Domo 2026 Q3 Earnings Narrowed Losses but Revenue Stumbles

Domo (DOMO) reported fiscal 2026 Q3 earnings on Dec 9, 2025, with revenue declining 0.5% year-over-year to $79.40 million and net losses narrowing by 44.6% to $10.39 million. The company issued softer-than-expected revenue guidance for Q4 and full-year 2026, while CEO Joshua James stepped back from daily duties for health reasons, naming CTO Daren Thayne as interim principal executive.

Revenue

Subscription services led with $71.88 million in revenue, while professional services and other segments contributed an additional $7.52 million. Total revenue of $79.40 million reflected a marginal decline compared to $79.76 million in the prior-year period, signaling ongoing challenges in sustaining growth amid competitive pressures.

Earnings/Net Income

Domo narrowed its net loss to $10.39 million in Q3 2026, a 44.6% improvement from $18.76 million in the same period last year. The EPS loss of $0.25 also showed a 47.9% reduction from $0.48, reflecting cost discipline and operational efficiency gains. However, the company continues to report losses for the ninth consecutive year, underscoring persistent financial challenges.

Price Action

The stock price of Domo declined 0.79% during the latest trading day, with a sharper 20.81% drop during the most recent week and a 29.25% month-to-date decline, reflecting investor skepticism about its near-term outlook.

Post-Earnings Price Action Review

The strategy of buying DOMO when earnings beat and holding for 30 days resulted in a significant loss, returning -75.92% and underperforming the benchmark by 164.22%. With a maximum drawdown of 0.00% and a Sharpe ratio of -0.36, the strategy highlighted a high-risk profile, exacerbating concerns about the stock’s volatility and alignment with earnings performance.

CEO Commentary

Domo’s founder-CEO Joshua James reduced his duties for health reasons, with CTO Daren Thayne appointed as interim principal executive. While the leadership transition introduces short-term uncertainty, the company emphasized progress in AI adoption and consumption-based contracts. James noted, “We remain focused on driving profitability through margin improvements and strategic partnerships,” though cautioned that near-term growth may be constrained by partner sales cycles and market dynamics. The tone of the remarks was cautiously optimistic, balancing operational progress with acknowledgment of structural challenges.

Guidance

Domo issued Q4 2026 revenue guidance of $78.0–$79.0 million and full-year 2026 guidance of $317.5–$318.5 million, both below prior expectations. The company attributed the softer outlook to extended partner sales cycles and the shift toward consumption-based pricing models, which may delay revenue recognition. Forward-looking statements included a commitment to “expand AI integration and ecosystem partnerships to unlock long-term value,” though no specific financial targets were disclosed.

Additional News

Domo’s leadership transition, with CTO Daren Thayne assuming interim principal executive duties, has added a layer of uncertainty to its strategic direction. The move follows founder-CEO Joshua James’ reduced role for health reasons, raising questions about continuity in execution. While the company highlighted progress in AI adoption and margin improvements, the softer revenue guidance and leadership change have tempered investor sentiment. No material M&A activity or dividend/buyback announcements were reported in the three weeks preceding the earnings release.