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DOMO, INC. (DOMO)·Q3 2025 Earnings Summary

Executive Summary

  • DOMO delivered a solid Q3 FY2025: revenue $79.8M, subscription revenue $71.1M, billings $73.4M; management said the company exceeded guidance on billings, revenue, and non-GAAP EPS, with non-GAAP EPS at -$0.08 .
  • Subscription RPO rose to $354.1M (+3% YoY) and long-term subscription RPO (>12 months) to $145.9M (+14% YoY), signaling stronger multi-year commitments; average contract length increased 13% YoY and 10% QoQ .
  • Consumption transition continued: 100% of new logos on consumption; consumption now 55% of ARR (from 5% ~18 months ago) and expected >60% by year-end; partner-sourced billings up >20% QoQ and partner pipeline +90% QoQ, helping faster closes and higher conversion rates .
  • Q4 guide sets billings at $98–$104M and revenue at $77.5–$78.5M; full-year revenue raised to $315.5–$316.5M and non-GAAP EPS improved to -$0.60 to -$0.64 (from -$0.69 to -$0.77), reinforcing execution and durability .
  • Stock reaction catalyst: demonstrable momentum in partner ecosystem and consumption adoption, visible in RPO, contract length, and pipeline metrics; however, cash flow timing issues and variable gross retention (85% in-quarter) remain near-term watch items .

What Went Well and What Went Wrong

What Went Well

  • Partner ecosystem acceleration: partner-sourced billings up >20% QoQ; partner opportunities +90% QoQ; partner-sourced new logos closed in 80 days vs >100 days for non-partner sourced and with higher close rates. “We currently have close to 400 partner-related opportunities… representing over 80 unique partners” .
  • Consumption model scaling: “100% of our new logo deals were structured as consumption contracts… now represent 55% of our ARR,” with plan to exceed 60% by year-end; consumption aiding vendor consolidation in DOMO’s favor .
  • RPO and contract length: total subscription RPO $354.1M (+3% YoY), subscription RPO beyond 12 months $145.9M (+14% YoY), average contract length +13% YoY and +10% QoQ, highlighting durable commitments .

What Went Wrong

  • Cash flow timing: adjusted free cash flow was -$13.8M in Q3 due to $8–$10M delayed receipts from consumption migrations; majority collected in Q4, but the timing created a quarter-specific cash flow headwind .
  • Gross retention variability: in-quarter gross retention at 85% with management expecting fluctuation between 85% and 90% near- to mid-term; ARR net retention was 90% and improving but still below desired levels .
  • Near-term billings sensitivity: reallocation of sales capacity to partnerships may pressure near-term billings; Q4 mid-point implies annual billings contraction, even as management prioritizes building a durable growth engine for FY26 and beyond .

Financial Results

Quarterly Trend (Q1–Q3 FY2025)

MetricQ1 FY2025Q2 FY2025Q3 FY2025
Revenue ($M)$80.1 $78.4 $79.8
Subscription Revenue ($M)$72.1 $70.9 $71.1
Billings ($M)$65.5 $68.6 $73.4
Subscription Gross Margin (GAAP, %)82% 81% 81%
Subscription Gross Margin (Non-GAAP, %)83% 82% 82%
Non-GAAP Operating Margin (%)-9% 2% 3%
Non-GAAP EPS ($)$(0.33) $(0.07) $(0.08)

Note: CFO stated Q3 non-GAAP operating margin was 2.5% (vs 3% in press release), likely a rounding or reconciliation difference .

Year-over-Year (Q3 FY2025 vs Q3 FY2024)

MetricQ3 FY2024Q3 FY2025
Total Revenue ($M)$79.7 $79.8
Subscription Gross Margin (GAAP, %)84% 81%
Subscription Gross Margin (Non-GAAP, %)85% 82%
GAAP Net Loss per Share ($)$(0.45) $(0.48)
Non-GAAP EPS ($)$(0.00) $(0.08)
Billings ($M)$74.8 $73.4

Actuals vs Guidance (Q3 FY2025)

MetricGuidance (from Q2)Actual Q3 FY2025Result
Revenue ($M)$77.0–$78.0 $79.8 Beat
Non-GAAP EPS ($)$(0.14)–$(0.18) $(0.08) Beat
Billings ($M)$70–$75 $73.4 Above midpoint

Revenue Mix (Q3 FY2025)

MetricQ3 FY2025
Subscription Revenue ($M)$71.113
Professional Services & Other ($M)$8.651
Total Revenue ($M)$79.764

Selected KPIs

KPIQ1 FY2025Q2 FY2025Q3 FY2025
Total RPO ($M)$346.3 $358.9 $354.1
Subscription RPO >12 months ($M)——$145.9
In-quarter Gross Retention (%)83 88 85
ARR Net Retention (YoY, %)88 90 90
Consumption % of ARR~30 >45 55

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q4 FY2025—$77.5–$78.5 New
Non-GAAP EPS ($)Q4 FY2025—$(0.13)–$(0.17) New
Billings ($M)Q4 FY2025—$98–$104 New
Revenue ($M)FY2025$313–$315 $315.5–$316.5 Raised
Non-GAAP EPS ($)FY2025$(0.69)–$(0.77) $(0.60)–$(0.64) Improved

