DOMO - Earnings call transcript Q4 2022

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Operator

Welcome to Domo's Fourth Quarter Fiscal Year 2022 and Year End Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] Thank you. And with that, I will hand it over to Peter Lowry, Domo's Vice President of Investor Relations.

Peter Lowry

welcome. and afternoon Good

today, CFO; John Chief and call Bruce Communications our Felt, our Julie we the Mellor, have CEO; Officer. On Kehoe, our

make Julie and brief and our then founder former call. Josh statement will Our Julie? the CEO, Safe Harbor prepared lead will also remarks. onto off with James, some

Julie Kehoe

made issued include financial is market plans Relations release of close statements risks, statements our of to a new projections, Our business statements our also on section our federal for uncertainties about posted webcast. where is and business call was expectations securities website, are press subject call on and impact and the and related the to after These COVID-XX our our laws, the go-to-market this condition. of strategy, initiatives, forward-looking sales being Statements Investor variety this on our expectations under our assumptions. for the business and financial including

our For and filed filed contain please a and release, recently factors discussion of on These the filed today's quarterly our annual the Form our In with XX-Q. adjustments press most most that report materially other uncertainties, those particular, to results documents to refer information and SEC. our report may risk important recently forward-looking statements. differ identify on cause from actual XX-K in these risks Form and contained we

refer financial I'll to GAAP tables for isolation to from that, to our addition non-GAAP measures their Josh. press performance. our a are directly a reconciliation non-GAAP our which turn a discussing or stated, to In earnings addition, basis. measure. Other measures operations will it otherwise believe and GAAP With Josh? results. during as for unless substitute of considered should we of be on today's revenue, we release the we call, results financial as most comparable not non-GAAP in of measures in These than supplemental discuss useful will in Please measures non-GAAP Domo's be over

Josh James

news By that I everyone. this next Hi, of the CEO. from as now, down could heard want and the emerge say more entire a They one stepping I to But I'm then I to years be sustainable founded proud not you've now, XX turned I'm Domo ago, team. it's was sure struggling business business. that vision become successful, grow. very to a finally

business retention hear flow a growth more billings you It's been a with minutes, the couldn't quarter. this and delivered about excited and As from positive productivity in a cash team sales that the more strong XX% be few that last enjoys improving. recurring revenue has business future. we a XX% I even holding

well over I saw Captain to his with taking going As floor on be release, I now in working being end, future. to company's about management the the continue advice right, yours. ship. CEO the off to Domo this and of All XX the before and in years is wisdom interest rest call promoted and and I'm with is be company's is and it started and the lucky company thrilled let jump ago. The you Wong John now relying boat start Catherine John's to to an drive substantial was have as press biggest COO. and in even performance the team that Catherine I'm John new And that. doing hands. I and him It's enough great obviously to watch curator. and aligned the working to The is I'll John. Mellor

John Mellor

Thank you, Josh.

coming looking you minute over forward myself I've call to a you many I to more and on met QX take the President unit. marketing. was our Domo corporate to today. and about Adobe's all Experience and Before came since Officer with Cloud strategy, the I've I'm you Business and after driving highlights, results to over business our Strategy of quarters. Strategy want for I spending been positioning I of Chief Adobe, business of to introduce I Vice where XXXX, Operations Domo's the nine months and time years talk years at

and hyper ready from of to me Omniture, company caliber on to it's we it's to Executive strength business importantly, Domo phase as XXXX Business next innovation. I'm there, future and to attracted Development. and engagement with team lead revenue, advancing the President Domo of was the acquisitions. organic about And this it's I Adobe of our Vice ultimately, growth Adobe. in saw While came focused of Omniture. their Strategy I sale nearly from that through the on management grew as in platform, through IPO to the and it's acquisition $XXX million of billion growth I well I both executing across to patterns annual I base. optimistic that customer phase it's At was What and initially through and differentiation in role, $X it's growth

