Domo (DOMO) Q1 2027 Earnings Transcript

Image source: The Motley Fool.

Date

Monday, June 15, 2026 at 5 p.m. ET

Call participants

• Founder and Chief Executive Officer — Joshua G. James
• Chief Financial Officer — Tod Crane

Takeaways

• Strategic Update -- The board concluded a strategic transaction represents "the best path forward," and Domo has entered advanced negotiations toward a potential deal, with announcement targeted in the near term.
• Total Revenue -- $79.4 million for the quarter.
• Subscription Revenue -- $69.8 million, down 2% year over year, with the decline attributed to "variability in overage related revenue recognition."
• Professional Services Revenue -- $9.6 million, compared to $8.7 million in the prior year, reflecting growth from deployment activity and user conference sponsorships.
• Billings -- $60.4 million, a decrease from $63.9 million year over year, driven primarily by a timing dynamic as renewals closed in the preceding quarter.
• Gross Retention -- 86.7%, up 240 basis points year over year, due to progress in consumption-based pricing, multiyear contracts, and engineering initiatives.
• Net Revenue Retention (NRR) -- 95.5%, an increase of 150 basis points year over year.
• Consumption Cohort Retention -- Gross retention was 92% and net retention reached 108%, exceeding company averages as this cohort grows.
• Current Subscription RPO -- $222.2 million committed; Total Subscription RPO -- $412.9 million, providing revenue visibility through multiyear contracts.
• Adjusted Free Cash Flow -- Near breakeven for the quarter.
• Cash Flow from Operations -- $5.2 million positive.
• Cash Balance -- $39.1 million at quarter-end.
• Subscription Gross Margin -- 81.5%, consistent with prior quarters.
• Total Gross Margin -- 75.3%, reflecting a higher services mix.
• Non-GAAP Operating Income -- $4.4 million, resulting in an operating margin of 5.6%.
• Non-GAAP Net Loss Per Share -- $0.02 on 43.4 million weighted average diluted shares.
• Debt and Forbearance Agreement -- Debt reclassified as current due to not meeting minimum ARR covenant; a signed forbearance agreement with the lender is in place while Domo works toward completion of the strategic transaction.
• Guidance Policy -- No financial guidance provided due to ongoing strategic transaction process.
• AI-Driven Customer Deployments -- Multiple real-world examples cited, with customers achieving significant scale, operational efficiencies, and rapid deployment timelines using Domo's AI-powered platform.
• Industry Recognition -- Domo was named a leader by Nucleus Research in the 2026 BI analytics value matrix, and received top rankings in multiple analyst studies, including recognition for its AI-assisted analytics and cloud BI leadership.

Need a quote from a Motley Fool analyst? Email pr@fool.com

Risks

• Chief Financial Officer Tod Crane stated that Domo did not meet the minimum ARR covenant for the debt facility, triggering GAAP-required reclassification of the debt as current and requiring a forbearance agreement with its lender.

Summary

Domo (NASDAQ:DOMO) disclosed it is in advanced negotiations to complete a strategic transaction, following a comprehensive review process that included engagement with outside advisers. Management reported positive momentum in AI-driven customer solutions, highlighting rapid enterprise adoption and tangible operational benefits delivered in production deployments. CFO Tod Crane addressed debt facility compliance, confirming a signed forbearance agreement is in place due to a covenant miss. No forward financial guidance was provided amid ongoing deal discussions.

• The company emphasized increased adoption of consumption-based pricing and multiyear contracts as key drivers supporting improved retention and revenue visibility.
• Domo underscored integration with partners such as Snowflake, Google Cloud, and Databricks, with customer deployments illustrating complementary roles in modern enterprise data architectures.
• Management cited recognition from third-party industry analysts for both BI platform leadership and advancements in AI-assisted analytics, signaling market validation.
• No Q&A session was held, and future disclosures regarding the strategic process will align with regulatory requirements.

Industry glossary

• RPO (Remaining Performance Obligations): The total value of contracted subscription and service revenue yet to be recognized under active agreements.
• ARR (Annual Recurring Revenue): The value of recurring subscription revenue components normalized to a one-year period.
• Consumption-Based Pricing: A billing model where customers are charged based on actual product or service usage rather than a fixed subscription fee.
• Forward Deployed Engineering: Engineering resources engaged directly with customers to deliver rapid, production-ready solutions tailored to specific operational requirements.

Full Conference Call Transcript

Cory Edwards: Good afternoon. On the call today, we are joined by Joshua G. James, our founder and CEO; and Tod Crane, our chief financial officer. I will begin with our safe harbor statement. Our press release was issued after the market closed and is available on the investor relations section of our website. Please note that today's call contains forward looking statements about our business. As defined under federal securities laws These statements involve risks, uncertainties, and assumptions, including, but not limited to, statements and projections about our future financial performance, growth prospects, cash position, sales efforts, technology developments, new business opportunities, transactions and initiatives, the potential impact of artificial intelligence, and macroeconomic factors on our business.

