DOMO - Earnings call transcript Q3 2019

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Operator

Good day, ladies and gentlemen. And welcome to the Domo’s Third Quarter Fiscal Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this call will be recorded. to host like Ms. today's now would introduce for your conference I Kehoe, Communications begin. of Vice Public Julie President may and Domo’s Relations, you

Julie Kehoe

Welcome everyone.

and On James, our we today, CEO; Founder CFO. the Felt, and have Bruce call our Josh

operations release and statements differ press applications, made such market is uncertainties other with of to and may on and and for actual at the where including with this posted commission, our risks, the file the being registration customer will is forward-looking cause website and results information this to Form IR statement call on the those release XX-Q statements. call assumptions. forth the statements we was SEC that from regarding S-X risk be filed our press simultaneously and These Our documents results, are after uncertainties on filed www.domo.com/ir assumptions risks, securities close demand, Please was exchange our issued in financial other on to the webcast. refer matters. include may Statements set and Form subject materially that factors that and

XXXX amortization substitute to isolation excludes our addition should guidance intangible or today's compensation, discuss as measures, considered measures year we measures operations These measures, liability. and fourth data, GAAP non-GAAP are on non-GAAP we not results. a stock-based addition, revenue, the which a we supplemental be call, including full Unless basis. of the and contingent non-GAAP reversal useful discussing financial as non-GAAP otherwise from performance. results of In in believe These for Domo's stated, during be will will and quarter assets other of than for of in

website in Eastern to until additional disclosures me our December release earnings Josh. Josh? Time press Relations a XX, results XXXX. this call be on our it regarding including let available webcast midnight With You also GAAP will over page of can the these of Investor where that, replay with and measures, comparable reconciliations non-GAAP find on hand

Josh James

execution, cash good and billings, show, results for you of to want is into back per fully strong a clear for well and members will points. profitability, very to that demand fiscal in loss team we're point, towards targets progress and our And with Domo's Two, Thank IPO. good Julie, continue to multi-billion as On for intend expect making premise QX. opportunity market executed effort I operating the One, On exceeded us. net call hard that takeaway of remain extremely want the report second share my and as financial products to large the services funded, revenue, and hello QX everyone. It’s we earnings QX to thank our and flow first work you, we've that three in for QX their we our we strong and flow products performed our we I to been call, we significant make since in making continue all team today’s solid quarter you and and pleased as all public execution Domo on enormous I'm XXXX our well. cash demand be front XXXX. grow company. again and a of business our QX very dollar three, have into very

marketing improvement billing We’ve while decrease in and increase and with subscription and revenue billings year-over-year significant revenue. revenue XX% by demonstrating XX% This achieved quarter, talked XX% in growth of our year-over-year a in we growth that marketing saw model levels, and XX%, we particularly leveraging about a led I'm sales in sales productivity, pleased year-over-year and these expense.

performance sales was the particularly As QX and strong EMEA. performance across business our also implies, the enterprise in board, strong U.S. with healthy growth in billings our

business to its while this of positive quarters our as guided Oracle in been QX. Mercado and As Jim And sales has have leadership one American solid our this improvement Kawasaki and top new as rev seeing new also enterprise performance, GM North our have our CRO, and an to ACV multi-year productivity mentioned deals. enterprise, into us of North carryover momentum we [ph] Dean new quarter, very in ASPs well of growth last instrumental ever, American seen from Germeyer, SAP joined logo

include the Our great consumer Henkel brand such as new customers [ph]. European goods giant

also enterprises existing the customers one push signed and largest their and as embrace a into CapComm. BBDA, expand industries These around include continue world's products brands, telecom and business energy leader also business. companies of XX digital the such the to We Fortune customers transformation of in multi-national our across signed saw We as deeper the well-known Domo DENSO numerous processes. globe use

products, people and Domo to use in total Gartner digitally departmental evidence billion machine that second it feedback in unavailable employees connecting the addition remains purchasing, $X end-users direct becoming particularly up entire for to frontline away second layer, the and data, our extremely Peer for platform enterprise number products. demand XXX named that and across I a of platform. this is more customers to audience CIOs see in We of My is an a from quarter scalable of XX AI, transforms layer. end and has business. leverage During our year. proud to call our experienced strong were learning integration than of data Domo to Insights And using implementing that based them. a you that a systems in last we as the from row and want who platform of to our science is quarter, ways and take Customers' IT customers the from the usage revenue a third platform, We're ratings on team engaged for massively previously as as point year be Choice XXX, more leaders customers bringing this added that data enables are have to CEOs from and growing our and a

custom to areas aspect their We can understand much in as retail is in The real-time in very to store be that timely and seen drive feedback areas them which managers of Global ROI AI used quickly custom performing related phones. efficiency training. example, forward among investments at business, The the customer, data staffing a Domopalooza. manner store of managers business. operational area, also substantial XXXX a have built business. are matter We in demand or we a on reinforces key platform, it of application developed of applications looking with announcements enables they the a are this empowers excited Domo that delivered science how more for making a to improve for their have metrics and store continuing data identify helps the our about cases across breadth potential such division weeks and huge adjustments are Because client our every of opportunities to across the and and base the against