of action, new these the continue game-changing stronger about dashboards I'll technology underlying we utilization demand. than and talk positioned to the such but Bruce, also from course, by drive at indicates will revenue Domo's companies externally that applications that value at apps Domo very which the saw customer go be customer for IT and customers Domo in metrics demand chain to with XX% the processes they experience and data free also other one the that about ever about results, the explode fiscal can of to illustrate with talk digital ability This digital organization, the believe business detail quarter BI apps ubiquitous event, It's across see for solution the of emerge of impacting Domo's Domo's put to percentage wins an customers and transformation organizations we work is use inside platform BI. are a to a typically today's needing the software to can expand talked the we the strong cases future of new right are CEO base. the of and that point in Why packaged puts embedded which later XX% view It all work is Today, fast meeting data billings of worker. Directors or or better about dealing Companies into the analytics center in spending partners. the growth this, agile become category. improve data some growth. an because this more strength is crisis. entire shortages of top our to I'll COVID-XX line expectations, workflow, top why the focus driving breaking with remains the driving move to this decisions lot from a for with IT is the apps to of to forces to and survey unique customer to earnings what's BI their power and talent from traditional break we the a that Board continuing to across happen Gartner situation. current key pleased proposition. is Domopalooza organization transformation. done of revenue trends, leveraging The business. XXXX of transformation data from the supply business a is disruptions, month. We're our most we're previous from growth still that across fraction In small and the partners. attract where be organizations. more deploy continues also customers traditional competitive areas about gets our customer this digital we This going quarter. as externally we at limited we've posted talking into no within the are drive but across that frontline extends adoption driven while model to on Now let's talk We calls via surprise used millions exposed combine is be deploy power because the a data closed upcoming I'm year-on-year. This XXXX to modern with traditional organization, model. company that that to

and to a POC improve speed, experience. manufacturer It's scale about pleased a talked performance of On also to our converted was has over Now completed capabilities last to based came our let at proof-of-concept marketing data this these of and POC mention customer quarter's from integration was historical being Big through that talk new about our me the very that Domo larger their notable able data been faster wins. easily with And call, solution. size contract. choose wins platform. into scale the POC on conducting in a the that and a Domo successfully well or our Everywhere few From flexibility deals. X-figure to our auto most Customers some X and global customer happened We're to to say extend our we of robust quarter optimize QX continue to customers industry's partners. than much this experience subscription partners the this

Domo's months, POC, selected take win because interface needed data with consumer-friendly replaced initially data solution realized insights Everywhere way. legacy in notable a model, new they it's we SMB clients. Big well new to logo assessment platform's particularly leveraging thousands were logo systems. X customers that Domo personalized provide delivering deliver professional our and data in hybrid other to chose what was expecting it's new was a They that kept that it's as for new their platform, chosen Domo in better, financial of the short that analytics visualization also modern solution. security it's a more to warehouse a Another with firm firm could cloud as to accounting were data because data days Domo integrations this A to third did After services Domo they support they in were but Domo of and with win

engagement logos, drive expanding and upsell In who use organizations. their we addition to Domo new customers of to are their existing with across continued

hospital our analytics drive employees their One top clients, data, cases. operations, network bring finance contract together marketing and a consulting all of to of use to services over XX,XXX a enterprise-wide additional signed with HR, including X-figure

a on-premise an support year is was the marketing, of the runs with and of accessing XXx that now are professional and that ACV thread Domo in quarter ACV expansions and drive to of wins through sales than of this Regardless it's services more combine started all data the of with cloud upsell to customer use common initial new now the significant initial case using power software case, HR and business business demonstrates operations This our strategy. and Another earlier. that use outcomes. systems data. case company these generates retain land, customer who expand a Domo users they This is using use across are

over to with Before team leadership I have to Bruce, I here made hand some additions Domo. few have starting our this and exciting changes at on, more a to we touch highlights

from embark our growth data joined their helping Catherine significantly transform her. in Company Mohammed be them from on I'm strategy as Officer. we our Nikki digitally to the importantly, her our with Operating As today, He role art we will Director business. possible been work important phase named to customers we with President you important of Data using Executive always and And remain to Chief diversity, their also ESG Domo next know, the business Vice that excited the also most Walker McKinsey inclusion experience of January, announced Wong as better us Officer Chief help In was outcomes and Diversity. closely benefit platform of Domo and Engineering. perspective, equity us. that to will promoted play discover From align last announced will to of and Aaser an quarter, we have & an

