Domo's (DOMO) Q3 Earnings Break Even, Revenues Increase Y/Y
Domo DOMO reported third-quarter fiscal 2024 non-GAAP earnings of break-even, beating the Zacks Consensus Estimate of a loss of 12 cents. The company reported a loss of 13 cents in the year-ago quarter.
Revenues inched up 0.8% year over year to $79.7 million and surpassed the consensus mark by 0.85%.
In the reported quarter, Domo’s revenues benefited from a 1% increase in billings. The top line benefited from solid contributions from the Subscriptions segment.
Domo’s shares have fallen 28.4% year to date compared with the Zacks Internet Software industry’s rally of 57.7%. The Zacks Computer and Technology sector has risen by 45.8%.
Domo, Inc. Price, Consensus and EPS Surprise
Domo, Inc. price-consensus-eps-surprise-chart | Domo, Inc. Quote
Top-Line Details
Domo’s subscription revenues increased 3.3% year over year to $71.3 million in the reported quarter. The subscription revenues contributed 89.5% to total revenues.
Professional Services and other revenues contributed 10.5% of the total revenues. The figure was $8.4 million, down 16.1% year over year.
In the third quarter, Domo delivered billings of $74.8 million, up 1% year over year. The addition of new customers and an increase in spending by existing customers resulted in an 85% gross retention rate, which was 90% in the previous quarter.
Operating Details
In the first quarter, non-GAAP operating expenses dropped 8.3% year over year and contributed 90.5% to revenues.
Research & development expenses, as a percentage of revenues, fell 630 basis points (bps) on a year-over-year basis to 24.8%.
General & administrative expenses, as a percentage of revenues, were 15.2%, down 130 bps year over year.
Sales and marketing expenses, as a percentage of revenues, contracted 140 bps year over year to 50.5%.
Operating margin expanded 540 bps on a year-over-year basis to 6.3%.
Balance Sheet & Cash Flow
As of Oct 31, 2023, Domo had cash, cash equivalents and restricted cash of $57.4 million compared with $71.1 million as of Oct 31, 2022.
Operating cash flow was $4.3 million in the third quarter of fiscal 2024 compared with $0.6 million in the previous quarter.
Revenue Performance Obligation (RPO) as of Oct 31, 2023, increased 4% year over year to $367.2 million.
Guidance
For the third quarter of 2024, Domo expects revenues between $79 million and $80 million.
Non-GAAP net loss is expected in the range of 5 cents to 9 cents per share.
For the fiscal 2024, Domo expects revenues between $317.8 million and $318.8 million.
Non-GAAP net loss is expected between 24 cents and 28 cents per share.
Zacks Rank & Stocks to Consider
Domo currently carries a Zacks Rank #3 (Hold).
Science Applications International SAIC, Adobe ADBE, and Broadcam AVGO are some better-ranked stocks that investors from the broader Zacks Computer & Technology sector can consider. Science Applications International, Broadcam, and Adobe Sport Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Science Applications International shares have declined 5.8% year to date. Science Applications International is set to report its third-quarter fiscal 2024 results on Dec 4.
Adobe’s shares have returned 81.5% year to date. Adobe is set to report its fourth-quarter fiscal 2023 results on Dec 13.
Broadcam shares have surged 52.7% year to date. AVGO is set to report its fourth-quarter fiscal 2024 results on Dec 7.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Adobe Inc. (ADBE) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
Science Applications International Corporation (SAIC) : Free Stock Analysis Report
Domo, Inc. (DOMO) : Free Stock Analysis Report