enabling make Summit Web its data and Performance is been a been only With Chief review In BI what's last run see ROI once example, changes media all example, to due to we’re For on and data is a process, used shared year. in it’s being its year digital Global manufacturer in Domo productivity performance combine investments in working of marketing working is how typically Officer, at systems. dealer what to constraints to to real dealerships month, of real change dollars. time its determine relevant with global the Domo with where a dealer L’Oreal, sources marketing to Domo, team major to the time to impact central team during in a to the view another European able decisions end current auto measure the make is local spend. a the system market of XXX to allow and landscape provide degree of Lisbon

the better world's operational custom enables world's build systems bringing skills from XX,XXX, rich And the leverage a personnel, store infrastructure. Domo pool XX,XXX worldwide XXX XX,XXX resources automotive directly more final to it than than Thirdly, together most largest apps its our is of complex our of example, the more athletic experience. to for application platform human store quickly as customer to inside of Domo for ecosystem in of a internal valuable parts looks it’s its improve than data on one mentioned across competition the employees manufacturers management brands, enable group to is customers and our to gamification for top transform of and one XXX,XXX its more using talent companies. personnel I

Our purposes. thousands apps customers have business upon with custom thousands, deployed

our same one-off business the and started solving customer entire application take base. them Sometimes productize and we customers what see for problems as will

collection this off example, product real launched a competitive past we For in through of time challenge of It’s quarter applications Domo suite. performance. store built highly management the and business the a results improving industry common of retail

is in very call see in around Building that out, turn understand we using most our and All hoped a to heavily helping and are intact. any they and set we the how we business. look any over some numerous digital upside I them a Bruce, fully at to us put of front was platform are an we and thought want us are modern it is a lastly, originally took digitally where point, ambitious wherever how for road to size that could this scale in the is the vision on is I a we opportunity invested and across and we that are to last connected their to much important journey a and Domo was still technology address customers we how platform which of a before business started departments our are create organizations in out When excited playing organization goal in of expanding Now context as to my exists of we Domo down transformation organizations challenges industry build big in the on funded Yes, rules empower as R&D. journey. and impossible.

said initial and said capital be we public a it know I disciplined offering, cash date. everything and very anything positive be we when it to it about necessary we now that All-in-all plan. I specific strong know get when funded when to we meant we our it And by commitments. over our will knows this want plan. to that And without During what was we the the of so positive flow or money again I fully that's quarter business there means will raising date, means the on get get enough fully but have and date will This in Not then now. it all flow and cash to to very I everyone were extra clear internally delivery I what over by clear and and bank. cash do means a and we we do path fund And the repeat in our with our hit another state. raising and to performance I

While our in growing we our while customers and be in north see efficiency are expect our star, momentum areas business. increasing will top of to our line, all always continued

the Now Bruce. I'll to over Bruce, with that you over turn to

Bruce Felt

also quarter, year our for to performance, XX% our XXXX America speaking as of the We're improvement. had with strong North particularly you, I'll area of to by billings pleased focus you Thank million. begin be has with been results and guidance. Josh. that another key $XX.X followed afternoon. full enterprise We with this quarter I'm grew fourth quarter third the pleased

quarter strategy expand We demonstrating sales our also land strong base is and into this our saw working. installed

with XX% $XX.X we a was year-over-year of are XX%, revenue. driven QX, new revenue QX. and customer strong in sequential subscription XX%, QX international primarily to represented million, growth We quarter, grew are total of of from for planning more additions. XX% planning represented improvement by in Revenue was with QX a revenue. for increase increase Consistent and billings XX% a QX seasonally Revenue

that fact quarter. last from rates our than up Our net slightly were revenue billings retention XXX% and were dollar-based the supported by greater

driven XX.X% Our in up second including QX, of by third significant to our year. was subscription basis gross XX.X%, due economies the a revenue of the gross margin in Subscription year a XX.X% from this margin and XXX to basis XXX and services quarter points was management margin improvement business, quarter gross XX.X% improvement points in our to of our and XX.X% compared scale, subscription gross and total optimization margin compared third-party due improvements improved hosting last of services. to increased cost

were X% we effect were QX, sequentially margin by higher marketing however, points efficiencies. The us allowed seasonally In even revenue, largest track structure. same cost year. and by from of top-line realizing with expenses The than by we to our strong to XX able of sequentially. leverage decrease cost to from continue increased our to We sales operating our decreases billings operating while XX% period our operating but expect our to the sequential reducing increased net last this what growth expect in quarter, percentage QX In any we full don't year. our expensed be support to expenses we them QX improve

loss have net now and outstanding net since average $X.XX. million basic year. like diluted. Our and $XX.X I’d on progress This this out our net $XX regards is loss net million, based shares loss, weighted was loss of point of share $XX.X made per to to we In quarterly QX was that million

