Domo Narrows Losses, Boosts Operating Cash Flow in Q3

TL;DR

**Domo's shrinking losses and positive operating cash flow make it a cautious buy, but watch for sustained revenue growth.**

AI Summary

Domo, Inc. reported a net loss of $10.388 million for the three months ended October 31, 2025, a significant improvement from the $18.761 million net loss in the same period of 2024. For the nine months ended October 31, 2025, the net loss decreased to $51.372 million from $64.258 million year-over-year. Total revenue slightly decreased to $79.403 million for the three months ended October 31, 2025, from $79.764 million in the prior year, primarily due to a decline in professional services revenue from $8.651 million to $7.524 million. Subscription revenue, however, saw a modest increase to $71.879 million from $71.113 million. Operating expenses decreased by 7.1% to $65.829 million for the three months ended October 31, 2025, driven by reductions in sales and marketing (down $3.074 million) and research and development (down $2.202 million). The company also experienced a favorable remeasurement of warrant liability, resulting in a $1.704 million gain for the quarter, compared to a $455,000 loss in the prior year. Cash and cash equivalents increased to $47.874 million as of October 31, 2025, from $45.264 million at January 31, 2025, with net cash provided by operating activities reaching $10.703 million for the nine months ended October 31, 2025, a substantial improvement from the $17.971 million used in operating activities in the prior year.

Why It Matters

Domo's ability to significantly reduce its net loss and generate positive operating cash flow for the nine months ended October 31, 2025, is a critical signal for investors, indicating improved financial discipline and a potential path towards profitability. This operational efficiency, particularly the reduction in sales and marketing and R&D expenses, suggests a more focused approach in a competitive business intelligence market dominated by larger players like Salesforce (Tableau) and Microsoft (Power BI). For employees, this could mean a more stable outlook, while customers might benefit from a more streamlined product development focus. The broader market will watch if Domo can sustain this trend and convert its improved cash flow into long-term growth and market share gains against its well-capitalized rivals.

Risk Assessment

Risk Level: medium — Domo has a history of losses, with an accumulated deficit of $1.538 billion as of October 31, 2025, and faces intense competition. While net loss improved, total revenue slightly decreased for the three months ended October 31, 2025, indicating ongoing challenges in top-line growth despite cost controls.

Analyst Insight

Investors should monitor Domo's next earnings report for continued improvements in net loss and, crucially, a reacceleration of subscription revenue growth. The positive operating cash flow is a good sign, but sustained profitability will require expanding the customer base and increasing platform adoption. Consider a small, speculative position if revenue growth shows signs of recovery.

Financial Highlights

debt To Equity

N/A

revenue

$79,403,000

operating Margin

N/A

total Assets

$201,605,000

total Debt

$130,806,000

net Income

-$10,388,000

eps

N/A

gross Margin

74.1%

cash Position

$47,874,000

revenue Growth

-0.5%

Revenue Breakdown

Key Numbers

• $10.388M — Net Loss (Q3 2025) (Improved from $18.761M in Q3 2024)
• $51.372M — Net Loss (YTD 2025) (Improved from $64.258M in YTD 2024)
• $79.403M — Total Revenue (Q3 2025) (Slight decrease from $79.764M in Q3 2024)
• $71.879M — Subscription Revenue (Q3 2025) (Increased from $71.113M in Q3 2024)
• $10.703M — Net Cash from Operations (YTD 2025) (Significant improvement from $17.971M cash used in YTD 2024)
• $65.829M — Total Operating Expenses (Q3 2025) (Decreased by 7.1% from $70.887M in Q3 2024)
• $47.874M — Cash and Cash Equivalents (Increased from $45.264M at January 31, 2025)
• $1.704M — Remeasurement of Warrant Liability (Q3 2025) (Favorable gain compared to $455K loss in Q3 2024)
• $1.538B — Accumulated Deficit (Indicates historical losses)
• 38,534,833 — Class B Common Stock Outstanding (As of December 5, 2025, concentrating voting control)

Key Players & Entities

• DOMO, INC. (company) — Registrant
• Joshua G. James (person) — founder and chief executive officer
• The Nasdaq Global Market (regulator) — exchange where Class B Common Stock is registered
• $10.388 million (dollar_amount) — Net loss for three months ended October 31, 2025
• $18.761 million (dollar_amount) — Net loss for three months ended October 31, 2024
• $51.372 million (dollar_amount) — Net loss for nine months ended October 31, 2025
• $64.258 million (dollar_amount) — Net loss for nine months ended October 31, 2024
• $10.703 million (dollar_amount) — Net cash provided by operating activities for nine months ended October 31, 2025
• $17.971 million (dollar_amount) — Net cash used in operating activities for nine months ended October 31, 2024
• $1.538 billion (dollar_amount) — Accumulated deficit as of October 31, 2025

