Domo Reports First Non-GAAP Profit, Emphasizing Consumption-Based Model Transformation and Rising Net Revenue Retention

Domo reported Q2 2026 earnings with $79.7mln in GAAP revenue, $70.3mln in billings, and a first positive non-GAAP EPS ($0.02). The company emphasized its transformation to a consumption-based model, rapidly expanding cloud data warehouse partnerships, and rising net revenue retention, particularly among new consumption customers at 108%. Domo's annual recurring revenue mix reached over 75% consumption-based contracts, with a total ARR net retention rate over 94%.

Title: Domo's Q2 2026 Earnings: A Shift to Consumption-Based Model

Domo (NASDAQ: DOMO) reported its Q2 2026 earnings on August 28, 2025, delivering $79.7 million in GAAP revenue, $70.3 million in billings, and a first positive non-GAAP EPS of $0.02. The company highlighted its transformation to a consumption-based model, which has significantly driven its growth.

Domo's annual recurring revenue (ARR) mix reached over 75% consumption-based contracts, up from just a few percentage points two years ago. This shift has been accompanied by a rise in net revenue retention (NRR), particularly among new consumption customers, which reached 108%. The company's total ARR net retention rate also increased to over 94%, marking the fourth consecutive sequential increase.

The company's CEO, Josh James, attributed the turnaround to the successful implementation of the consumption-based model. He noted that two years ago, the company had zero cloud data warehouse (CDW) partners and negligible consumption-based ARR. Today, Domo has five major CDW partners and over 75% of its ARR is from consumption contracts.

The shift to consumption-based contracts has also led to improved sales productivity and annual contract value (ACV) momentum. New ACV growth has accelerated every quarter, with a double-digit decline in Q3 fiscal year 2025 followed by growth approaching 20% in Q2 fiscal year 2026. Salesforce productivity growth accelerated from 19% in Q3 fiscal year 2025 to 67% in Q2 fiscal year 2026, while subscription RPO growth increased from 3% to 19% over the same period.

Domo's ecosystem strategy has been a key driver of its growth. The company has integrated with five leading CDWs, enhanced technical integrations with Snowflake, Databricks, Oracle, and Google, and is now present in hyperscaler marketplaces. This has enabled streamlined procurement and created joint selling opportunities. New logos and large upsells increasingly originate through partner referrals.

The fiscal second quarter marked Domo’s first-ever positive non-GAAP earnings per share ($0.02) and positive adjusted free cash flow ($1.4 million). Operating margin reached a record 7.7%, and subscription gross margin improved to 81.9%. Current subscription RPO grew 4% year-over-year to $220.2 million, and total subscription RPO reached a new high of $409.8 million, up 19% year-over-year.

Looking ahead, management guided to billings of $75.5 million to $76.5 million for the fiscal third quarter, GAAP revenue of $78.5 million to $79.5 million, and a non-GAAP net loss per share of $0.03 to $0.07. For fiscal 2026, Domo raised guidance to billings of $317 million to $321 million, GAAP revenue of $316 million to $320 million, and non-GAAP net loss per share of $0.11 to $0.19. Management now targets year-end fiscal 2026 billings growth and non-GAAP operating margin of 6% each, up from 5%, and reiterated the goal to reach 10% for both metrics by fiscal year-end 2027.

References
[1] https://www.nasdaq.com/articles/domo-reports-first-nongaap-profit
[2] https://www.ainvest.com/news/domo-strategic-transformation-high-conviction-buy-ai-driven-data-analytics-2508/