# Domo Reports Significant Growth in Customer Transition to Consumption Model

Over the past 21 months, Domo has made considerable strides in enhancing customer relationships and shifting its customer base to a consumption-based model. This shift has allowed Domo to track the health of customer relationships through metrics like user growth, logins, and cards created. Consumption customers are adopting Domo more widely in their organizations compared to traditional seat-based customers, placing Domo in a stronger position for customer retention and upsells.

In fiscal year ’25, the consumption customer cohort achieved impressive retention rates, with gross retention exceeding 90% and net retention surpassing 100%. The transition to consumption has progressed remarkably, moving from 5% of Annual Recurring Revenue (ARR) two years ago to 25% at the end of fiscal year ’24, and now exceeding 65% at the close of fiscal year ’25. Looking ahead, there’s optimism that this figure could reach close to 90% by the end of fiscal year ’26. This rapid transformation is largely credited to the efforts of all Domo employees.

Another significant move to enhance retention is focused on improving customer satisfaction. This strategy aims to lead to longer contract terms for both renewals and new agreements. Domo has successfully increased the number of clients entering multi-year contracts, which could contribute at least two percentage points to the gross retention rate in fiscal year ’26 compared to fiscal year ’25.

Growth Initiatives and Ecosystem Development

Domo’s primary growth initiatives for fiscal year ’25 included building out its partner network, integrating artificial intelligence (AI) innovations throughout the platform, and transitioning customers to consumption pricing. At the year’s outset, Domo emphasized that it would be the “year of the ecosystem.” Throughout the year, partners have provided high-quality leads and facilitated new Annual Contract Value (ACV) closures.

To support these objectives, Domo has reallocated engineering resources to ensure better integration with partner technology and redirected sales efforts towards partner enablement. The primary partner focus has been with cloud-based data warehouses (CDWs), which have become central to Domo’s ecosystem. Domo’s vision and platform position it as an ideal partner in this growing market.

As businesses increasingly recognize the importance of AI and digital transformation, many are leveraging Domo’s capabilities to create exceptional experiences hosted on partner CDWs. Domo is designed to quickly ingest, store, prepare, visualize, and analyze large data sets within a modern cloud-based framework. This setup allows customers to implement efficient data analytics solutions or harness new AI opportunities with just their chosen CDW and Domo, eliminating the need for multiple vendor solutions. Since launching its first CDW partnership in June 2024, Domo has become involved in numerous strategic data conversations.

Case Studies of Success with CDW Partnerships

Several recent deals underscore the success Domo has experienced with its CDW partners. For instance, one entertainment company opted for Domo after finding its data siloed and its legacy business intelligence (BI) solutions underutilized. The desire for a unified BI technology stack drove this decision, with Domo’s strong ETL capabilities and seamless integration with the CDW partner being critical factors in winning the business. The company ultimately replaced its entire legacy BI stack, including Power BI, with Domo’s solutions.

Another notable example is an engineering firm that selected Domo and its CDW partner to modernize its existing systems driven by the need of new facilities. Following a proof of concept, the company chose Domo based on performance and ease in creating analytics for its growing operations. A rapidly expanding retail franchise management company also turned to Domo for a solution that could effectively track franchise metrics. They were drawn to Domo’s capabilities combined with the robustness of the partner’s backend, resulting in a comprehensive and integrated business solution.

These examples reflect the impressive new logos Domo secured in Q4, all of which involved collaboration with CDW partners and strategic system integrators (SIs). SIs play a vital role within the data landscape, providing expert recommendations and driving lead flow, which enhances Domo’s pipeline. In fiscal year ’25, Domo onboarded over 10 CDW SI partners, several being leading implementers of the partner technologies.

