Executive Summary
Domo reported Q2 2025 revenue of $78.4 million, down marginally year over year (-2%), with a solid gross margin of 74.3% and a small non-GAAP operating profit (2.5% margin). The quarter featured a meaningful shift in the company’s go-to-market model toward ecosystem-led growth and a greater emphasis on consumption-based ARR, supported by an expanding partner ecosystem (CDWs such as Snowflake and Databricks, plus Google, Oracle, IBM, and others). Management pointed to a pivotal 8-figure, multi-year contract secured via consumption and a large seven-figure upsell as illustrative deployments of this strategy. At the same time, reported GAAP results remained negative, underscoring ongoing profitability and liquidity challenges typical of growth-stage SaaS firms—though the balance sheet was strengthened by a debt-refinancing initiative that extended maturities to August 2028 and reduced cash interest.
Management guided Q3 revenue of $77–$78 million (GAAP) with non-GAAP billings of $70–$75 million and a non-GAAP loss per share of $0.14–$0.18. For the full year, guidance called for roughly $305–$315 million in billings and $313–$315 million in GAAP revenue, with non-GAAP EPS of −$0.69 to −$0.77. The company expects the benefit of ecosystem-driven growth to materialize more meaningfully over the next 12–24 months as partner-driven deals convert and ARR shifts toward consumption; importantly, management reiterated its target of majority ARR on consumption by year-end. A leadership transition in the CFO role was announced, with Todd Crane assuming the CFO position while David Jolley transitions to a senior advisory role, underscoring a continued emphasis on disciplined cost management and financing flexibility.
Overall, DOMO’s QQ2 2025 results and commentary reflect a company pivoting toward scalable, partner-enabled growth, with early signs of demand generation and larger, strategic contracts. The key questions for investors remain: (1) how quickly the ecosystem-led model translates into meaningful top-line growth and improved profitability, (2) the sustainability of higher gross retention and consumption-driven ARR, and (3) the trajectory of cash flow and balance sheet health as investment in partnerships continues.
Key Performance Indicators
QoQ: 32.46% | YoY:-36.63%
QoQ: 25.06% | YoY:-21.30%
QoQ: 26.09% | YoY:-13.33%
Key Insights
Revenue: $78.4 million in Q2 2025, down 2% YoY; QoQ change approximated at -2.1% (per four-quarter data).
Gross profit: $58.283 million; gross margin 74.33% (gross margin stable at mid-70s as consumption aligns revenue with cost).
Subscription revenue: 90% of total revenue; flat YoY.
Operating income: $(14.487) million; operating margin ≈ −18.48%.
EBITDA: $(11.98) million; EBITDA margin ≈ −15.3%.
Net income: $(19.49) million; net margin ≈ −24.86%; EPS: $(0.51).
Non-GAAP metrics: non-...
Financial Highlights
Revenue: $78.4 million in Q2 2025, down 2% YoY; QoQ change approximated at -2.1% (per four-quarter data).
Gross profit: $58.283 million; gross margin 74.33% (gross margin stable at mid-70s as consumption aligns revenue with cost).
Subscription revenue: 90% of total revenue; flat YoY.
Operating income: $(14.487) million; operating margin ≈ −18.48%.
EBITDA: $(11.98) million; EBITDA margin ≈ −15.3%.
Net income: $(19.49) million; net margin ≈ −24.86%; EPS: $(0.51).
Non-GAAP metrics: non-GAAP operating margin 2.5%; non-GAAP net loss $(2.7) million; Adjusted free cash flow $(5.6) million; operating cash flow $(6.171) million; free cash flow $(8.375) million.
Liquidity and balance sheet: cash and cash equivalents $55.704 million; total assets $197.757 million; total liabilities $364.118 million; total debt $129.918 million; net debt $74.214 million; RPO $225.4 million current; total RPO $358.9 million as of July 31, 2024; ARR near $300 million; over 45% of ARR on consumption contracts; approximately two-thirds of customers on multiyear contracts; weighted average shares ≈ 38.39 million.
