DOMO Q3 Earnings Beat Estimates, Revenues Up On User Growth

Domo Inc. (NASDAQ:DOMO) reported third-quarter fiscal 2018 non-GAAP loss of $1.06 per share, much narrower than the year-ago quarter’s loss of $25.78.

Revenues of $36.8 million increased 30.2% on a year-over-year basis, primarily driven by new customer additions. International accounted for 22% of total revenues.

Quarter Details

Billings increased 29% to $38.8 million, primarily driven by solid dollar-based net revenue retention rates that were greater than 100%. During the quarter, Domo’s solutions were selected by 21 new customers. Number of customers at the end of the quarter was 430, up from 351 at the end of the year-ago quarter.

Subscription revenues (82.5% of total revenues) were $30.4 million, up 34.2% year over year. Professional services and other revenues (17.5% of total revenues) increased 14.2% year over year to $6.4 million.

In third-quarter fiscal 2019, non-GAAP gross profit surged 50.3% year over year to $23.9 million. Gross margin expanded 870 basis points (bps) to 64.9%.

GAAP Sales & marketing (S&M) expenses decreased 16.4% year over year to $28 million. While GAAP general & administrative (G&A) expenses declined 3.1% to $7.1 million, GAAP research & development (R&D) expenses remained almost flat at $18.8 million.

GAAP operating expenses declined 9.6% year over year to $53.9 million. Non-GAAP operating expenses fell 13.8% from the year-ago quarter to $49.3 million.

Non-GAAP operating loss of $27.9 million was narrower than the year-ago quarter’s $41.5 million.

Guidance

For fourth-quarter fiscal 2019, revenues are anticipated between $37.5 million and $37.9 million. Non-GAAP net loss is expected between $1.23 and $1.27 per share.

Domo expects operating expenses to grow in a range similar to top-line growth in the seasonally strong fourth quarter.

For fiscal 2019, revenues are anticipated between $140.6 million and $141 million. Non-GAAP net loss is expected between $8.79 and $8.83 per share.

Zacks Rank & Stocks to Consider

Currently, Domo carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader sector are Twitter (NYSE:TWTR) , Intel (NASDAQ:INTC) and Arista Networks (NYSE:ANET) . All the three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Expected long-term earnings growth for Twitter, Intel and Arista is 22.1%, 8.4% and 21.3%, respectively.

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