Capitalizing on Domo Everywhere for Enhanced Customer Solutions

Another growth opportunity lies in Domo Everywhere, allowing customers to offer powerful data solutions to their clients through B2B2B or B2B2C setups. Many organizations struggle to unlock the full value of data for their customers, and Domo Everywhere addresses this gap by embedding insights into existing applications. This strategic partnership offers competitive differentiation, cost savings, and monetization opportunities, leading to several multi-million dollar contracts from Domo Everywhere.

For instance, a cloud-based legal case management software provider that has relied on Domo for years expanded its collaboration to enhance case management analytics for clients. This evolution not only helped the partner offset data costs but also generated significant revenue by supplying analytic offerings powered by Domo. Moreover, numerous clients from this partnership have subsequently become direct Domo customers, contributing to Domo’s revenue growth.

Despite the challenging software spending environment, Domo identifies AI enablement as a key growth catalyst, as companies are actively looking to invest in such technologies. Moving forward, Domo is well-positioned to leverage these trends and continue driving growth initiatives successfully.

Domo Reports Strong Q4 Growth Driven by AI and Data Solutions

Over the past year, artificial intelligence (AI) has dominated discussions within technology spending and roadmaps. Companies across sectors are recognizing AI’s potential, with Domo positioned to lead this shift thanks to its enterprise-grade access to data products.

Domo’s Platform Leverages AI to Drive Business Value

Domo has integrated AI solutions such as recommendation engines, machine learning algorithms, and agent-like workflows into its platform long before AI took the spotlight. This integration enables rapid innovation while ensuring a safe and governed approach to data access. Currently, we are at a crucial junction where data and intelligence converge to deliver substantial business insights, and Domo believes it is exceptionally well-positioned to capitalize on this trend.

In Q4, Domo AI earned notable industry accolades, including the 2025 DEVIES Award for data analytics and visualization, the 2024 KMWorld Readers’ Choice Award for Best AI, and inclusion in Database Trends and Application Magazine’s trend-setting products list for 2025. Domo excels in connecting disparate data within organizations—an area where many data scientists struggle. Importantly, we empower customers not just to access their data but also to transform it into AI-ready formats. Understanding the market’s demand for flexibility, we offer various models developed across leading cloud data warehouses (CDWs) such as Snowflake, Databricks, Oracle, Google, and Amazon.

Launch of AI Services Layer

Early last year, Domo introduced an AI services layer that permits customers to choose preferred models in a secure and well-governed environment. Our platform’s capability to access and curate proprietary data for AI usage, apply models for insights, and deliver these insights directly to business units exemplifies a core competency of Domo. Customers increasingly demand a clear return on investment (ROI) from their AI expenditures, and Domo’s offerings are designed to deliver on that front immediately.

Customer feedback indicates positive reception toward both Domo’s AI platform and its ease of access. The platform facilitates the creation of AI agents and AI-driven workflows that perform automated tasks, significantly enhancing efficiency. Established workflows combined with our AI services layer allow for rapid innovation in agentic AI solutions, which are gaining traction among our client base.

Consumption Model and Long-Term Relationships

In summary, Domo’s AI and data products platform empowers users to leverage AI and data for innovative applications that yield measurable outcomes. The transition to a consumption-based model has resulted in a better alignment of pricing with value, fostering quicker adoption while keeping in line with our partners’ expectations. This approach supports product-led growth, as many customers remain unaware of the extensive features our platform offers.

Providing unlimited platform access enhances discoverability, thus driving adoption. This consumption model nurtures long-term, strategic relationships, demonstrated by a 38% increase in long-term subscription remaining performance obligations (RPO). For example, a packaging company recently replaced Power BI with Domo in a five-year contract worth nearly seven figures. The decision was based on Domo’s ability to provide faster value and integrate acquired company data seamlessly into their primary ERP system.

Acknowledgment of Industry Recognition

Beyond the accolades already mentioned, Domo distinguished itself in multiple industry awards, including five Dresner Advisory Services Technology Innovation Awards, marking our eighth consecutive year as a multi-category award winner. Recognized as a top vendor across analytics platforms, cloud computing, business intelligence, and embedded BI, Domo continues to assert its leadership.

