Domo, Inc. Q1 FY2026 earnings call

• Josh James highlighted that Domo exceeded guidance on billings, revenue, and non-GAAP EPS, and generated positive adjusted free cash flow, marking the first positive operating margin in Q1. • Key metrics improving included RPO growth, subscription TCV, net retention, salesforce productivity, and gross retention. • Domo has a customer-first approach, leading to longer-term contractual commitments. • Held Domopalooza, where they launched Agent Catalyst for AI agents, made progress in ecosystem partnerships with cloud data warehouse (CDW) partners, and shared customer wins. • Strategic priorities for FY '26 include driving adoption, innovating with AI across the platform, focusing on customer relationships and multiyear contracts, and developing the ecosystem.

In Q1, Domo demonstrated substantial operating leverage. Total revenue was $80.1 million, and billings were $63.9 million. Subscription remaining performance obligations (RPO) growth accelerated to 24% year-over-year. Subscription total contract value (TCV) was up 69% year-over-year. Long-term subscription RPO was up 61% year-over-year. Gross retention improved to 86% from 85% in the prior quarter. Non-GAAP subscription gross margin was 81.6% in the quarter.

• For Q2, Domo expects billings of $69 million to $70 million, representing 1%-2% year-over-year growth. GAAP revenue is expected to be $77.5 million to $78.5 million, and non-GAAP net loss per share is $0.03 to $0.07. • For the full year, Domo raised guidance: billings expected to be $312 million to $322 million, GAAP revenue $312 million to $320 million, and non-GAAP net loss per share $0.18 to $0.26. • Adjusted free cash flow is expected to be slightly positive in Q2 and positive for the year.

• Risks related to macroeconomic factors, including trade and tariff negotiations, which could impact the business. • Uncertainties in actual results differing from forward-looking statements as mentioned in the safe harbor statement. • Risks associated with operational failures or challenges in maintaining growth and margin expansion.

Q: How does the macro environment affect the business and partner adoption?

A: Josh James stated the macro environment isn't ideal, but the team is marketing through it. Partner adoption is driven by product readiness and AI opportunities.

Q: Comment on sales productivity and pipeline building from Domopalooza?

A: Josh James mentioned a 6x increase in sales productivity due to the consumption model and partner ecosystem, and pipeline building from Domopalooza will lead to more deals closing in the future.

Q: Thoughts on gross margin trajectory with consumption dynamics?

A: Tod Crane said the subscription gross margin was 81.6% this quarter, expected to remain near-term with a long-term goal of improvement as consumption ties revenue more closely to costs.

Q: Pricing policy on consumption-based contracts and adoption of AI?

A: RJ Tracy explained that the focus is on aligning value with payment, and consumption-based pricing allows more adoption as there's no paywall, enabling customers to quickly adopt AI features.

Q: Progression of billings growth and investment in growth vs margins?

A: Tod Crane noted that billings growth is based on pipeline and historical trends, and there's a balance between investing in growth initiatives and expanding margins over the medium term.