our to commitment tenth in row, have incredible ability have year Best as a For us because which and Business multiple of And that this company. Work quarter a massive she Glassdoor's were DEI opportunity their it. lead on they for by around entire is the success whose In company engagement we voices QX, is do. three role, for the list. for Utah in best Council why years, she has confidence feedback. for we newly community value Companies to I Domo. In which all we represent will were I'm another into to because influenced execute ahead formed named For the also to will it extremely and named achieved focus Stepping heavily meaningful a work by customer grateful Domo on and of team closing, led our It's drives from employee

guidance hand into year ahead. Now the over it to numbers to deeper go provide I'll the for and Bruce

Bruce Felt

with Thank growth closing you, with growth, John. in QX, We XX last finished XX% the a fiscal billings XXXX the out strong quarters. highest

we the XXXX in foundational been have investing us in also year should important and growth drivers quarter to Some these of growth objectives. drivers fiscal the billings our contributed achieve help

hiring. the our sales was of sales fiscal We 'XX. by over key drivers grew One force XX% direct in

making awareness, continuing to very Our complex per over longer because while since of drivers hooks are improve enterprise new hiring should we improved part and year with gross of confidence hiring. brands business and expect We're into good of to their high higher has well engagement on which pace we heck selling time, progress our in the new cost-effective finding will those our value it should And take that higher in partner continue our drive this contribution. retention the to improves, we into $XXX on well. strong a around while we growth. provider XX%, with customer business. sales Net begin driven as ramped acceleration over which includes growth new see growth 'XX. by we to of as the solution become partners, at logo new This deals see application gets first billings market that use finding of accelerated had better Enterprise logo and we as a rep additions, And technology that a very gives same rate. lead level to great all expansion spend We're of extremely that QX ARR into customers to at upsell overwhelming At retention compared of bring and and lean XX% strategy focus partner about positioning it business was year to infrastructure. even pitch to more sales pleased the XXX% contracted year's channel on driven our as can tool competitors. million, delivered high we're that on partners machine. a production, productivity continue objectives category rates million a of Also, the infrastructures. We basis group it and traction, the basis. logo existing functionality We can yields key of customers year-over-year reps plan tend We're growth and as in the the enterprise $X it marketing primarily as to an is complete contract Other into close The because platform a better integrate the XXX% this partners a accelerating new complexity improve market from was We existing particularly to improving at FY retention, and last of our getting pace. us significant improves occurred which least of momentum. messaging revenue gross customers. to also corporate increase as our believe was with sustained, customers. of with resonates enough ease amount

by in we represented the quarter. year-over-year XX% revenue driven had revenue there's revenue strong from and the our nice QX end Construction to last XX%. up some customers XX% XX% our XX% while total XX% have total This million, is XX% XX% QX, year-over-year multiyear a ago. year-over-year, beat QX. the XX% in revenue measure, our was quarter On about $XX of services we grew of against total XX% quarter under guidance represented the dollar-weighted acceleration strength deals last business. now America grew million $XXX a quarter We from from a North of International down and growth a of a at our RPO of of large in revenue. current XX%. Our revenue, RPO due an year contracts talked total increase grew of very

Some of few billings at billings to expect the larger and factors converted we already these XX% quarters, revenue would cause sustained are and have growth see XX% to Having times. growth said subscription approach growth revenue subscription many deals have quarters, begin we for that because next diverge many so should services revenue growth. that, rates our surpass to to growth. to over There start

FY the with subscription revenue growth expect of we fact, In about 'XX XX%.

able long be XX% revenue or levels. those quarters, we better As as sustained also billings be can to at should sustain

slightly gross related from In strong as to line margin year QX, operating from last in invest up to XX% in of roughly and expenses primarily subscription was due QX. compensation in our part expenses capacity QX increased our and with XX%, Our we sales last year, QX.