Additionally, Domo received commendations in five key 2024 Information Services Group Analytics and Data Buyer guides, scoring an A- in the customer experience and total cost of ownership (TCO) ROI categories. Research by Nucleus found that Domo customers report an impressive return of nearly $7 for each dollar invested in our AI and data platforms, with benefits like a 35% increase in user productivity, 20% in technology cost savings, and a 15% increase in revenue.

Looking Ahead and Annual User Conference

We are excited to host our annual user conference, Domopalooza, from March 18th to 21st in Salt Lake City, featuring new product announcements and notable customer stories from firms such as Samsung, Lenovo, and Sony. We anticipate engaging with many attendees and facilitating valuable connections within our customer ecosystem.

As I reflect on our Q4 results, I am optimistic about the strategic moves we are making to resume efficient growth. In fiscal year ’26, our focus will remain on enhancing partner relations, scaling AI capabilities, and transitioning our customer base fully to a consumption model. Financially, I expect to witness the onset of growth acceleration while maintaining strong cash generation.

The strides we’ve made in the past year set a robust foundation for sustainable long-term growth. With that, I turn the discussion over to our chief financial officer, Tod Crane.

Tod Crane — Chief Financial Officer

Thank you, Josh. In Q4, we surpassed our guidance for billings, revenue, non-GAAP EPS, and adjusted free cash flow. Total revenue reached $78.8 million, deriving 91% from subscription services. Billings for Q4 totaled $102.6 million.

We experienced a notable year-over-year increase in sales rep productivity, with Q3 being the best performance in four years. This trend continued in Q4, further emphasizing our commitment to achieving efficient growth. Ending the quarter, total subscription RPO stood at $403.6 million, reflecting a 14% year-over-year increase, marking our strongest RPO growth in over two years.

Subscription RPO beyond 12 months grew 38% year-over-year, with an increasing average contract length across our customer base, further contributing to a strong retention rate.

Company Reports Strong Q4 Results with Promising Retention Metrics

In Q4, the gross retention rate held steady at 85%, marking the third consecutive quarter at this level. This performance indicates a notable improvement compared to previous results. Looking ahead, we expect gross retention to remain stable in Q1 with forecasts suggesting a minimum 2 percentage-point increase for FY ’26, aligning with our long-term objective of achieving 90% gross retention.

Our annual recurring revenue (ARR) net retention improved year-over-year for the second consecutive quarter. We believe that customer consumption patterns will serve as a beneficial factor for both gross and net retention. Specifically, consumption customers exhibited gross retention rates exceeding 90% and net retention rates beyond 100% in FY ’25, notably outperforming our seat-based customer cohort. As we progress into FY ’26, consumption renewals are expected to constitute a larger share of our overall renewal base, thus positively impacting our retention metrics.

In Q4, we reported adjusted free cash flow of $6 million, a significant jump from Q3. Our cash balance increased from $40.9 million in Q3 to $45.3 million in Q4. We anticipate being cash flow positive in both Q1 and throughout FY ’26. Analyzing margins and profitability reveals our subscription gross margin at 81.4%. This represents a sequential decline, largely due to the timing of capitalized software amortization. We expect this margin metric to stabilize in the low-80s in the near to medium term, with aspirations to return to mid-80s levels long-term.

The non-GAAP operating margin was recorded at 4.1%, with a non-GAAP net loss of $1.8 million. The non-GAAP net loss per share stood at $0.05, based on a weighted average of 39.3 million shares outstanding. Given the company’s net loss position, basic and diluted shares are equal. For our guidance, we anticipate total billings between $310 million to $320 million, GAAP revenue of $310 million to $318 million, and non-GAAP net loss per share between $0.29 to $0.39, with expectations assuming 40.9 million shares outstanding.