FAQ

Risk Factors

• Warrant Liability Fluctuations [medium — financial]: The company's financial statements show a significant increase in warrant liability from $11,208,000 as of January 31, 2025, to $18,787,000 as of October 31, 2025. While a favorable remeasurement of $1.704 million was recorded in Q3 2025, the overall increase in liability suggests potential future dilution or financial strain.
• Accumulated Deficit [high — financial]: Domo has an accumulated deficit of $1,538,910,000 as of October 31, 2025. This indicates a history of net losses, which could impact investor confidence and the company's ability to fund future operations or growth without additional capital.
• Dependence on Subscription Revenue [medium — operational]: The company's revenue is heavily reliant on subscription revenue ($71,879,000 in Q3 2025), which is a positive sign of recurring income. However, a decline in professional services revenue (-13.0% in Q3 2025) highlights a potential vulnerability if the subscription model faces increased competition or market saturation.
• Reduction in Sales and Marketing Expenses [medium — operational]: Sales and marketing expenses decreased by $3.074 million in Q3 2025 compared to the prior year. While this contributes to improved net loss, a sustained reduction could impact customer acquisition and revenue growth in the long term.
• Reduction in Research and Development Expenses [medium — operational]: Research and development expenses decreased by $2.202 million in Q3 2025. Continued investment in R&D is crucial for software companies to remain competitive and innovative; a significant reduction might signal a slowdown in product development.
• Declining Total Assets [low — financial]: Total assets have decreased from $214,340,000 as of January 31, 2025, to $201,605,000 as of October 31, 2025. This could be due to a combination of factors, including asset sales or depreciation, and warrants monitoring for its impact on future revenue generation.

Industry Context

Domo operates in the cloud-based business intelligence and data visualization market, a highly competitive space with established players and emerging startups. The industry is characterized by rapid technological advancements, increasing demand for data analytics solutions, and a shift towards subscription-based revenue models. Companies like Domo focus on providing integrated platforms to help businesses make data-driven decisions.

Regulatory Implications

As a publicly traded company, Domo is subject to SEC regulations, including Sarbanes-Oxley compliance. Any misstatements or material weaknesses in internal controls could lead to regulatory scrutiny, fines, and reputational damage. The company must also comply with data privacy regulations like GDPR and CCPA, which impact how customer data is handled.

What Investors Should Do

1. Monitor subscription revenue growth closely.
2. Analyze the trend in operating expenses, particularly sales and marketing and R&D.
3. Evaluate the impact of warrant liability on future dilution.
4. Assess the company's path to profitability given the accumulated deficit.

Key Dates

• 2025-10-31: End of Third Quarter — Reported net loss of $10.388 million, an improvement from the prior year. Total revenue slightly decreased to $79.403 million, with subscription revenue showing a modest increase.
• 2025-01-31: End of Fiscal Year 2025 — Cash and cash equivalents were $45.264 million, serving as a baseline for the subsequent increase.

Glossary

Accumulated deficit

The total net losses of a company since its inception that have not been offset by profits. (Indicates Domo's historical unprofitability, with a current deficit of $1,538,910,000.)

Warrant liability

A financial instrument that gives the holder the right, but not the obligation, to purchase a company's stock at a specific price within a certain timeframe. (The liability increased to $18,787,000 as of October 31, 2025, and its remeasurement impacted the quarterly results.)

Contract acquisition costs, net

Costs incurred to obtain contracts with customers, such as sales commissions, which are capitalized and amortized over the expected customer life. (Represents a significant asset on the balance sheet, with current costs at $16,501,000 and noncurrent at $23,958,000 as of October 31, 2025.)

Deferred revenue

Revenue that has been paid for by customers but not yet earned by the company, typically for services to be rendered in the future. (A substantial liability, with $146,269,000 current and $3,042,000 noncurrent as of October 31, 2025, indicating future revenue streams.)

Class B common stock

A class of common stock with different voting rights than Class A common stock, often used to concentrate voting control. (38,535,000 shares outstanding as of October 31, 2025, indicating concentrated voting power.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, Domo has shown a significant improvement in its net loss, reducing it by $8.373 million for the three months ended October 31, 2025, and by $12.886 million year-to-date. While total revenue saw a slight decrease of 0.5% in the quarter, subscription revenue grew by 1.1%, indicating resilience in its core business. Operating expenses were reduced by 7.1% in the quarter, driven by cuts in sales and marketing and R&D, contributing to the improved bottom line. The company also benefited from a favorable remeasurement of warrant liability, a positive swing from a loss in the prior year.