value to opportunity. the investment cash equivalents with of they on more of users statements digitally cash IT the their that investments market continue October $XXX of At business On planning operations of quarter, we our improvement $X.X the cash users, of our on sales planned large balance to $XX.X our pursue used marketing we our are voluntary, presence, though a but focusing execute our a byproduct from business higher development burn, strong about to to sales and XX% of QX larger sheet, we unique by and right Consistent and both QX. to million. marketing due reduce compared we research in organizations, but in reduction since recall We now and businesses. as believe we a Turning $X.X our expenses with and time, cash hand. get prior and the that our personas, from the We're promoting as are transform of have million, an maintain significant of cash even million targeting benefit the over and to cash expect plan had XX, prior additive platform as operations to out leverage burn by we same we million, our growth higher QX. QX burn in to

grow, decreasing planning and continuing by to profitability from minimal continue when costs, but get current as path get tight within by be that possible. to to overall leverage to structure. the of with to basic the cost leverage Our is are shown and course, in grow do We're We increase costs we business, spending strategies this to implementing plan quarter improved on have innovate R&D sometimes by it and methods and higher headcount. to efficiency new continuing and

million. in of be for expect to we million quarter XXXX, guidance, the the revenue of range Now fourth to to $XX.X GAAP $XX.X

and be $X.XX. expect to outstanding basic average about We a non-GAAP share loss $X.XX loss our to non-GAAP $XX diluted. shares XX.X and net basic weighted million, million diluted This net of per assumes and

$XXX.X shares We revenue GAAP our expect assumes expect per million, issued to loss for preferred year, million we Note June XXXX, representing net be now of weighted shares million, IPO $X.XX all XX%. fully and at fact million of impacted XX.X part shares open cost the quarter. in up the loss out million diluted the and continue with of that non-GAAP our year more Operator? the are million of basic therefore, non-GAAP to $X.XX call questions. XX.X the With year-over-year during but share realizing our structure and for focus $XXX we'll common outstanding we of and that we'll share execution next outstanding of QX. by had also the pleased basic are counts average to diluted. million growth we're $XXX that, for convert XX, In to closing, net and leverage on approximately and full only approximately this outstanding the XX.X quarter to on For our range stock full of

Operator

question Stanley. Morgan Thank you. comes [Operator with our Sanjit Instructions] And first from Singh

open. line is Your

Sanjit Singh

terms productivity, comments strong your questions for and Josh of maybe thank sales start Bruce you XX% market congrats, had sales see. QX the Hi, expense on Bruce, you quarter. the short-term off, on in to taking certainly down above going to decelerating had and you And we yet which XX%, what billings But but expectations, within guidance, it's is trend. want billings, a I your look growth and of it’s to kind our a still

to take what I get then trends? So Thank had it any you. accelerate you when wonder, again? if top-line revenue to might begin would accelerating an see on to back And views we growth

Bruce Felt

you we're we the a we Well, Dean know, running good and and -- And enterprise the it. with off very of Got play still process are to start. in early as are making think the get us we're yet rate. in that of benefit to cumulative doing position to ideally effect of we've to we growth see realize and that the acceleration everything does of all the Jim

think say, Although, this And to we full bad a obviously year of want I number. take opportunity. is will advantage for I not would XX% this

the oriented how higher as have quarters obviously. the think see out players next And we allow all who should see expect play I good be of we international of But very realize also better well effect as course, new to enterprise from things really of of the the to So what's just then, possible. we for and leaders us. couple that to great cumulative the all our are

over we ideally But that's to how playing quarters, the it couple results. we're good next work some just we looking some So do. for out of see anyway have

Josh James

not for here this we're said Bruce is playing which us but not probably shabby, is team, not for rate. not our most here growth rate.XX% we're growth of this Neither it’s worth growth think, I rate. we're adding and that something for before, this to management has of

progress we look certainly where do with heads about it. per we to be throughput we'll rep, model it where it's adding it's more really where now, is we're to we that gets And as I think, which we that making it's wanted about model. see sure have as out that accelerating that model reps. and to it more as the to So, pleased right and time we getting -- profitable start we're excited average we that's know continue at when time right and point getting growing hopefully it the can the had get But growth. really seeing efficiency a with plays we're And

quarters And prudent. so out play a probably for think that I few is letting more

Bruce Felt

probably adding nuance Yes, me worth here. it's one

not X% are and year contracts to makes that And We multi-year we typically did know, the how advance. in That year we've bill QX you billings, and do -- depresses number growth public three number that's which QX is growth impact. for even QX, in last year had as last a this in year we have a one we've one, for about impact, the we been been an since it we had QX year. increases actually, artificially about X% and

them And is to business just aren't what of you're as think, as noting QX. momentum so, QX the it the because real increase want happened it's seeing the in why happen higher the substantially one in And bit I rates growth in that's just be. that a appealing worth reasons than to we little and

Sanjit Singh

you from appreciate quarter, continue the fronts force it on to of terms both the how just was quarter point really the comments sales in performance assess this with productivity, commercial on Josh theme last Bruce. and Maybe just data Understood. sticking do strong. the I sales

terms of pleasant then of the enterprise the the European you picking much sales last of force sort North that how guys force, sort force how front? sales as sales left European picking habits commercial force American sales think the on go up the of on it a the performed in quarter. I to -- is And up characterize surprise