Our projected FY ’26 earnings per share guidance suggests an operating margin of 2%, an increase from breakeven in FY ’25. For Q1, we forecast billings in the range of $62 million to $63 million, GAAP revenue between $77.5 million and $78.5 million, and a non-GAAP net loss per share between $0.18 and $0.22, based on an average of 39.7 million shares outstanding. It is noteworthy that our Q1 billings guidance factors in approximately $5 million of renewals that have been pushed from Q1 to other quarters in FY ’26, attributed to consumption conversions made in FY ’25. This timing issue is purely administrative.

For Q2, we anticipate low single-digit growth in billings, followed by a consistent acceleration in billings growth for the remainder of the fiscal year. In conclusion, I am pleased with the advancements we have made in developing a robust growth engine. The strategies we’ve implemented over the past year position us favorably for enhanced growth and profitability in FY ’26. Now, I will open the call for questions. Operator?

Questions & Answers:

Operator

[Operator instructions] Our first question is from Patrick Walravens with Citizens JMP. Please proceed.

Patrick Walravens — Analyst

Thank you, and congratulations on a solid quarter. Can you share insights on how the current macro environment, especially the rapid changes from Washington, D.C., are influencing your customers’ purchasing decisions?

Joshua G. James — Founder, Chief Executive Officer, and Director

In recent years, purchasing activities have become well-organized and meticulously planned, with ample authorizations. There is minimal room for unplanned expenditures currently. When clients do decide to invest in our solutions, they are typically driven by solid metrics on their end, reflecting a consistency similar to past experiences.

RJ, would you like to add your perspective?

RJ Tracy — Chief Revenue Officer

Absolutely. We have observed these trends over the last few years. However, we have not seen any immediate impacts from recent developments; we are continually monitoring the situation.

Patrick Walravens — Analyst

Now, Tod, I would like to hear about the relationship between renewals and consumption, particularly regarding the $5 million shift you mentioned. Additionally, what are your thoughts on the company’s cash position and balance sheet?

Tod Crane — Chief Financial Officer

Thanks, Pat. Regarding the shift, during our discussions about consumption conversions this past year, we often reset customers’ renewal dates to accommodate these changes. For instance, if a customer typically renewed in Q1, a conversion conversation in the middle of their contract may push that renewal into Q2 or later. We experienced a greater shift in renewal timing last year compared to usual, resulting in the $5 million transition from Q1 to other quarters.

As for our balance sheet, I’m pleased with the Q4 cash flow result. The $6 million free cash flow reflects our highest result historically. Our cash balance has risen from approximately $40 million to over $45 million during the quarter. We carry about $120 million in debt, which provides us with more than four years to manage. Our primary focus remains on driving growth while simultaneously generating cash to strengthen our balance sheet.

Patrick Walravens — Analyst

Thank you, everyone.

Tod Crane — Chief Financial Officer

Thank you, Pat.

Operator

[Operator instructions] Our next question is from Derrick Wood with TD Securities. Please proceed.

Jared Levine — Analyst

Hi, team. This is Jared Jungjohann on behalf of Derrick Wood. Can you elaborate on your partnerships with Snowflake and Databricks? How has deal activity with them compared to your expectations?

Joshua G. James — Founder, Chief Executive Officer, and Director

This past year, we made significant internal and external moves to restructure our focus on ecosystem engagement—not just for our product offerings, but enhancing customer experience and our market strategy. Our efforts have yielded substantial progress, and we believe we are well-positioned to leverage these initiatives moving forward.

Strong Growth Signals: Insights into Ecosystem Success and Sales Strategies

The company has observed promising trends that underscore its growth trajectory. Recent data highlights that leads generated from its ecosystem demonstrate a conversion rate approximately five times higher than independent leads. This indicates that a single ecosystem lead equates to five leads generated independently in terms of value. Furthermore, for leads classified as stage three—those in the sales pipeline—close rates from the ecosystem are between two to three times higher than average.

