Big-data visualization company Domo smashes Wall Street’s targets and its stock soars

Business intelligence and data visualization software firm Domo Inc. is flying high in late trading today on the back of a solid earnings and revenue beat and impressive growth in its operating income.

The company also offered a strong profit forecast for the current quarter.

The company reported a first-quarter loss before certain costs such as stock compensation of nine cents per share, easily beating Wall Street’s consensus estimate of a 19-cents-per-share loss. Revenue for the period was flat from one year ago at $80.1 million, but it nevertheless came in ahead of the Street’s target of $77.7 million.

All told, Domo recorded a net loss of $26 million in the quarter, rising from a loss of $18.1 million in the year-ago period.

Founded in 2010 by its Chief Executive Officer Josh James (pictured), Domo sells business intelligence software that’s used by enterprises to integrate data from multiple sources before transforming it into live visualizations. These visualizations can deliver key insights to business decision-makers, boosting their chances of operational success.

In a statement, James emphasized how the company has successfully evolved to deliver greater value to customers in a world where data is increasingly vital for artificial intelligence.

“Our Q1 momentum is proof positive that our strategy is fueling powerful, innovative solutions for our customers,” James added. “These standout results show our reconfigured model is working, and I’m more confident than ever in our trajectory and the bright future ahead. We believe we’ve turned the corner, and we should be able to deliver profitable, sustainable growth going forward.”

James was referring to the company’s recent transition to a consumption-based pricing model for its software, which began shortly after he rejoined the company as its leader in March 2023. One year prior, he surprisingly vacated the company’s hot seat in circumstances that are still not entirely clear.

Domo said the transition to a consumption-based model has helped improve its sales productivity by more than 60% in the last year, and that was evident in some of the company’s numbers. For instance, it posted adjusted operating income of $1.03 million, surpassing the analyst estimate, which called for an adjusted loss of $2.68 million.

Domo also reported billings of $63.9 million, above the Street’s forecast. Billings is a key metric often referred to as “cash revenue,” because it shows the amount of cash it has actually collected from customers over a certain period. That’s different from revenue, which is recognized in pieces over the length of a contract.

Looking to the current quarter, Domo is forecasting earnings of between three and seven cents per share, well ahead of the Street’s target of a seven-cent loss. For revenue, Domo is shooting for between $77.5 million and $78.5 million, the midpoint higher than the $77.5 million forecast.

Domo slightly increased its full-year revenue guidance for fiscal 2026, saying it now expects sales of around $316 million at the midpoint, up from $314 million earlier. That’s better than the consensus estimate of $313.1 million.

On the other hand, Domo dropped its full-year earnings target to a profit of 22 cents per share at the midpoint, but still well ahead of the Street’s target of a 33-cents-per-share loss.

Constellation Research Inc. analyst Holger Mueller said it’s clear that Domo has found its mojo again, and forecast that it will be a good thing for the overall data software industry, as traditional analytics vendors need a challenger to keep them on their toes.

“The question for Domo now is how can it navigate the waters in the already-raging data grab tsunami, where many enterprises have gone all-in on data lakehouses and warehouses,” the analyst said. “It’s likely that many will wake up and consolidate, and we could see that trend emerge as soon as the second half of this year, and if that happens it’s an opportunity for Domo and Josh James.”

Wall Street was happy enough, and Domo’s stock gained more than 5% in extended trading on the back of the report. In the year to date, Domo’s stock is now up just over 20%, easily outperforming the broader S&P 500 Index, which is essentially flat.

Photo: Domo