For a detailed discussion of these risks and uncertainties, please refer to our public filings, including today's press release, our most recent annual report on Form 10-K, and our quarterly report on Form 10 Q. All available on the SEC website. These documents outline important risk factors that may cause actual results to differ materially from our forward looking statements. We will also discuss non GAAP financial measures during the call. Which we use as supplemental indicators of Domo's performance. Unless otherwise stated, all results discussed today other than revenue are on a non GAAP basis. These measures should be viewed as complements to, not for, our GAAP results.

A reconciliation of our non-GAAP results to the most directly comparable GAAP measures can be found in today's earnings release, and on our Investor Relations website at domoinvestors.com. With that, I will turn it over to Joshua. Joshua?

Joshua G. James: Thank you, Cory. Good afternoon, everyone. for joining us today. I want to cover 3 things, where we are at in the strategic process, why I believe this platform is more valuable today than ever, and then some customer and ecosystem partner examples that demonstrate that. So as announced in February, we have been conducting a comprehensive review of strategic alternatives. Throughout that process, 1 thing has remained clear. We are in the early stages of a major shift in how organizations use data and AI. Businesses are moving beyond experimentation and looking for practical, strategic ways to embed intelligence into the way work gets done.

Domo's combination of data, apps, and AI agents positions us well to help customers make that-- type transition. The board's responsibility is to evaluate how best to maximize the value of that opportunity to shareholders. We have engaged with multiple partners and considered a range of potential options and outcomes. Brought in outside financial and legal advisers. And following a thorough review of those alternatives, the board concluded that pursuing a strategic transaction represents the best path forward. So as a result of that process, we have entered into an advanced negotiation regarding a potential transaction. Our negotiations continue to progress, with a goal to announce a final transaction in the near term.

Our board's process has been deliberate, thoughtful, and well informed. Also guided by our outside advisers. Now on to AI. And the traction that we are seeing. So the enterprise AI conversation has shifted meaningfully over the past year. 12 months ago, many organizations were still trying to determine whether AI could create meaningful business value. Today, the conversation is much more practical. Customers are asking how to deploy AI in a reliable, secure, and at scale way across their entire organization. What they are discovering is that AI is only as effective as the data environment beneath it. You cannot successfully deploy AI powered apps, agents, and workflows against fragmented or ungoverned data.

The outputs are not trustworthy, and the results do not hold up in production. Not to mention not to mention that the economics will not scale. That reality is making data infrastructure more important. Not less. And is leading organizations to look for a governed foundation that can connect data, activate intelligence through apps and agents, and then distribute those apps and agents into places where work actually happens. We have spent years creating the data architecture that supports this. And now we are helping businesses move beyond AI pilots. We are helping them operate operationalize AI creating new economies of scale, saving time and money. The conversations we are having with customers and prospects today reflect that reality.

AI is no longer a separate work stream from data. It is the reason data infrastructure matters more urgently than it ever has. And Domo sits exactly at that intersection. Customers understand the architecture they need. The challenge is implementing it reliably. that is why we have expanded our forward deployed engineering team. These engineers work directly alongside inside their environments building applications, agents, and workflows on top of governed data. The goal is not to deliver a proof of concept, but to help customers move quickly from experimentation to production. Often, these solutions are created and deployed in as little as 24 to 48 hours.

The experience with our-- with experience with our team drives deep platform adoption, creates the kind of customer outcomes that show up in retention and expansion. Here's what it looks like in practice. Of the world's largest media and entertainment companies needed to monitor fan experience across live streaming, live streaming events broadcast performance, network health, fan support inquiries, and then translate all of it into real time intelligence for executives and engineers simultaneously. Our forward deployed team went in and built a suite of AI agents on Domo that monitor performance data in 15-minute intervals. Automatically trigger data pipelines on live event schedules, and alert the operations team at the moment something needs attention.

They are deploying it for 1 of the largest live sporting events of the year. Their team told us recently our business continues to grow with Domo and the relationship could not be stronger. A global commodities trading organization deployed a Domo powered AI assistant to help traders, treasury teams, and executives quickly analyze complex operational and financial data. Previously, critical information was fragmented across trading systems treasury platforms, and spreadsheets. Using Domo, the organization built a conversational AI agent that can answer questions about exposures, contracts, shipments, financing, and cash flow using natural language. While dynamically analyzing governed business data. Now live in production, the solution reduces manual analysis and provides faster access to operational insights across the organization.