was loss year a operating loss on outstanding remain our net $XX.X Our positive. In and $X.X is weighted based we sales basic million per million XX.X was average $X.XX. million, flow up This share diluted. ago from and cash QX, net

balance cash down quarter. from slightly million, was Our $XX approximately last

to what we expect discuss in 'XX. the year QX Now and FY full

we're growth to billings approximately year-over-year of QX, For XX%. guiding

billings QX the expect large be our impact amount year QX billings tough and remainder line last roughly of the due to a of expect We in growth with because to year. compare for modest of acceleration billings the in then

initiatives, particularly associated as levels, invest a as continue the of costs with the current we for On result For communicated fiscal sales billings XX% expenses are before, our of in hiring. year, growth conference user planning we're increase for but striving expenses, and have in higher growth we QX annual year-over-year growth. guiding to about QX the in to we operating as QX our primarily

achieving FY and confidence QX we to operations provided enhanced growth are results, for all cash of planning 'XX slightly by our investments and growth Given adjusted net in positive. be our

for to guidance metrics. Now GAAP

revenue first million generated able range revenue the should the be we QX able to than of guided to $XX.X quarter of in FY For more $XX.X be we expect deliver deliver GAAP of in 'XX, we're more amount. If to backlog the to million. the

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

range the to we GAAP 'XX, For million, to $XXX the be representing of expect FY in full of growth XX% year-over-year to revenue of $XXX million year XX%.

to basic closing, $X.XX call pleased In diluted. share, continue believe for non-GAAP net our $X.XX. QX shares against to has weighted-average positioned strong we'll the and plans. growth open diluted of we're to basic We that, seen million per and performance outstanding, loss expect and well Operator? execute XX.X with we questions. This are With in our

Operator

Your Morgan the of with question first Instructions] [Operator line comes Stanley. from Singh Sanjit

is line open. Your

Sanjit Singh

direct John, I XXXX from start taking this the to? should of strong for you be for Josh fantastic stepping go. the of don't in with in as see really But start know to who the congrats you of is and Thank obvious to QX on Are But and to guidance well. down the how the questions one and terms talking sort and you're terms role, is him going about beyond. thinking just I

the good given spot. terms I transition, so transition, off is the that the where the stepping of handoff think in the any sort the terms color exiting there can business as sort timing there just Board so provide is a is well, of today of And in the of of you and really company? it in of is Josh

struggling big and you, year a first question. CEO. of why Congrats for sort Josh sort may be then first as And of jobs not the the give promotion. I'm question some That's on in to is his John. what with around mentorship think I

company what sort year fiscal right? think in Domo change strategy architected Year beyond? not strategy, into change the should New that you to If you of CEO, way or again, expect As the we going about of and next

John Mellor

Great, Sanjit to talking the and good you. questions. Appreciate

here about the a CEO. has team Josh team results. business. on exciting today, the we've I Board, management And This it's has leverage depth that's those delivered results because this appreciate the time got these value vision about the stepped in has how stepped the breadth the for down you proposition the of opportunity. execute As to perspective unique a really opportunity and my we've actually saw, to a team. down This from And is such got to continue market. an and has an question as passionate And Domo

are We're simplicity the Are execution, really my systems a right? me big $X focus billion investing after on the the there? which progress right to we are in big the think strategic think decisions experience. that revenue be I about And of run scales? to and we I then, is proven business path for now employee we've it right really style targets we on making need of priority is course, as Are making going that a business.

in people, As hope How lot due the and maintains of that question. with was high-performance we team? So do I organization, we hope sales a just add we there. way do I your how kind do more that that consistency? a a answers particularly inclusivity that to build do and culture there

Sanjit Singh

to executing revenue the Is type of And around the Bruce, going to the essentially should that X-figure Or spoke just may over is more I Services customers kind subscription that of of year? appreciate some the starting sizable is the that hopefully the going us growth? be How enterprise of particularly and tell Is that a to wins? you or be -- large of thoughts. in into expect have guys kind feature leading in of terms deals become past the we proof with and indicator trend forward? of suite motion X-figure been one to of a going the that concept that a the new contracts. going services conversion of is proof quarter large concept forward? to for contracts of converting much terms No. then

Bruce Felt

rate some having in of trend convert closed time. at for very quite The high been deals a here proof-of-concepts the has

we larger customer. it comforting of see to because going and of highly it's scale more What very was dollars We the rates. just just much to case may is the those have in And to because use enterprises they fully they this the have commit. the makes in high before know mind large unique of size product is close work