Josh James

in big Well, well from internally, the out I folks find trying a and yes, to okay to better. dramatically this going give mean like that's in one we do talking about release now answering sales of see think to you're to the today marketing plan of and overall that’s numbers specifically the hiring you’re see that’s things domestic. continuing European gives us get questions And the insight find lot of and compared rep But we're the excitement about enough that more to to but in not But, in a it on the transcripts, confidence when depending make continuing comments us certain look see does and you're on is who's here because more about But all positive international very different. expense. the to efficiency us like trend the the to like efficient group compared is reps. quarter-to-quarter productivity prepared And that we're a it's well the at. at which if looking at it we even you're that to just ago you overall changes press and improving and year in

where point pretty looks put to field the more to it good we're add about assets hiring actually sales. can that more Now and continuing and think we reps so more should in we the

Bruce Felt

the call that digital on we been generated remarkably typically with group this What impressed leads so then and we productivity is a how than group. we're market quotas weren't And spend we've how sure corporate size. their this making could internally that the resilient changes of ways on in count commercial the group has to we particularly productivity to group what going that and we that are marketing many the in and we're of been higher

businesses. for we like and want them way accounts as and asset the focused enterprise. that we larger to And us. we have look that's And more real get the So utilize asset a think get benefits larger from the to all that is we well larger on

we're are way scenarios with that there playing out and there play pleased because a this frankly. very it's we're many what seeing positive in could again, from So out

Sanjit Singh

it. Got you, Bruce. Thank

Bruce Felt

You're welcome.

Operator

next Zelnick Credit Suisse. our from Brad question comes And you. Thank with

is line open. Your

Brad Zelnick

learnings And and really Josh quarter the echo for store I my it talked you product real level retail enabling performance. Fantastic and introduced you that at solutions your bringing found as And with Josh, product interesting vertical the packaged many it that should on a market. comment you sure this? some well time large have from see you see to we just congratulations an to like about this productizing being? other expect maybe management Can this of of working you the guys. we comes on opportunity of that how I and great this imagine you introduced suite retail quarter customers

Josh James

Yes.

talking about and they and bucks us a a couple customers $XXX,XXX or and develop we to to get a it will applications That the us us first startups to we've anywhere going you be Strategy benefit we So we you maintain all make these who's alternative one mean, wouldn't do components we're Jay to different that know be really couldn't it our that Officer were unless allow a work really six, over would is bring millions going five, be year right if together this since else. this using been I'll using market. do I'm then comment then turn could a actually he I are Heglar in their be that year and Chief app know dollars bring might up front ecosystem. that's have year And of yes way see paying that a $XXX,XXX apps million from to definitely, of to in-charge and But, to of day to helping going and built top on platform we it. one seven literally an these

we're do applications these elsewhere see or with knowing we this so there. other couldn't working where that any out with customers that's technology And they

to final that the of could things do. excited us kind final gets get really before platform the the one it's applications. it's but of to rest that -- so, was And we -- of had the We can the it we finish

retail. take And bunch thousands to to so, we made made that customer with market applications actually starting customers a them, of our them productize first that we're haven't of just the take down been did we but them and just We path. able

for about and little of a of customers the So we're some I'll there let what bit seeing opportunity Jay like. might those the apps types and opportunity with what talk apps look about and our future

Jay Heglar

put look the example that the retail we do job And of be they when fundamentally great in josh. our a best millions to the one every way an at underserved of of We data it's to Thanks, of able just can. employees. believe data Domo employees should have hands that customers' you that of There's that. entirely required that market don't their --

the retail we've some just position help that optimize that help So really to and suite -- their is their exactly to advance retail customers business. tools end our provided

it that. sky really there. So applications out The is that put excited we limit about what we're really the when types to can comes other of industry

our we to guide As to let Josh really mentioned us customers is our them want where North Star they us and go.

And of want the And coming to innovate near continue have future. so, more many on those in we us they behalf. where see customer their you'll continue to the pulse of to the applications

Josh James

and machines, is company you. IoT? XXX am start customer. Fortune that tens and we’ve that with of of actually stuff I'm to introduce then oh, he would great, -- CIO like an the nice he the me announcement I IoT me an would you example us technologies it applications, and what solutions how was, opportunities like, speaking conference in done all one was that app. conference, future. an CIO after when from And it Yes, to is was anything -- combine and will about first so print of the laugh Historically a made a look can And I to And to of with to meet and you thousands a we but got he that Jay IoT. see started a into I customer okay want how you do I've of you comes don’t a at myself ice said up talk custom said, that why guys was we seeing with make a bunch cream

Jay Heglar

and on the been have that people Yes, years. something for is working X XX IoT

is value taking think Domo by I usable making where very at some unique it and level. user end really data can provide the that

is told take long to so We want end aggregating and the where aggregating story -- to final users. our And move about to IoT data data. all mile and that the has collecting been the of

make coming of our see in the data so, that all are interesting leverages to there you'll that'll be end customers. out things out here that all And power usable of really the IoT some for really platforms future the coming that

