Dom DOMO reported a non-GAAP loss of 23 cents per share in the first quarter of fiscal 2023, which beat Zacks’ consensus estimate of 42.50%. The company had reported a loss of 26 cents in the prior year quarter.
Revenue grew 24% year-over-year to $74.5 million and topped the consensus mark by 0.66%.
In the quarter under review, Domo’s revenue benefited from a 25% growth in billings. Improved gross retention and growth in partner contribution contributed to performance.
Shares of Domo have fallen 54.1% year-to-date, compared to the 60.1% drop in internet software industry Zacks. Meanwhile, the computer and technology sector fell 21.3%.
Domo, Inc. Price, Consensus and EPS Surprise
Domo, Inc. price-consensus-eps-surprise-chart | Quote Domo, Inc.
Domo’s subscription revenue grew 24% year-over-year to $64.6 million in the quarter under review. Subscription revenue contributed 87% of total revenue.
Professional services and other revenue contributed 13% of total revenue. The figure was $9.9 million, up 24% year over year.
In the first quarter, Domo generated billings of $72.9 million, reflecting a 25% year-over-year improvement, driven by new customer dependencies, increased spending by existing customers and a gross retention rate of more than 90%.
However, in the first quarter, non-GAAP operating expenses increased 21.4% year over year and accounted for 83% of revenue. This had a negative impact on the net result. While the operating margin increased by 370 basis points, the operating loss on a non-GAAP basis was $3.5 million. In the prior year quarter, the operating loss was $5 million.
Research and development expenses, as a percentage of revenue, increased by 420 basis points on an annual basis to reach 31.1%. General and administrative expenses, as a percentage of revenue, were 22.4%, up 540 basis points year-over-year. Sales and marketing expenses, as a percentage of revenue, increased 550 basis points year over year to 61.2%.
Balance sheet and cash flow
As of April 30, 2022, Domo had cash, cash equivalents and short-term investments of $84 million, compared to $83.6 million as of January 31, 2022.
Cash flow from operations was $781 million in the first quarter of 2023, compared to $909 million in the prior quarter.
The revenue fulfillment obligation as of April 30, 2022 increased 24% year-over-year to $351.5 million.
For the second quarter of fiscal 2023, Domo expects revenue of between $76 million and $77 million.
Non-GAAP net loss is expected to be between 31 and 35 cents per share in the second fiscal quarter.
For the full year 2023, Domo expects revenue of between $315 million and $319 million.
Non-GAAP net loss is expected to be between $1.26 and $1.34 per share in the second fiscal quarter.
Zacks Ranking and Stocks to Consider
Domo wears a Zacks Rank #3 (Hold).
Here are some top-ranked stocks to consider in the broader IT and technology sector.
Analog devices ADI currently sports a Zacks rank #1 (Strong Buy). You can see the full list of today’s Zacks #1 Rank stocks here.
ADI shares have fallen 6.7% year-to-date compared to the industry’s 17.3% decline Zacks Semiconductor – Analog and Mixed.
Avnet AVT displays a Zacks rank of 1.
Avnet shares are up 15.4% year-to-date, compared to an 8.2% drop in Zacks Electronics – Parts Distribution.
Axcelis Technologies ACLS wears a Zacks Rank #2 (Buy).
Shares of ACLS have fallen 19.6% year-to-date compared to the 28.4% drop in the industry Zacks Electronics – Manufacturing Machinery.
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