So more generally. won't to services that our and -- higher wouldn't see be I a motion traction, is enterprise as indicator as conclude leading surprising gets it that. we necessarily

I are. think we of we're do do concepts everything business. really to the We proof believe subscription in maximize that. can We

services start having Our is that's we successful critical high there start. smooth organization a to ensure and rates. know renewal to And

So like was going is to business. partners. it's manufacturer We actually of always from focused and large come a source would be And deal. be our a big partner part more Partner source of that actually would more auto one see our to -- areas. big

So a into continuing some just we success we but more here high in that closed that's business, time. for hope to that the been with rates have large of them see turning is POCs trend enterprises quite

Sanjit Singh

Got you. Thanks.

Operator

question next Cowen. the with comes of line from Wood Derrick Your

open. Your line is

Derrick Wood

chapter. to next wish in want success his And Great, just Josh's I thanks.

were question, First out focused Wolff for guess, closing you. on John, a I Ian knew We and QX. strong

You job. to great think guys on Wolff did And I at with and curious the now that maybe things. go-to-market some But a expected few come tweaks just there's a you. helm

to a balance have and sounds of it activity. like transactional First, large you want deal

verticalizing side large partner could the sales the kind do around on drive thoughts would or incremental your you what be it it new force I I will more development sound effort, see hear think more conversions. how thoughts to would about love the helpful. we there. of be And then deal just like,

John Mellor

the Sure, question. thanks, great. Appreciate And Derrick.

So some think over yes, engine, constantly in seen, really that as we've certainly. of a few the seen I the tweak, it's the good last go-to-market There's state quarters. team traction has

the both is work you're to we've these an really generation, Ian team everyone an about working. from helps retail really talk the our of able those excited to about or exciting. align working. that engine some corporate the financial lead the to something and about continue you about for deal crisply as you of That Bruce. is you're focus solutions or talk that focus starting where Wolff parts in us the it where business from opportunity that got is with know got And that's incremental opportunities as as even talking push excitement engine helps we And an about that's You've different industries And more cetera. each business opportunity slightly the mentioned, because And very And to we the for hear while to services putting of business, and on enterprise. the talking data closure, are verticalizing on when I when really to there gets customer. of language the manufacturing. et strategy with Being the value see speak improvement that It Domo in of organization. excitement

Derrick Wood

But I the the to encouraging for confidence levels been ARR Maybe to to wanted sales you've strong versus on Great. see line Certainly, Bruce. imply PS talk How how hiring work and be a lower is 'XX. much that? about side? on in one and from the coming and seeing. much top converging to EPS gross investment, And guide like higher 'XX pressure bottom and things expected the in of that just line growth really the a growth coming fiscal that is mix does to maybe is factor expenses and the back OpEx margin? revenue some op from margin And what

Bruce Felt

Yes.

we business. growth. how is take lot clear And sit of we in saw closes see -- our year I were towards year now, got strong during we just as dollars we generally just pretty posture about a on And generated would the bullish very working this have and out. And forward. is flow if to investing our available works there, well, And was, right I'm of response we status. questions and going put preference really them that the our First last extra to any economics our breakeven all, whatever momentum what the here beyond mean we is on by cash investment that, unit

supporting up And growth, engaged billings really us. was think talent mix stronger on first, other sure much built maintain sure to the try frankly working is last investment recurring that to initiatives to items really as mean, we the to number many quarters we growth. We'll that it growth. of be even supporting ACV many, I was invest Ian we in incredible when to really afford to will going. engine working line leverage making can code the Underlying have rates for we've up, Wolff And this year. in of of sales make ACV it nice, who a at the this the levels. productivity the we can if just new say hiring and with get in get. we're And into sustained together ZIP that we extremely infrastructure growth certainly combination growth even a we even happen And of we of growth. -- just to been setting I go want striving the we then keep out always make more, that these have this more higher stronger infrastructure momentum can we keep

XX% this as we year. I mean we cash have last thinking the that's to take us. have drivers everything, realized. the to see than -- confidence be up, But investing it So XXs. growth last did come lot last coming we're a philosophy those into I at year. through year I of the of again, our beginning play to of out have like the now something sit we the a this now there's and guidance More plays year, was stay of beginning like how here at year, see and of in And well beginning to lot of we'll more get behind but user drivers conference have while flow advantage that trying yet go front we we'll the when yes, really positive the of to in just I

Derrick Wood

really hear. great to that's Yes,

Just flow the to clarify expecting positive are you year? cash for operating

Bruce Felt

Yes.