Josh James

have the a it same connected do thing final And and and science. data. big you'll work anomalies you science. allows all question. correlations a interesting and to find actually this to that learning in data we're source from. your data the got only you the systems that we robust to data systems, the came we've out platform the has time if and in data we science usually XX% us Well, in XX% science engine data get where -- source real connected very is challenge And the But with Data is lot happen topic. see then with the what of internally [indiscernible] then told seeing the announcements, it’s always And leveraging with the is of that data and preparing collecting machine on AI ask

the sets should to developed a and what that networks first using and did we at we exactly correlations those propose which AI team and should data then to customer. find the automatically So we out we place, to look suggest then neutral correlations is went and in the had ability figure which

So use we cloud and and automatically in have. then businesses that engines operating AI optimizing these using Domo you its and the your

something also preview the look Jay So why of what and don’t to opportunity data him you science give that's a going is like.

Jay Heglar

to within then take level and and that new and take allow leveraging to There's the help to a and for languages derive can data data of extend function extend want want masses. got have create power using help platform. where resource scripts shortage we to context we science really our We've these platform of some complicated the capability of the run global we to customers them the the to value customers Domo make of to our multiple that Yes, custom available scientists. and the datasets of the by those

but company And drive help data them when to you take service. how extend about of the of science. matter entirety scientist we data value you a sets then as of can a the can scripts think take of the those provide a really multiple, or run basically power can we you and data that access So their see when

Brad Zelnick

of lot gains us. think up there's power and cool cases and are obviously Wow, Bruce seeing, advantage sales we just in the in leverage productivity very more taking more there provided that for which could more very How of comes that, which are on that new the of follow able you're you've impressive? inherent you that as from think of in land should model we business versus as used a trend the should into platform. and business guidance I into And decomposing all build If being productivity actually Thanks what renewal to terms about natural touch this then, the efficiently. baked

Bruce Felt

Yes.

cost. It's leverage about all So in customer our to the acquisition and comments how thinking about cost. out give

about renewals that. all which get our to is it's new So additive leverage The business. we

So at $X.XX model to it a spend recurring and -- say, measure target of dollar to total is $X to ACV. our to to our is depending I new we ACV are $X dollar spend get basic would least of on get different basic or ways a

and either as cost get just doing. we yield working per that within to up And or we're spend possible. get leverage the there we're dollar many up are on for So dollar yield points things XX get different sales marketing as every much different that

this task everybody's next more much continue to seeing on cases time. we and coming like seeing -- a but to wait maybe dozens we'll efficient going hand used dozens, was hand just revealing they're the cost doing ever of dozens also we show, say of expectations be. of get our see definitely And it. those, we we know of there. we can get to and more other we don't is happened And this with overtime, I want the of like right want at we QX, is we before. out -- to that what see things. to road to able a So path product and saying we're think that why discuss supposed information it's highly the get that the do. quarter lot and the each we play have when over confident don't structure do we'll a are just do point of and And view we that larger keep on we'll statement, -- about running timing so far, and manner. in for one confident quite his Josh be takes Where a of be report skis plan. doing constructed to detail. really the what get we're what what run. start to but I deals very we're customers, of careful strong, why our to hand a it -- lining be that we close, already on customers supposed enterprise leverage playbook, do which But so There's different start we that's at And own is them And and to away. task is we XX funded is we and there fully seasonally assuming are we'll that sales And is we'll that's point than saying promoting so have have we'd what The we at mean, to are to out a and get cautious perfectly get kind have benefit on -- that our clarity up to make in year we in more QX, why enterprise But know they're business product the next more we'll about quarter. running we're Because really marketing at which is our kind to in as task about seeing to get we're just the we that

Brad Zelnick

more Congrats the QX. sense, jump queue. makes you. on That to Bruce. in progress the I'll and back Thank we look in forward

Bruce Felt

Great, thank you

Operator

Thank you.

Suri with comes next from Our Blair. William question Bhavan

Your open. line is

Bhavan Suri

Hey guys, me, you okay? hear can

Josh James

great. Yes, hear you

Bhavan Suri

did thoughts And I if let updated I'd me past, we've here Hey, here. thanks think and congratulations. pricing. high got you've a level guess, but on around touch I discussed in nice question see there. the love a just some to job Really

As offer. you the plus look if look platform your take I what products, you user at base I model, at and

So products best data places, and data take materially, couple lower up is those the I piece, I this individual materially point the warehouse piece, data price I your prep And ETLP, of piece. piece, AI breed add the together. piece take as to tried like that

early it's of think where want should its I of like in of take or How and think pricing a integrate it outcome, guess it it sort feel to are think competitive vis-à-vis of you kind is What a I where it's do sit you about and it essentially thinking suite. you about kind we How guys does where you is to technologies. dollars to lots that get sort of the stable of vis-à-vis but you you'd underpriced that's how Obviously So which be? coupling the of logos, own have today, actually got issues. you’re days, custom millions of competitive integrated to sort pricing?