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1, Q2)Current Period (Q3)Trend
Partner Ecosystem (CDWs, SIs, VARs)Pipeline grew from 0 to 60 joint CDW deals; debt refinanced to 2028 to fund partner motion; trainings across CDW sales teams Partner-sourced billings +>20% QoQ; partner pipeline +90% QoQ; 400+ partner-related opps; faster close cycles; higher win rates Accelerating
Consumption Pricing TransitionConsumption cohort retention 98% gross / 118% net in Q2; >45% ARR consumption; goal majority by year-end 100% new logos on consumption; 55% ARR consumption; targeting >60% by YE; enables vendor consolidation and wider deployments Scaling
AI/Agentic AIEarly positioning with CDWs; customer expansion from 300 analysts to 10,000 users and plan to 50,000 by 2025 “Agentic AI” go-to-market; examples of agents delivering complex reports in ~2.5 minutes; strong customer validation and regulatory transparency Growing adoption
Retention TrajectoryQ1 gross retention 83% impacted by one large nonrenewal; guide improvement In-quarter gross retention 85% with expected fluctuation 85–90%; ARR NRR 90% and improving Stabilizing
Contract Duration & RPOAverage contract duration +>10% YoY in Q2; total RPO up YoY to $358.9M Average contract length +13% YoY/+10% QoQ; subscription RPO $354.1M; >12 months $145.9M (+14% YoY) Strengthening
Capital StructureExtended debt maturity to Aug 2028; reduced cash interest (SOFR+300bps) No change; reiterated cash sufficiency and positive adjusted FCF expected in Q4 Improved flexibility
Strategic AlternativesExplicit willingness to consider sale; unique asset with NOLs; potential CDW acquirer (Q1 remarks) Focus on executing ecosystem/consumption; update expected at Q4 on pipeline translation to FY26 growth Watch

Management Commentary

  • “In Q3, we exceeded our billings, revenue and non-GAAP EPS guidance… grew our subscription RPO by 3% year-over-year… subscription RPO beyond 12 months grew 14% year-over-year.” — Josh James .
  • “Astoundingly, in just 1 quarter… average contract length increased by 13%… we now have 19 customers with over 5,000 unique users and over 100 customers with over 1,000 unique users.” — Josh James .
  • “In Q3, 100% of our new logo deals were structured as consumption contracts, which now represent 55% of our ARR… we’ve gone from 5% to… over 60% by year-end.” — Josh James .
  • “Our subscription gross margin was 82.4%… Non-GAAP operating margin was positive 2.5%… Non-GAAP net loss was $3.2 million. Net loss per share was $0.08.” — CFO Tod Crane .
  • “We currently have close to 400 partner-related opportunities… representing over 80 unique partners, 30 of which are new partners in the last 6 months.” — Josh James .
  • “Adjusted free cash flow was… lower… due to $8–$10 million of delayed cash receipts related to consumption migrations… majority… collected in Q4.” — CFO Tod Crane .

Q&A Highlights

  • Consumption cohort strength and stickiness: consumption customers show faster adoption, higher retention and better partner alignment; AI tailwinds are raising close rates where AI shows up .
  • Retention drivers and macro: retention variability due to budgets; ecosystem tailwind with CDWs improving enterprise access and credibility; top-40 ARR customers now much more stable with longer terms and fewer at-risk accounts .
  • Billings and growth trajectory: near-term billings impacted by reallocation to partner motion; management expects clearer visibility on FY2026 growth by Q4 call; capacity intentionally tuned to the partner opportunity .
  • Partner deployment velocity: partner-sourced deals close ~20 days faster; examples of multi-year, seven-figure deals from recent joint marketing; rapid expansion of sales coverage across partner teams .
  • AI timelines and financial impact: AI and partner motion expected to aid net retention and drive growth; update anticipated at next report; near-term tailwinds from passing larger churn events .

Estimates Context

  • Wall Street consensus via S&P Global for Q3 FY2025 was unavailable due to request limits at the time of retrieval; as a result, comparisons to consensus EPS and revenue are not included. Management reported beats versus company guidance for revenue and non-GAAP EPS and indicated billings performance exceeded guidance metrics .
  • Where estimates are unavailable, investors should anchor near-term expectations to company guidance and revise models for improved FY2025 revenue and EPS ranges .

Key Takeaways for Investors

  • Partner ecosystem is now a material growth lever: faster cycles, higher ASPs, and better enterprise access, supported by quantifiable pipeline expansion — a key medium-term thesis driver .
  • Consumption adoption is transforming account stability and expansion, enabling vendor consolidation and multi-use case deployments; trajectory to >60% ARR by YE improves NRR and pricing/value alignment .
  • RPO and longer contract terms de-risk forward revenue visibility; average contract length +10% QoQ/+13% YoY is a leading indicator of billings durability into FY2026 .
  • Short-term caution: cash flow timing and gross retention variability (85–90% expected) can create quarter-to-quarter noise; monitor Q4 adjusted FCF return to positive and subscription margin stability .
  • AI/Agentic AI is a credible adoption catalyst evidenced by customer outcomes and regulatory transparency claims; likely to support consumption growth and partner-led wins in 2025 .
  • Guidance quality improved: Q4 and FY2025 ranges tightened/raised; update on pipeline-to-revenue translation expected at the Q4 call — a potential near-term stock catalyst .
  • Watch for reconciliation items: press release indicates 3% non-GAAP operating margin vs CFO 2.5%; use official press release figures for modeling and note roundings in call commentary .