There’s significant activity not only among the CDWs (Collaborative Data Workflows) but across the entire partner ecosystem. Last year, the company added numerous partners, ranging from CDWs to System Integrators (SIs) and even those emerging through Domo Everywhere. The surge in conversion rates from these partnerships is particularly noteworthy.

Building a robust pipeline is currently a priority. Just last quarter, the company began accelerating its pipeline development, and expectations are high for Q3 and Q4. The management is optimistic about closing more deals as the quarter progresses, which could positively influence billings beyond initial forecasts.

Looking ahead, the company hopes to announce improved guidance for Q3 and Q4 based on trends seen within the partner network. High close rates and notable performance metrics indicate that the company is on the right track, though management remains cautious in adjusting projections prematurely.

Tod Crane — Chief Financial Officer

Crane emphasized the significance of new business, suggesting while it may not drastically impact overall billings, it represents a vital percentage of new revenue. The current trends suggest that a significant share of this revenue will come from the partner ecosystem, providing confidence for future growth.

Joshua G. James — Founder, Chief Executive Officer, and Director

James reiterated the potential for substantial revenue growth tied to new business during this fiscal year. Should this materialize, it would bolster confidence for stronger growth in the following fiscal year. He noted that while they have seen promising indicators, they are not yet prepared to increase guidance. The management team aims to have enough concrete data from Q1 and Q2 to make informed decisions about future projections.

James further discussed the company’s go-to-market strategy. There will be a continued focus on ecosystem partnerships. Hiring efforts will prioritize candidates with experience in this arena, including those familiar with CDWs. Alongside these adjustments, a strong emphasis will be placed on customer adoption, shifting from selling ideas to helping customers effectively use products.

Transitioning to a consumption-oriented business model allows customers to engage without confronting high upfront costs, making it easier for sales teams. This strategy is anticipated to enhance customer satisfaction and, ultimately, consumption levels.

Operator

Next, we have a question from Yi Fu Lee with Cantor Fitzgerald. Please proceed.

Yi Fu Lee — Cantor Fitzgerald — Analyst

Thank you for the update, and congratulations on the successful end to fiscal ’25. I have a couple of questions for both Josh and Tod. Reflecting on the partner ecosystem, could you elaborate on the transition from a consumption to a partnership model involving CDW partners, ISVs, hyperscalers, and SIs? Furthermore, can you provide insights on the potential impact of a recent seven-figure deal?

Joshua G. James — Founder, Chief Executive Officer, and Director

Thank you for your question. There are indeed nuances to our partnerships, especially with CDWs and SIs. Most activity is seen from the CDWs, but it’s the synergy between CDWs and SIs that often drives success. Notably, we maintain relationships with many leading SIs, providing a competitive advantage.

In summary, the current momentum within our ecosystem is encouraging. By continuing to focus on our partnerships, refining our sales approach, and enhancing product adoption, we are positioned for sustained growth.

Domo Positioned for Growth with Strategic Partnerships and Positive Feedback

In a recent update, company leaders expressed optimism about their partnerships and the favorable feedback from System Integrators (SIs). One SI reported evaluating vendors and placed Domo at the top, noting a significant gap compared to competitors. This acknowledgment is encouraging and indicates a strong market positioning for Domo.

As Domo expands its reach, particularly through its Domo Everywhere initiative, the company has secured valuable customers and lucrative deals. Insights gained this past quarter have heightened awareness of both opportunities and potential product improvements. Feedback from customers highlighted key areas for improvement, prompting Domo to focus on refining its offerings.

This collaboration creates a win-win situation. Domo helps partners expedite their go-to-market strategies, enhancing customer satisfaction through data delivery while supporting revenue generation with analytical add-ons. Customers benefit by recouping their initial investment in Domo and, in many cases, achieving significant profit margins.

For Domo, these collaborations translate into substantial deals, some reaching multi-million dollar values. The company remains enthusiastic about the partnerships forming within its ecosystem, signaling robust market engagement.