Josh James

like pricing we not through with the there. just our people lots and dramatically And I the what thin now taken point lot and talk get way simply to would to strategy to go that about mean that while a a us do, when we're differently us, where customers help to we're and them it's of it in and are the to we'd do to terms that how sales customers and it. compared your right like what to redo it's market the about repeat to talk layers really out confused was a that's figure we very underpricing a we to feel understand There be. platform. We the we it. in leaders value No. have underselling market initially we we visualization were how we going actually of noise

conversation. them architecture dramatically have changes we But the we our slide pieces our and customers and and samurais to that. the seven now together show We this doesn't an pricing the that show how match then fits second all the

pricing that story And to if breed best the the strategies all in be together those look you dramatically there complement so different things your would service at point across it putting pricing. and orders and architecture that's

and just with pricing per organization good it market So user all that was as about we getting these that way. making the that the way sure forces value you're not along that came user an also job customer we're a doing then the into the helping a from components. understand initially conversation And per to different

We've the good the to and you able definitely need time this do we I when and be approach work market there way. been we're seeing more we on So testing it next and right some and it we'll customers quarter from do different some to update positive think feedback strategies impacts. from

of we think customers. approach lot the there's a And way so, upside in that I

Bhavan Suri

Got it.

from up So one me. forward And about follow that. hearing then look I’ll to

Just changes. market as to some made you look made at the changes Dean go has you've

been of has there can commercial more enterprise specific much made maybe changes now any in tweak And that you so for tweaks? strategy more lot big of sort sort of do maybe And continuous you that sort them, next evolution two you're tactically of of this little changes quarters it strategy? sort or more small Dean the Just sort three refine is where what or sort a even how of of -- sort do you a think think strategy? you has and

Josh James

a Well, make yet. let's God not Dean

I think that…

Bruce Felt

the Dean is way. listening by

Josh James

test a enterprise for own an that's working, get job, some And out those been we've to who do. one things been He are is enterprise we've like to And real about and product of of is both these where that earlier brand lot didn't some because given we were that us great didn't things. implementing in increasing different functionality. I should those comments, [indiscernible]. lot have have we state Jimmy and a doing bringing lot reality is ago now able called is probably say -- are. needed autonomy a guy mean, we we not we doing federal were Dean running things know customers this we really get doing that you his also hired different order Dean of added a of Kowalski, working here a flair And a well. Jim years kind a as working run a leaders But, been have quite the well. internally, customers that's more in and enterprise enough well from size his I good we in got Dean, customers really have but enough corporate the functionality that's touched set have And have class customers We've in Jim international lot Dean and Chicago. weren't to the and team at Bruce keep team you're the we approach all. that that happy They often of didn't enterprise three do do where of they that and bunch enterprise on

good us And really take market. allowed a different So product we the those did how team to things. to it's adding job go approach in a

about sat the we in one down this like were do. said the thought it actually that all I things the and said everything they doing the million. they what this guys you that we do do they whole $X that spent and you could $X -- them grail pipe blown Federal finding could CIO suite told Petroleum and had experienced us another for said at taking if Council that they and Government another at a BI, looked product were dream that CIOs and things this in was billion -- person and of AIG to and And came person is And Microsoft even you away. the I was these we -- showed in of it look able holy British do for announcements our that release you wanted guys the ever so, folks in press them and Literally at

allows enable to So changed different us way. where a market dramatically go things it in that to technologies we have -- and

not -- don't different we're I team. then seeing and We backdoor in office. think where the now enterprise a that's the door good it’s CIO into from to walk

with through the the door And and relationship. the front office them into make You CIO landscape that a alters dramatically partner them the conversation. of part need and and to go the

now folks wherever culture, not certainly hit we the and think through head. conversation weren’t in enter, we numbers the the and sales second have meet and that that’s for hard burdened well. and that shot I the no want here reps blood are we we that helps. of they they we’ve doing in that’s And part a and sucking things our numbers we CIO good refreshing get we're the then, attitude, of be the in get to get I And think place sure leaders want times And that one So might make and got of now. And the that’s had Jim there's know from that what they People the experiences hit the attitude and than by approach deals. we follow more they I to they expect expect. of they big their historically Dean and a past the to are in eating, and think that because want that know multimillion kind as to excuses going just our have dollar you big lot deals pipeline

that’s also -- changed that has So culture as well.

Bhavan Suri

you. Thank again. color Appreciate awesome. guys. congrats there Awesome, you, Thank the and

Josh James

Thank you.

