Why Domo Stock Is Plummeting Today

Key Points

• Domo posted sales and earnings in Q2 of fiscal 2026 that beat the market's expectations.

• The software specialist also posted strong growth for remaining performance obligations in the quarter.

• On the other hand, management is still guiding for a big loss this year.

• 10 stocks we like better than Domo ›

Shares of Domo (NASDAQ: DOMO) are posting big sell-offs in Thursday's trading following the company's recent earnings report. The software specialist's share price was down 11.7% as of 12:30 p.m. ET today.

Domo published its second-quarter results after the market closed yesterday and announced sales and earnings that beat the market's expectations, but the company also issued guidance that has disappointed the market. The second quarter of the company's 2026 fiscal year closed July 31.

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Domo stock sinks despite Q2 beats

Domo notched adjusted earnings per share of $0.02 on sales of $79.7 million in the second quarter. The results came in ahead of the average Wall Street analyst estimates, which had called for an adjusted per-share loss of $0.04 on sales of $79 million.

Revenue increased 1.7% year over year in the period, and the profit marked a big improvement over the loss of $0.07 per share in last year's second quarter. The company closed out the second quarter with remaining performance obligations (RPO) of $409.8 million, up 19% year over year. On the other hand, investors aren't happy with the company's near-term outlook.

What's next for Domo?

For the third quarter, Domo guided for revenue to come in between $78.5 million and $79.5 million with an adjusted loss per share between $0.03 and $0.07.

For the full year, management expects sales to be between $316 million and $320 million, with an adjusted loss per share between $0.11 and $0.19. The company also guided for its outstanding share count to stand at 41 million at the end of the year, down from the 41.5 million it projected for the third quarter. Along with better-than-expected results in the second quarter, investors seem to be treating the company's plan to buy back and retire 500,000 shares as an indication the stock could be undervalued.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.