Why Domo Is Friday’s Big Earnings Winner

By Chris Lange Published Dec 4, 9:59AM EST

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Why Domo Is Friday’s Big Earnings Winner — © Pineapple Studio / Getty Images

When Domo Inc. (NASDAQ: DOMO) reported its third-quarter financial results after the markets closed on Thursday, the cloud software company said that it had a net loss of $0.40 per share on $53.6 million in revenue. Consensus estimates had called for a net loss of $0.44 per share and $51.1 million in revenue. The same period of last year reportedly had a net loss of $0.85 per share on $44.77 million in revenue.

During the latest quarter, subscription revenue totaled $46.9 million, an increase of 24% year over year, and represented 87% of total revenue.

At the same time, billings grew 25% from last year to $55.7 million.

Revenue allocated to remaining performance obligations (RPO) increased 21% year over year to $248.8 million at the end of the quarter. RPO expected to be recognized as revenue in the next 12 months was $153.9 million, an increase of 22% year over year.

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Management noted that the firm achieved strong growth and delivered on the commitment that it made at the IPO to grow revenue while getting to cash-flow positive with the cash on hand. The strong results and improved financial position give management the confidence to invest in the significant growth opportunity.

Cash, cash equivalents and short-term investments totaled $83.8 million at the end of the quarter, down from $98.8 million at the end of the previous fiscal year.

Looking ahead to the fiscal fourth quarter, Domo expects to see a net loss of $0.42 to $0.46 per share and $53.3 million to $54.3 million in revenue. The consensus estimates are calling for a net loss of $0.43 per share on $53.31 million in revenue.

Domo stock traded up 14% to $43.67 on Friday, in a 52-week range of $7.62 to $47.25. The consensus price target is $47.17.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.