Operator

Thank you.

with Lowe Our next question comes UBS. from Jennifer

open. Your line is

Jennifer Lowe

I Great, I of execution the the and a the wins it’s more point to thank versus level from in quarter, you given executive new that want in know customers in C bring those you often difficult XX curious you. are about are something more as to how with am what door terms enterprise in a seeing you sponsorship departmental. coming generalize little bit at this better I ask

of they perpetual has well? cloud in And sort sort sort a the they of traditional as related the in those to wanted with that are space solution deals, or of players head-to-head you predetermined

Josh James

I C into scale, trying haven’t can’t I that solve an you CXO characterize and are upfront. against are a number you CXOs eventually specific traditional know don’t And not go out a are for of something No, the they talk they solve. they have I a and how the solve to are we head-to-head deal and office or going players, figure number as to most is question starting level of get because certainly of do very that a to it’s going to customer cases you the we it ago. are you where a ask they we say company bigger been anecdotally higher else a the lot in ago, There lot to much is was similar ago. and asked around say is we who looking it someone to want like a to -- we CIO deals relationships quick more I these years they also more a to we And couldn't year than way at CIOs in CIO’s that one on effectively conversations, talking scope. have that’s deal to been size, the a are who the going few us and the solution question have are two enterprise years of it in see table as get that's able

that answer more can along. that move question Now conversations it we those helps effectively, much

by them making the finding from more CXOs be running our and of that CIOs, can instead partners. we running the so, effective them from And we know actually and

Jennifer Lowe

some you your where the of that is front parties this point? Bruce, what I efficiencies your deliveries. on the just mentioned migration the I on one is And in the and for for And am some Great. realizing as just leverage remarks, of AWS infrastructure me. more you at third latest curious you're think

Bruce Felt

AWS you're You talking about -- mean backbone? using data as our

Jennifer Lowe

Yes.

Bruce Felt

the we for it there to primary a agnostic in able cost of actually find to Microsoft Google deals strategy stack. as can to is I and data have use centers. we the effective the be Yes, our others not to the with to mix you we better our be to supplier strategy technologies And are us migrate more suppliers. to definitely they too. our off really come could but leverage relationships or the leveraging on get are so And own a move mean needed and also service product. But are also It’s hosting

So processing these are data use so the more effective for a in just same always engineering better we applying of we margin. going that’s are subscription of great also to leverage give improvements speak. much are we do a little time being services to and lot of going that we toward are and And shopping and opportunity out gross see that us continue deal getting of to of to bit to then at resources our a overtime

we and see that So on time-to-time we will comment give from just improving. you as it updates

Jennifer Lowe

Great, thank you.

Operator

you. next Company. and Wood And [Operator from Cowen question Thank Derek with comes our Instructions]

Your is open. line

Derek Wood

those of nice margins, made guess, Great, board. And on just that solid to lot Bruce, driving we margin. follow Are higher? of keep over am we in the thanks. on near-term medium I question how room subscription next last year much so margins or see across a term do you levels the I or quarter kind progress at going job or are on normalized now the on you’ve up a

Bruce Felt

not same happen the And you to next user and definitely One, gun cards for get the just go lot at next in count SaaS tell you for XX%. are entire I'll the technically go of have subscription gross we more go oriented. see And I lot XX% room or renewal company, margin. we we a be been gets Big the where very just get definitely A stream processing things we up of set efficient leverage that. see actually. just to in far benefits technical lot that get get to can a But time as we up rich We we'll natural And there's what's do as to here really costs just generally in can and in larger, I very leverage We'll know skill that continue year. of don't there quarter. more it lot Data have the get for a you think of has tends going opportunity leverage want and very you scale. And for more grow a some little. decades. the to to But just data as of a that, an

wasn't So the incredible beginning so it business. at here. there's obvious the in big we're And opportunity data

bit take And benchmarks clearly that. really we're opportunity in of you over I think finding is to time. the yes, answer can the it get time there. a So best little us class to kind do is But

Derek Wood

cloud. cloud And advantage to Josh, it's of Well, guys a a that's and you is natively target more in hear. the in have mean, question looking high the analytics build great putting for still I've enterprise cloud Any the analytics being in that cloud I distinct prime BI level a pretty the cloud. got should to around and early. for But you built be you. for is

So their we enterprises large what factors kind with are readiness shift? curious the could analytics and where I'm accelerate in to just put of that cloud you think

Josh James

and care, that certainly at. but data XX whatever types be I care don't or don't we're we on -- would of behind I know into a you follow with barometer. to companies you that front, years then federated and just your We We can Conference it not it. the work the can queries I religiously reside have -- not the are or I got cloud don't we're on it That's or that there adopted your variety yet. I don't where types see at says. We going leave cloud it's to see pretty firewall we before data of and is AWS do you've they going of good a customer Yes, the bring you, have get probably be, data think fully to were just AWS would they

that I with we And see, customers like there's not last talking you're really to power and to happen comes AI that's your scale, automatically going got engines too. going not so and different I it's anomalies the much to that cloud, correlations that's efficiencies if data about think But, don’t you're we get that going are going there's business philosophically not cloud. get finding not that be the you're our was and with happen. to So scale It's what all that that cloud through care. more not my said and

crazy we're in your like missing now to shift you're you're that you're being That's have more just you're go eventually Domo, and you crazy waking people it benefits, to going because see not found phone that more right So cloud. if that storage. about talked We've -- about cause all excited up when the come I'm common going in interesting patterns the it's three the and think that and the knowledge because coming some you're screaming that's for to benefits from pulling might and data talking day be you on kicking in out check don’t it's cloud out your to in things your I stuff suggesting morning out type need heels the people pull And going data. digging you that's into to of really what's in. the your

Derek Wood

color. Thanks for thanks the Great, guys.

