Why Domo Is Friday’s Big Earnings Winner
Cloud software company Domo reported better than expected third-quarter financial results after the closing bell on Thursday.
When Domo Inc. (NASDAQ: DOMO) reported its third-quarter financial results after the markets closed on Thursday, the cloud software company said that it had a net loss of $0.40 per share on $53.6 million in revenue. Consensus estimates had called for a net loss of $0.44 per share and $51.1 million in revenue. The same period of last year reportedly had a net loss of $0.85 per share on $44.77 million in revenue.
During the latest quarter, subscription revenue totaled $46.9 million, an increase of 24% year over year, and represented 87% of total revenue.
At the same time, billings grew 25% from last year to $55.7 million.
Revenue allocated to remaining performance obligations (RPO) increased 21% year over year to $248.8 million at the end of the quarter. RPO expected to be recognized as revenue in the next 12 months was $153.9 million, an increase of 22% year over year.
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Management noted that the firm achieved strong growth and delivered on the commitment that it made at the IPO to grow revenue while getting to cash-flow positive with the cash on hand. The strong results and improved financial position give management the confidence to invest in the significant growth opportunity.
Cash, cash equivalents and short-term investments totaled $83.8 million at the end of the quarter, down from $98.8 million at the end of the previous fiscal year.
Looking ahead to the fiscal fourth quarter, Domo expects to see a net loss of $0.42 to $0.46 per share and $53.3 million to $54.3 million in revenue. The consensus estimates are calling for a net loss of $0.43 per share on $53.31 million in revenue.
Domo stock traded up 14% to $43.67 on Friday, in a 52-week range of $7.62 to $47.25. The consensus price target is $47.17.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
