leverage | -77.07% |
Value: 9.2
Growth: 4.9
Quality: 5.1
Yield: 0.0
Momentum: 9.5
Volatility: 2.0
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Value: 7.7
Growth: 4.2
Quality: 5.7
Yield: 0.0
Momentum: 9.0
Volatility: 3.0
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Value: 4.0
Growth: 6.2
Quality: 6.3
Yield: 0.0
Momentum: 9.0
Volatility: 3.3
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Value: 2.4
Growth: 6.4
Quality: 7.2
Yield: 0.0
Momentum: 8.0
Volatility: 4.3
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Value: 4.8
Growth: 5.4
Quality: 4.5
Yield: 0.0
Momentum: 6.5
Volatility: 3.7
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Value: 9.0
Growth: 2.8
Quality: 4.8
Yield: 0.0
Momentum: 0.5
Volatility: 1.0
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