Beats On Revenue, Stock Jumps 31.3%

Business intelligence platform Domo (NASDAQ:DOMO) reported revenue ahead of Wall Street’s expectations in Q4 CY2025, with sales up 1.1% year on year to $79.63 million. Its non-GAAP profit of $0.03 per share was significantly above analysts’ consensus estimates.

Is now the time to buy Domo? Find out in our full research report.

• Revenue: $79.63 million vs analyst estimates of $78.62 million (1.1% year-on-year growth, 1.3% beat)

• Adjusted EPS: $0.03 vs analyst estimates of -$0.03 (significant beat)

• Adjusted Operating Income: $8.13 million vs analyst estimates of $3.86 million (10.2% margin, significant beat)

• Operating Margin: -13.3%, up from -15.6% in the same quarter last year

• Free Cash Flow was -$5.34 million, down from $2.07 million in the previous quarter

• Billings: $111.2 million at quarter end, up 8.4% year on year

• Market Capitalization: $178.5 million

“We delivered our highest quarterly billings ever and our highest gross retention rate in over three years, reflecting strong demand from customers and the growing role Domo plays in their AI strategies,” said Josh James, founder and CEO of Domo.

Named for the Japanese word meaning “thank you very much,” Domo (NASDAQ:DOMO) provides a cloud-based business intelligence platform that connects people with real-time data and insights across organizations.

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Domo’s 8.7% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the software sector and is a rough starting point for our analysis.

Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Domo’s recent performance shows its demand has slowed as its revenue was flat over the last two years.

This quarter, Domo reported modest year-on-year revenue growth of 1.1% but beat Wall Street’s estimates by 1.3%.

Looking ahead, sell-side analysts expect revenue to grow 2.3% over the next 12 months. While this projection implies its newer products and services will spur better top-line performance, it is still below the sector average.

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Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

Domo’s billings came in at $111.2 million in Q4, and over the last four quarters, its growth was underwhelming as it averaged 2% year-on-year increases. This performance mirrored its total sales and suggests that increasing competition is causing challenges in acquiring/retaining customers.

The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.

Domo’s recent customer acquisition efforts haven’t yielded returns as its CAC payback period was negative this quarter, meaning its incremental sales and marketing investments outpaced its revenue. The company’s inefficiency indicates it operates in a highly competitive environment where there is little differentiation between Domo’s products and its peers.

It was encouraging to see Domo beat analysts’ billings expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 31.3% to $5.76 immediately after reporting.

Sure, Domo had a solid quarter, but if we look at the bigger picture, is this stock a buy? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.