Key Financial Figures

• $0.001 — stered Class B Common Stock, par value $0.001 per share DOMO The Nasdaq Global Market

Filing Documents

• domo10q-20251031.htm (10-Q) — 1659KB
• domofy26q3exhibit311.htm (EX-31.1) — 9KB
• domofy26q3exhibit312.htm (EX-31.2) — 9KB
• domofy26q3exhibit321.htm (EX-32.1) — 8KB
• 0001628280-25-055921.txt ( ) — 7791KB
• domo10q-20251031.xsd (EX-101.SCH) — 45KB
• domo10q-20251031_cal.xml (EX-101.CAL) — 66KB
• domo10q-20251031_def.xml (EX-101.DEF) — 296KB
• domo10q-20251031_lab.xml (EX-101.LAB) — 670KB
• domo10q-20251031_pre.xml (EX-101.PRE) — 477KB
• domo10q-20251031_htm.xml (XML) — 972KB

FINANCIAL INFORMATION 1

PART I. FINANCIAL INFORMATION 1

Financial Statements (unaudited) 1

Item 1. Financial Statements (unaudited) 1 Condensed Consolidated Balance Sheets 1 Condensed Consolidated Statements of Operations 2 Condensed Consolidated Statements of Comprehensive Loss 3 Condensed Consolidated Statements of Stockholders' Deficit 4 Condensed Consolidated Statements of Cash Flows 6 Notes to Condensed Consolidated Financial Statements 8

Management's Discussion and Analysis of Financial Condition and Results of Operations 28

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 28

Quantitative and Qualitative Disclosures about Market Risk 43

Item 3. Quantitative and Qualitative Disclosures about Market Risk 43

Controls and Procedures 44

Item 4. Controls and Procedures 44

OTHER INFORMATION 45

PART II. OTHER INFORMATION 45

Legal Proceedings 45

Item 1. Legal Proceedings 45

Risk Factors 45

Item 1A. Risk Factors 45

Other Information 78

Item 5. Other Information 78

Exhibits 79

Item 6. Exhibits 79 Signatures 80 SUMMARY RISK FACTORS Our business is subject to numerous risks and uncertainties, as described further in the section of this report captioned " Risk Factors ," which may cause us not to realize the full benefits of our strengths or may cause us to be unable to successfully execute all or part of our strategy. Some of the most significant challenges and risks include the following: we have a history of losses, and we may not be able to generate sufficient revenue to achieve or maintain profitability in the future; we have been growing and expect to continue to invest in our growth for the foreseeable future, and if we fail to manage this growth effectively, our business and operating results will be adversely affected; our ability to raise capital in the future may be limited, and if we fail to raise capital when needed in the future, we could be prevented from growing or could be forced to delay or eliminate product development efforts or other operations; adverse events or perceptions affecting the financial services industry could adversely affect our operating results, financial condition and prospects; if we are unable to attract new customers in a manner that is cost-effective, our revenue growth could be slower than we expect and our business may be harmed; if customers do not renew their contracts with us or reduce their use of our platform, our revenue will decline and our operating results and financial condition may be adversely affected; if customers do not expand their use of our platform or adopt additional use cases, our growth prospects, operating results and financial condition may be adversely affected; we face intense competition, and we may not be able to compete effectively, which could reduce demand for our platform and adversely affect our business, growth, revenue and market share; if our or our customers' access to data becomes limited, our business, results of operations and financial conditi

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) Domo, Inc. Condensed Consolidated Balance Sheets (in thousands, except per share amounts) (unaudited) As of January 31, As of October 31, 2025 2025 Assets Current assets: Cash and cash equivalents $ 45,264 $ 47,874 Accounts receivable, net of allowances of $ 3,470 and $ 3,119 as of January 31, 2025 and October 31, 2025, respectively 71,544 52,265 Contract acquisition costs, net 15,780 16,501 Prepaid expenses and other current assets 9,089 6,076 Total current assets 141,677 122,716 Property and equipment, net 28,625 29,268 Right-of-use assets 10,158 11,888 Contract acquisition costs, noncurrent, net 19,553 23,958 Intangible assets, net 2,125 1,700 Goodwill 9,478 9,478 Other assets 2,724 2,597 Total assets $ 214,340 $ 201,605 Liabilities and stockholders' deficit Current liabilities: Accounts payable $ 10,033 $ 25,050 Warrant liability 11,208 18,787 Accrued expenses and other current liabilities 49,701 52,110 Lease liabilities 5,731 7,653 Deferred revenue 178,276 146,269 Total current liabilities 254,949 249,869 Lease liabilities, noncurrent 7,695 6,618 Deferred revenue, noncurrent 2,828 3,042 Other liabilities, noncurrent 8,446 9,820 Long-term debt 117,668 124,188 Total liabilities 391,586 393,537 Commitments and contingencies (Note 12) Stockholders' deficit: Preferred stock, $ 0.001 par value per share; 10,000 shares authorized as of January 31, 2025 and October 31, 2025; no shares issued and outstanding as of January 31, 2025 and October 31, 2025 — — Class A common stock, $ 0.001 par value per share; 3,264 shares authorized as of January 31, 2025 and October 31, 2025; 3,264 shares issued and outstanding as of January 31, 2025 and October 31, 2025 3 3 Class B common stock, $ 0.001 par value per share; 500,000 shares authorized as of January 31, 2025 and October 31, 2025; 36,190 and 38,535 shares issued and outstanding as of January 31, 2025 and October 31, 2025, respectively 36 39

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