A leading global sports and media organization deployed a suite of AI powered applications to help customer support teams monitor and respond to issues during major live events. Using Domo, the organization built specialized AI assistance trained on Zendesk support data and event specific ticketing information allowing teams to investigate fan issues through a conversational interface. The solution also automates real time monitoring during live broadcasts dynamically increasing data refresh rates, triggering alerts when support trends exceed predefined thresholds. Now in production, the platform helps event operations identify and resolve fan experience issues faster during some of the organization's highest profile events.

A leading health care marketing agency is deploying an AI powered compliance review assistant to help pharmaceutical marketing teams accelerate the approval of digital and print campaigns. Using Domo, the solution analyzes creative assets against regulatory requirements and previously approved materials to identify potential compliance issues before formal review. The application is designed to reduce manual review effort limit the need for temporary staffing, and shorten approval cycles that can delay campaigns from reaching the market. Once deployed, the agency expects the solution to deliver significant operational efficiencies and reduce overall review costs by approximately 80%. A leading transportation and logistics company developed an AI powered terminal operations application to monitor throughput and identify disruptions across its intermodal network.

Previously, teams relied on multiple systems and manual investigation to diagnose operational issues, often requiring significant time to determine root causes. Using Domo, the organization combined operational data into a unified command center that uses AI to detect anomalies. Analyze trends, and surface likely causes of delays. Now live in production, the solution helps terminal managers move from reactive troubleshooting to proactive operations while reducing investigation times from 30 to 60 minutes to near real time. A leading regional real estate brokerage deployed a Domo powered scenario modeling application to evaluate the financial impact of commission plan changes across its agent network. Previously, leadership relied on manual spreadsheet analysis that required significant time and limited the ability to compare alternatives.

Using Domo, executives can model and compare compensation structures in real time while analyzing impacts on agent payouts, revenue, and profitability. Now live in production, this AI solution can compress planning cycles from days to minutes and give leadership greater confidence in strategic compensation decisions. 1 employee benefits provider challenged Domo to modernize a spreadsheet based business planning tool that had remained largely unchanged for years. Within days, the team delivered a production ready AI application that not only replaced the legacy process, but also inspired the customer to accelerate several additional strategic alter initiatives. In feedback to our team, the customer described the project as the, quote, single most impressive experience I have had with a partner. Unquote.

And said it had pulled forward years of planned innovation while fundamentally changing how they view the future potential of their Domo investment. For us, that is the value of this approach. It helps customers solve meaningful business problems quickly. It drives deep adoption, real outcomes, and creates so many AI opportunities for long-term expansion. Our ecosystem partnerships continue to generate strong momentum, Over the past quarter, we spent time with customers and prospects at events including Google Next and Snowflake Summit. This week, we will be at Databricks Data and AI Summit. Across those conversations, we are seeing a consistent theme.

Organizations have invested heavily in modern data platforms and are looking for ways to make those investments more accessible and actionable for the business. Increasingly, those customers are choosing Domo alongside our partners. In many cases, we are not simply winning within an existing partner account. We are winning together. Customers are selecting Domo and partners like Snowflake, Google Cloud, and Databricks as complementary parts of a broader strategy to connect data, operationalize AI, and deliver business value faster. Here are a few examples. A leading payments provider selected Domo and Snowflake to replace its legacy analytics environment with a modern governed data platform.

Through a joint engagement, Snowflake serves the organization's enterprise data foundation, Domo delivers self serve analytics, AI powered insights, and workflow automation for business users. The combined solution enables trusted access to data across the organization reducing dependence on spreadsheets and fragmented reporting tools. This deployment demonstrates the growing momentum of Domo and Snowflake partnership. in helping modernize customers' data and AI strategies. A leading nonprofit workforce development organization selected Domo and Snowflake to modernize its enterprise data environment and support its long term data strategy. Through a coordinated engagement, Domo and Snowflake partnered closely on technical validation architecture planning, and executive alignment to deliver a unified modern data platform.

Combined solution is designed to enable governed access to data, self-service analytics, and a scalable foundation for future AI and automation initiatives. The deployment demonstrates the value of the Domo and Snowflake partnership. In helping organizations build modern, enterprise ready, data architectures. A leading provider of loyalty and engagement solutions selected Domo and Snowflake to replace a legacy analytics environment and support a modern AI driven data strategy. Snowflake serves as the organization's enterprise data foundation, while Domo provides governed analytics, natural language insights, and workflow capabilities for business users. The combined solution delivers a scalable platform for customer intelligence and engagement analytics, while reducing complexity and improving access to trusted data.

The deployment highlights the growing momentum of Domo and Snowflake as organizations modernize beyond traditional BI platforms. Our progress is being recognized by customers, by partners, and by media and industry analysts. This quarter, Nucleus researched named Domo a leader in its 2026 BI analytics technology value matrix. Dresner Advisory Services recognized Domo as an experienced leader and credibility leader in its flagship BI market study, ranked us the number 1 self-service BI vendor for the 7th consecutive year and named Domo the top cloud BI vendor for the 10th consecutive year.

