Domo, Inc. (DOMO), a leading cloud-based platform provider, reported a 10% increase in subscription revenue and a 7% increase in total revenue for the three months ended April 30, 2023, in its latest SEC filing. The increase in subscription revenue was primarily due to a $6.4 million increase from new customers, with a 7% growth in customer count from April 30, 2022, to April 30, 2023.
Subscription revenue for the period amounted to $71,090,000, while professional services and other revenue amounted to $8,368,000—resulting in total revenue of $79,458,000 for the quarter. In comparison, the company’s subscription revenue for the same period in the previous year was $64,575,000, and professional services and other revenue were $9,889,000—yielding a total revenue of $74,464,000 for the three months ended April 30, 2022.
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Decrease in Professional Services Revenue
Despite an increase in revenue, the company reported a decrease in professional services and other revenue, which dropped by 15%. This decrease is attributed to a higher amount of revenue recognized from the delivery of custom apps during the three months ended April 30, 2022.
Gross Profit and Operating Expenses
The company’s gross profit for the quarter increased 7% to $60,889,000 from $56,803,000 in the previous year’s quarter. Subscription gross margin improved from 83% to 85% due to cost improvements resulting from the company’s proactive management and optimization of its third-party hosting services. Domo expects subscription gross margin to remain relatively flat in future periods.
Operating expenses for the period totaled $80,598,000 compared to $85,438,000 for the same period in 2022, representing a 6% decrease. This is because Sales and marketing expenses decreased by 5%, research and development expenses remained relatively flat, while general & administrative expenses decreased by 16%.
Outlook and Future Growth
Domo, Inc.’s outlook for the future is optimistic as it plans to continue investing in growth opportunities, product development, and sales and marketing. According to the company’s SEC report, it expects sales and marketing expenses to increase in the near term to support business growth, and research and development expenses to increase modestly.
With existing cash and cash equivalents of $66 million as of April 30, 2023, Domo believes it has sufficient funds to meet its projected operating requirements for at least the next 12 months. However, future capital requirements will depend on various factors, including growth rate, level of investments, market acceptance of its platform, and customer retention rates, which may increase materially from those currently planned.
Summary
In summary, Domo, Inc.’s Q2 2023 SEC report shows an increase in subscription revenue and total revenue, while its operating expenses have decreased. This highlights the company’s ongoing efforts to optimize costs, focus on growing its customer base, and invest in future growth.
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