Operator

from Walravens with comes Pat question next our JMP Securities. And you. Thank

open. is line Your

Pat Walravens

may we start us tell head and very I Did you Hey, have is Great, much. Bruce, your you can with it. count thank missed now? where

Bruce Felt

we shrink I add -- did let a let business -- a the being it not. way it a not anybody to it to way we haven't to one one metric. our But and public the I headcount is little to the We grow tight, are profitability bit. mean, grow be mean made get really business faster the and sometimes

business. it position of we having without growing so as business one support the I hire heads. have the the in heads If it. business when our for had won't. advantage we the But do can make that basic and tools the enough mean, So have to we'll to speak sense that's of doesn't have the have we to we we arsenal

of going just right them that's now. and out Let's more on exactly get what's

Pat Walravens

that's Yes, what I figured.

that then, or be And did as this right. it I growth But you I Okay. the we should look little same bit rate QX a were what at about expect -- XX% growth for different? expect we mean, billings, quarter I like commenting of QX you should should felt

Bruce Felt

kind the million billings in to $XX of day. for next quarter pointed the you end about at Well., of I

year last billings years. long-term So average than And the of why rate. if billings it year I a headwind the that guess, quarter it had mean, up out growth to that's it not has its that wanted of we even kind revenue, an then, had highlight does more I own fact non-comparable for have deferred And it's to the happened you there. I that's though for in can from that have kind future sitting you looked it see at that the

the we’re so that's to, number we think gets we now to. just telling right gets you So it just what where come that's you and where in -- we can you

Pat Walravens

you flow we good. thing that's should to to be cash even? this break do comment then expect Okay, And on want when free

Bruce Felt

lot quarter meant achievable. get a to down we because IPO see get it, pre-public. of we meant we when there. on doubled when extremely we said said would Josh, we the last Well, it's showed us Right it, the And there. it path now just We that we get shared We saying it. we're think we numbers us there

Josh James

I Bruce, now. say first right ready let it [indiscernible]. to me

Bruce Felt

some the time next we're model that I’ll to confident talked anybody past that we’ll would QX any we any on And visibility so be let about maybe far. ahead highly quarter Yes, specific nice we're in number that. But in we've of I more him, say and basically we'll we'll it. some let can schedule get point at on do happen,

So nice we a of have gives reiterate about us had kind it’s confident fact. to be schedule and and that confidence to it it

Pat Walravens

I'll Don’t next again worry, quarter. ask Josh you

see one or issues Okay, there last you macro signs out for any see me, quarter? this Josh -- you hesitation of did did

Josh James

where -- got we've we're our upgrade hesitation. about, I oil year I'm didn't. and a a a the with I and the real different they've data that more time. we've where half ever to in about year they've most And other businesses makeup a have business are Asia getting customers that big for for mean, getting us first through customers for they've it's any for and heard that had. makeup all the regional we one we big their or and some first XX got with to and exciting everything globally small automating us than palm customer manufacturers We analytics and trying on data retailers the combined some into regional that ends having haven't had horizon Southeast I've access people time and them. cool half customers been promoted they wise have and office might got where working working No working are scan with that and office have conversations heard be quickly everything that already doing we up typically within again time base --

maybe technical I to this. So and else the just do. we're of work. have would be my custom be before ask see to plus for doing can that combination could it's a see like that one were thing not seeing answer and said like just do we're the usually they question is confidence it the And consulting to a most -- And And things folks, fun because that our the we'd little those so ton I’ve for no three else really things excitement. if all customers time maybe part who the gives the we headwinds the a me coming most of

from. much customers we're we look will what of the that's gives up, way future. do package line, where lot out what confidence a need the going to it's the right for the confidence effectively. out more right you for out word them. figuring figuring know a that's new job doing So find the And that We But lot at getting promise efficiently customer come to us because the there, way to comes and better take just we to so the to

Bruce Felt

our the I will And big add brought get can't done market. on offering additive a value you is be nothing the that. can sweet believable. at that else. obtained is that's we really out like clear explained product. use not mean, to just I'll meeting challenge unique at my to how I and of other out see And And better macro still environment, this sort showing in have communicating in Yes we it's what then if up the there that -- a it's point. extremely value it anywhere field hand I'm as stand frankly the this And it's the as tough Bhavan, job be Because very there. is

of the we of into the cutting to one up cost put that are on could platform, it without of be so. to very make that deliver making But not it's drinking, we what the us can don't and customers today, we're takes that We add to seem reduction, could required a that we to we lean do kind really market a cost it whole leading the -- of really them replace kind budget and but lean know pitch. there technologies we’ve part to if do tight. You water is if if productive big argument in that got had super our set they that strong environment to

Pat Walravens

both. you Thank

Operator

and participating in gentlemen, program. Q&A Ladies for concludes today. thank our That you today's you. Thank today's conclude That does conference. session for

You may all great disconnect, everyone have day. a

Domo (DOMO) 6 Dec 182019 Q3 Earnings call transcript