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Domo (DOMO) 5 Dec 24 2025 Q3 Earnings call transcript

Daily EarningsFriday, Dec 6, 2024 4:09 am ET

1min read

CR -- DOMO --

In Domo's Q3 Fiscal Year 2025 earnings call, CEO Josh James and CFO Tod Crane outlined the company's financial performance and strategic initiatives, highlighting their confidence in Domo's future prospects. The call provided insights into Domo's growth trajectory, key strategic priorities, and the impact of AI on the business.

Financial Performance and Growth

Domo reported a solid Q3 performance, exceeding its billings, revenue, and non-GAAP EPS guidance. The company saw a 3% year-over-year increase in subscription RPO and a 14% year-over-year growth in subscription RPO beyond 12 months. This momentum is particularly significant, as it underscores the strength of Domo's relationships with its customers, who are increasingly committing to long-term partnerships with the company.

Strategic Priorities

Domo's strategic priorities, including ecosystem-led growth, consumption pricing, and AI, were discussed at length during the call. The company's focus on ecosystem-led growth is yielding results, with partner-sourced contributions to billings increasing by over 20% from Q2 and a significant uptick in partner-sourced new logos. This shift towards ecosystem partnerships reflects Domo's recognition of the value of collaborating with other businesses to create synergies and drive growth.

Impact of AI

Domo's investment in AI is starting to bear fruit, with the company seeing a surge in demand for its AI solutions. Customers are recognizing the value of Domo's AI capabilities, which are helping them gain insights, automate processes, and make data-driven decisions more effectively. This trend is expected to continue, as businesses increasingly seek to harness the power of AI to drive efficiencies and unlock new opportunities.

Looking Ahead

Domo's leadership expressed optimism about the company's future, with a focus on optimizing for the long-term rather than short-term gains. The company's strategic investments in AI, consumption pricing, and ecosystem partnerships position it well for continued growth and success in the evolving data and analytics landscape.

Financial Outlook

On the financial front, Domo reported a slight increase in total revenue for Q3, with subscription revenue accounting for 89% of the total. The company's subscription gross margin stabilized around 82.4%, with expectations for it to increase to the mid-80s in the long-term. Despite a negative adjusted free cash flow in Q3, Domo remains optimistic about generating positive cash flow in Q4 and beyond, with a substantial foundation of close to $300 million in annual recurring revenue to build upon.

In conclusion, Domo's Q3 earnings call provided a comprehensive overview of the company's financial performance and strategic direction. The company's focus on ecosystem-led growth, consumption pricing, and AI, as well as its strong customer relationships and financial foundation, position it well for continued success in the data and analytics industry.

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