Strategic Growth with Cloud Data Warehouses

Yi Fu Lee — Cantor Fitzgerald — Analyst
Can you discuss the recent addition of Databricks to your partnerships? How does this enhance your integration with other cloud data warehouses (CDWs)?

Joshua G. James — Founder, Chief Executive Officer, and Director
Indeed, we are not onboarding all partners simultaneously. Our relationships with certain CDWs are more robust than with others. Currently, we have substantial engagements with five CDWs, involving executive discussions, customer collaboration, and technical alignments to ensure seamless product integration. Limited resources mean we must focus our efforts where we are seeing the most momentum, particularly with Databricks, which has demonstrated quick adaptation and positive interactions.

RJ Tracy — Chief Revenue Officer
Removing unnecessary friction from the sales cycle is a critical focus. This friction was not intended, but by addressing it, we enhance relationships with customers and SIs. Each CDW brings unique strengths, allowing us to work collaboratively, ensuring that clients receive maximum value from their data.

Future M&A Considerations

Yi Fu Lee — Cantor Fitzgerald — Analyst
We’ve seen IBM’s acquisition of DataStax and Snowflake’s interest in Redpanda. Has this prompted more discussions about mergers and acquisitions (M&A) in your sector?

Joshua G. James — Founder, Chief Executive Officer, and Director
We are open to exploring M&A opportunities, particularly to maximize Domo’s potential. Building relationships with multiple CDWs is essential, and recognizing our value within this ecosystem has been significant. A recent comment from one CDW highlighted that our partnership effectively addresses their competitive challenges, bridging the gap in ease of use. As a neutral, independent entity, Domo stands apart, offering comprehensive solutions without competing against our partners. This independence positions us favorably in the landscape, as clients increasingly see the advantages of streamlined, governed, and secure data products.

The next steps involve enhancing our technology to facilitate smoother operations with CDWs by the year-end. The outlook appears positive as Domo continues to strengthen its relationships with various cloud providers.

Strategic Insights from Domo’s Latest Earnings Call

During a recent earnings call, Joshua G. James, the Founder, Chief Executive Officer, and Director of Domo, discussed the company’s positioning in the market and the evolving landscape. Notably, he expressed confidence that competitors feel pressured by Domo’s offerings. He stated, “If along the way, there’s consolidation in our space, we expect to be well-placed with several parties recognizing the value we provide to their customers.”

Financial Guidance and Market Position

Yi Fu Lee of Cantor Fitzgerald raised a question regarding financial forecasts. He acknowledged Domo’s efforts to establish a strong pipeline for the third and fourth quarters. Yi noted, “This could allow adjustments to guidance as circumstances evolve.” He expressed particular interest in understanding what factors Tod Crane, the Chief Financial Officer, identifies as potential indicators for raising guidance as the year progresses.

Confidence in Revenue Streams

Tod Crane responded by highlighting the steady flow of leads from partners, emphasizing their importance in Domo’s growth strategy. “The conversion rates for partner deals are significantly higher than those for nonpartner transactions,” he explained. He added that the company seeks more predictability in lead volumes to strengthen their guidance for the latter half of the year. “Once we have a clearer understanding of lead volume, we will be able to confidently adjust our forecasts,” Tod affirmed.

Closing Remarks

As the call concluded, Yi Fu Lee thanked both Tod and Joshua for their insights. Joshua G. James assured participants that they would reconvene soon, wrapping up the session effectively.

Operator

With no additional questions, this wraps today’s conference call. [Operator signoff]

Call Participants:

Peter Lowry — Vice President, Investor Relations

Joshua G. James — Founder, Chief Executive Officer, and Director

Tod Crane — Chief Financial Officer

Patrick Walravens — Analyst

Josh James — Founder, Chief Executive Officer, and Director

RJ Tracy — Chief Revenue Officer

Pat Walravens — Analyst

Jared Levine — Analyst

Jared Jungjohann — Analyst

Yi Fu Lee — Cantor Fitzgerald — Analyst

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