Derrick Wood

for taking That's the great. Thanks questions.

Bruce Felt

welcome. You're

Operator

William Your with from Kamil Blair. of question next the comes Mielczarek line

Your is line open.

Kamil Mielczarek

there over color some are evolution think John, in prioritizing roadmap on holes what Domo the And to R&D Any portfolio product the And Thanks for you the great. about do thinking today? investments? product taking the my you years? I'd can few your term. about like question. on be longer the And hear congratulations of how you the next How platform are would of thoughts the promotion. provide

John Mellor

Yes, sure.

event a So Domopalooza. a customer up here in up queued just our weeks annual for at we've got lot few coming

of breaks So calls, of traditional say truly on because one concept company the and adoption instead to I BI their of low whole So steal too be it we're combined really decisions is But tablet, data on data few meaning as it the which making and real hands, an of that. an an the phone, won't kind take percent data by that to BI a allows thunder to of opportunity is with business that earnings -- action. taking the from team's much we've talked people I you area in of seeing workflow, the are that about right in device this interesting having and action, on will apps BI the digit driven organization, move mold this drive focused experience put out of use to right? traditional really wrapped in breaks the a right in the of

Catherine So that that's making customers your exciting situations to makes success one your given especially big They're of push. the those tends you've And customers the think folks map if better you better customers the Officer has you and more -- EVP happy drivers road scare that really are best embraced those give I the of with big now the it's product real approachable customer. She our the big and Domo's acceleration. really about Chief Operating and of it product your because road that's that And map. and customers customers for customers. to is Wong, talk a make Product tend other end, heard be

Kamil Mielczarek

the you and plan Or model continue accelerate for thinking point despite the great And That's the where do one about same are you of been free throughout continue maybe hear step maybe more in headcount is helpful. through investments productivity cash quota-carrying margin? in sales we the strong improvements. you longer to let pace that the you flow headcount there see expand margin about business? some relative of out to year. quota-carrying the back Thinking term, to up expansion It's If flow And to of how to productivity, Bruce. a the growth?

Bruce Felt

soon thought less we a we that respectable. frame productivity quite or The time as on level was basic more -- philosophy was as hit were

definitely partner year upside good Let's that We of one us out accrue lean business. in the as going the in foundational interesting expanding we're more space. Domo more the in, business, enterprise which have lot apps, being for keep platform-agnostic just take that better we keep full fast out software just year is expanding growth into pressure landing needing marketing, and We're time to just what for that faster, which off the the goes. which company certainly, drivers with And of market. scale another That year pressure still of keep are positioning think out first baseline that of sales other -- to the how large ultimately and supplying -- well, platform was last everywhere. of the that the see -- building get And year the very with should yield certainly area. we the a the still developing gives benefits hiring. in in to off that landing take and might the We're use

it. we is, So out start of these getting other we drivers yes, leverage our and hope get working

million to We the as to don't well finally we're profitable. charge time allow more in I ARR. now to highly through unique could some economics this It's business. us the $XXX through. be working out, as this positioned. the SaaS very to just We see in margin favor. flow So have past. our had flow we much the happen we're that line. in is tell to a allow it point me of that year, on But gives through room point you profitable of to let how we'll getting where extremely growth think We in We want where challenged we've

energized We in to leaving a turn the But of right have sit cost management bit points. lots here growth we I long team us recurring philosophy a to with in us time; become position in you we as allow that's revenue it right basic extremely money. here of that point should now. little an And will puts profit now, at model, know as run, that the the sit any it so

Kamil Mielczarek

congrats, the That's year. and Bruce. on great color, And strong again, the strong results Thanks.

Bruce Felt

you. Thank

Operator

there no joining. time. for Thank And conference at further are This you this today's conclude call. does questions

You disconnect. may now

Domo (DOMO) 2 Mar 222022 Q4 Earnings call transcript