As the market begins to shift toward AI assisted decision-making, Domo was also recognized in Dresner's inaugural Agentic AI assisted analytics report, ranked among the leading vendors in its first semantic layer and data visualization study. We believe these recognitions reflect the value that Domo provides and occupies at the intersection of data analytics, applications, and AI. With that, I will turn it over to our CFO, Tod Crane.

Tod Crane: Thanks, Joshua. Before I walk through the quarterly results, I want to address our balance sheet and debt situation directly because I know it is front of mind for investors in our filing today. As disclosed in our 10 Q filed today, our existing debt facility carries a current classification on our balance sheet as of Q1. This reflects the fact that the minimum ARR covenant under the existing facility was not met for the quarter which under GAAP, requires us to classify the debt as current. In connection with the noncompliance, we have entered into a signed forbearance agreement with our existing lender.

Under that agreement, our lender has agreed to forbear from exercising any rights to accelerate repayment or other remedies under the existing facility to provide us the runway we need while we work toward completion of the strategic transaction Joshua described. We are in a cooperative and constructive relationship with our lender and appreciate their partnership through this process. Now let me turn to our Q1 results. Total revenue of $79.4 million. Subscription revenue was $69.8 million down 2% year-over-year primarily due to variability in overage related revenue recognition. Professional services revenue of $9.6 million, up from $8.7 million in the prior year reflecting increased deployment activity and sponsorship revenue associated with our annual user conference.

Billings were $60.4 million compared to $63.9 million in Q1 of last year. The year-over-year decrease is primarily a timing dynamic. Q4 FY 26 benefited from a number of renewals that historically have closed in Q1, creating a tough comparison this quarter. We generated a similar amount of new ACV as Q1 last year and the underlying renewal activity is healthy. Gross retention came in at 86.7%, up 240 basis points year-over-year, a meaningful improvement reflecting the progress we have made on consumption based pricing multiyear contracts, and our forward deployed engineering motion. NRR was 95.5%, up 150 basis points year-over-year.

Our cohort of customers that started on consumption continues to perform well above the overall base with gross retention coming in at 92% and net retention at 108% for the quarter. As this cohort grows as a percentage of our renewal base, it remains a compounding tailwind to both gross and net retention over time. Current subscription RPO was $222.2 million and total subscription RPO was $412.9 million Our RPO base reflects a substantial foundation of committed future revenue. Underpinned by the multiyear contracts and consumption agreements that have become the cornerstone of how we go to market.

While growth in RPO has been modest, the size and duration of that committed base gives us meaningful visibility into future revenue and reflects the long term strategic relationships we have built with our customers. Adjusted free cash flow for Q1 was close to breakeven, and cash flow from operations was a positive $5.2 million Our cash balance at quarter end was $39.1 million Subscription gross margin was 81.5%, consistent with recent quarters. Total gross margin was 75.3%, reflecting a higher services revenue mix this quarter. Non GAAP operating income was $4.4 million representing an operating margin of 5.6%.

I am pleased with this result, delivering a healthy operating margin in Q1, while also hosting a very successful Domopalooza, our annual user conference, reflects the operating discipline we built into this business. Non GAAP net loss per share was $0.02 on 43.4 million weighted average diluted shares. Given the advanced stage of our strategic discussions as disclosed today, we will not be providing financial guidance on this call. Additional information will be provided to shareholders as the process advances and in accordance with our disclosure obligations. And due to the nature of the strategic process, we will not be holding a Q&A session on today's call.

We will provide additional information as the process advances, and in accordance with our obligations under applicable securities laws. I will now turn the meeting back over to Joshua for some closing comments.

Joshua G. James: In summary, Q1 reflects a business with improving underlying metrics. Gross retention and net retention are up meaningfully year-over-year. Our operating margin and EPS both showed strong improvement year over year and our RPO is growing nicely. And before we wrap up, I would like to leave you with 1 final thought. When we founded Domo, our belief was simple. Every business should be able to use data to make better decisions. Over the years, we have watched the idea evolve from dashboards and analytics to applications, automation, and now agents with AI. Today, we are entering another major shift. Organizations are looking for ways to embed intelligence directly into the way work gets done.

And they need trusted data, governed systems, and practical tools that can deliver real business outcomes. that is exactly the direction that we have been building toward. I am proud of what our team has created. The customers who have trusted us, and the impact we have had together. I remain convinced that the opportunity in front of Domo is significant, and that the work we are doing is transforming businesses. Thank you so much to our employees, our customers, our partners, and our shareholders for your continued support and we look forward to giving you more information as this next chapter unfolds.

Operator: This concludes Domo Q1 fiscal year 27 earnings call. You may disconnect your lines at this time. Thank you for your participation.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

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