Press release·12/09/2025 12:11:12

Financial Performance Overview

Domo, Inc. is a cloud-based business intelligence and data analytics platform provider. In their recent financial report, the company highlighted several key aspects of their financial performance and business outlook.

Domo reported total revenue of $79.4 million for the three months ended October 31, 2025, relatively flat compared to the prior year period. Subscription revenue, which makes up the majority of total revenue, increased 1% year-over-year to $71.9 million. However, professional services and other revenue declined 13% to $7.5 million.

For the nine months ended October 31, 2025, total revenue was $239.2 million, up slightly from $238.3 million in the prior year period. Subscription revenue grew 1% to $216.0 million, while professional services and other revenue decreased 4% to $23.2 million.

Revenue and Profit Trends

Domo’s revenue growth has been modest in recent quarters, with the company citing macroeconomic conditions that have elongated the sales cycle and increased deal scrutiny. This has negatively impacted revenue growth in the near-term.

However, the company has been able to maintain relatively stable gross margins, with total gross margin at 74% for both the three and nine month periods ended October 31, 2025. Subscription gross margin was 80%, while professional services gross margin was 18%.

On the bottom line, Domo reported a net loss of $10.4 million for the three months ended October 31, 2025, an improvement from a $18.8 million net loss in the prior year period. For the nine months ended October 31, 2025, the net loss was $51.4 million, compared to $64.3 million in the prior year period.

The company has continued to invest in sales and marketing, with those expenses representing 43% of revenue in the most recent quarter, down from 47% a year earlier. Research and development expenses were 24% of revenue, down from 27% in the prior year period. General and administrative expenses increased slightly to 16% of revenue.

Strengths and Weaknesses

One of Domo’s key strengths is its transition to a consumption-based pricing model, which now accounts for 80% of the company’s annual recurring revenue (ARR). This model is intended to increase customer adoption and allow Domo to better land, expand, and retain customers over the long term. It also helps align pricing with the value delivered to customers.

Additionally, Domo has a high percentage of customers under multi-year contracts, at 74% of customers on a dollar-weighted basis. This enhances the predictability of the company’s subscription revenue.

However, Domo continues to face headwinds from macroeconomic conditions, which have elongated the sales cycle and made renewals more challenging. The company has seen a slight decrease in total customer count from the prior year period.

Domo also remains unprofitable, with significant net losses in recent quarters, though the losses have narrowed year-over-year. The company will need to carefully manage its operating expenses, particularly in sales and marketing, to improve its path to profitability.

Outlook and Future Prospects

Looking ahead, Domo expects the macroeconomic environment to continue impacting its business in the near-term, potentially negatively affecting revenue growth. In response, the company has taken steps to better align its sales team and focus on controlling costs, which it expects will result in improved margins, sustained positive cash flow, and efficient growth in the long term.

The company believes it is underpenetrated in the overall market and has significant opportunity to expand its customer base over time. Key priorities include continuing to attract new customers, driving upsells and retaining existing customers, and improving sales and marketing efficiency.

Domo also plans to continue investing in research and development to expand the functionality and effectiveness of its platform. This includes investing in areas like machine learning, predictive analytics, and artificial intelligence to enhance the platform’s capabilities.

Overall, Domo faces both near-term headwinds and long-term growth opportunities. The company’s transition to a consumption-based model, high percentage of multi-year contracts, and focus on controlling costs provide some strategic advantages. However, Domo will need to navigate the current macroeconomic challenges while also investing in product development and sales to drive sustainable, profitable growth in the future.

Key Financial Metrics

Revenue

• Total revenue for the three months ended October 31, 2025 was $79.4 million, relatively flat year-over-year.
• Subscription revenue was $71.9 million, up 1% year-over-year.
• Professional services and other revenue was $7.5 million, down 13% year-over-year.

Gross Margin

• Total gross margin was 74% for both the three and nine month periods ended October 31, 2025.
• Subscription gross margin was 80%.
• Professional services gross margin was 17%.

Net Loss

• Net loss for the three months ended October 31, 2025 was $10.4 million, an improvement from $18.8 million in the prior year period.
• Net loss for the nine months ended October 31, 2025 was $51.4 million, compared to $64.3 million in the prior year period.

Operating Expenses

• Sales and marketing expenses were 43% of revenue in Q3 2025, down from 47% in the prior year period.
• Research and development expenses were 24% of revenue, down from 27% in the prior year period.
• General and administrative expenses were 16% of revenue, up slightly from 15% in the prior year period.

Other Metrics

• 80% of annual recurring revenue (ARR) was from consumption-based agreements as of the end of the most recent quarter.
• 74% of customers were under multi-year contracts on a dollar-weighted basis.
• Remaining performance obligations (RPO) totaled $428.6 million as of October 31, 2025.
• Gross retention rate was 84% as of October 31, 2025.

Conclusion

Domo faces a mix of near-term challenges and long-term growth opportunities. While revenue growth has been modest, the company’s transition to a consumption-based model, high percentage of multi-year contracts, and focus on controlling costs provide some strategic advantages.

However, Domo must navigate the current macroeconomic headwinds impacting its business, while also investing in product development and sales to drive sustainable, profitable growth. The company’s ability to attract new customers, retain and expand existing relationships, and improve sales and marketing efficiency will be critical to its future success.

Overall, Domo appears to be taking the right steps to position itself for long-term growth, but must execute effectively to overcome the near-term obstacles and deliver value to shareholders.