Guidance (Q3/FY22-23 style): Q3 non-GAAP billings of $70–$75 million; GAAP revenue of $77–$78 million; non-GAAP net loss per share of $(0.14) to $(0.18); full-year billings $305–$315 million; GAAP revenue $313–$315 million; non-GAAP net loss per share $(0.69) to $(0.77).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
78.41M |
-1.59% |
-2.12% |
| Gross Profit |
58.28M |
-3.79% |
5.80% |
| Operating Income |
-14.49M |
-36.63% |
32.46% |
| Net Income |
-19.49M |
-21.30% |
25.06% |
| EPS |
-0.51 |
-13.33% |
26.09% |
Key Financial Ratios
operatingProfitMargin
-18.5%
operatingCashFlowPerShare
$-0.16
freeCashFlowPerShare
$-0.22
Management Commentary
Theme-based insights from the earnings call and management discussion:
- Strategy and ecosystem focus: Josh James emphasized ecosystem-led growth, partnerships with CDWs such as Snowflake and Databricks, and a shift to consumption-based pricing as the core growth engine. He noted the plan to train multiple partner teams and the expectation that ecosystem collaboration will drive meaningful top-line growth over 12–24 months.
- Traction in partnerships and deals: James highlighted a seven-figure upsell and an eight-figure total contract value with a Fortune 500 customer enabled by consumption, plus the expansion of users from 300 analysts to over 10,000 across multiple use cases. The company reported over 60 joint deals in the pipeline with CDW partners and five new Domo Everywhere customers in Q2.
- Execution on cost and capital structure: CFO David Jolley discussed cost discipline and the debt refinancing (extended maturity to August 2028 with lower cash interest), and Josh James confirmed the debt amendment reduced cash interest and lowered the overall rate, improving liquidity and flexibility.
- Guidance and outlook: Management acknowledged the variability of short-term billings given the CDW-driven path to growth and highlighted that the long-run opportunity rests in ecosystem partnerships and consumption expansion. The Q3 and full-year guidance imply near-term revenue modestly defers growth while focusing on longer-term ARR and upsell potential.
- Management and organizational changes: The company announced a leadership transition with Todd Crane becoming CFO and RJ Tracy moving into the CRO role to strengthen the partner-sales alignment.
Key quotes from the call include:
- “In Q2, we exceeded our revenue guidance. Our gross retention bounced back to 88% at the high end of our guidance, which was a highlight for the quarter and a dramatic improvement over the last few quarters.” (Josh James)
- “We refinanced our debt to extend the maturity date to August 2028 and reduced our overall interest rate and our cash interest rate.” (David Jolley)
"In Q2, we exceeded our revenue guidance. Our gross retention bounced back to 88% at the high end of our guidance, which was a highlight for the quarter and a dramatic improvement over the last few quarters."
— Josh James
"We refinanced our debt to extend the maturity date to August 2028 and reduced our overall interest rate and our cash interest rate."
— David Jolley
Forward Guidance
Assessment of near-term and longer-term outlook based on management guidance and industry context:
- Near-term view: Q3 guidance implies limited sequential revenue acceleration, with GAAP revenue guided to $77–$78 million and non-GAAP billings of $70–$75 million. The company remains in a net loss position on GAAP terms, with non-GAAP losses projected to narrow but still present (−$0.14 to −$0.18 per share in Q3).
- Longer-term thesis: The ecosystem-led growth model, anchored by CDW partnerships (Snowflake, Databricks, Google, Oracle, IBM, Dremio) and a growing consumption base, is intended to drive a material expansion in ARR and cross-sell opportunities. Management targets the majority of ARR on consumption by year-end, with 45% already under consumption contracts, suggesting a meaningful shift in revenue mix over the next 12–24 months.
- Key risk factors to monitor: (1) execution risk in converting partner-led pipeline into billings (the company noted a multi-quarter ramp to meaningful growth), (2) sustainability of gross retention and net retention in a challenging macro environment, (3) the pace at which large multiyear/8-figure contracts translate into continued usage and upsell, and (4) potential fluctuations in customer concentration given a few large deals.
- Bottom line: If the ecosystem and consumption initiatives achieve their desired scale, DOMO could see a pronounced improvement in ARR mix, higher retention, and a move toward profitability; however, investors should monitor the speed of revenue growth, realization of large deals, and continued cash burn in the near term. Key factors to watch include the cadence of partner-driven deal closures, the evolution of ARR on consumption versus license-based ARR, and the effectiveness of the new CFO/COO leadership in driving cost efficiency and capital allocation.