Domo at TD Cowen Conference: Strategic Growth and Partnerships

On Thursday, 29 May 2025, Domo Inc (NASDAQ:DOMO) presented at TD Cowen’s 53rd Annual Technology, Media & Telecom Conference 2025, showcasing its strategic growth and partnership-driven initiatives. Led by CFO Todd Crane, Domo highlighted its strong Q1 performance, exceeding expectations in key financial metrics, while also acknowledging the challenges posed by macroeconomic factors. The company’s focus on ecosystem partnerships and a consumption-based pricing model was underscored as a key driver of its competitive edge.

Key Takeaways

• Domo surpassed its Q1 guidance on billings, revenue, and EPS.
• Strategic partnerships with Snowflake and Databricks have significantly boosted the ecosystem pipeline.
• The company is targeting 90% of ARR through its consumption-based pricing model by year-end.
• Domo aims for "five and five" growth and margin in Q4 2025 and "ten and ten" in Q4 2026.
• Gross margin is expected to improve as the consumption model matures.

Financial Results

• Q1 2025 Performance:

- Billings, revenue, and EPS exceeded guidance.

- Subscription RPO increased by 24% year-over-year.

- Current RPO rose by 5%.

- Net retention grew for the third consecutive quarter.

- ARR experienced a sequential uptick.

- Sales rep productivity surged by 60% year-over-year.

- Gross retention was at 86%, above the guided 85%.

Operational Updates

• Strategic Partnerships:

- Ecosystem pipeline grew over 200% sequentially from Q4 to Q1.

- Partnerships with Snowflake and Databricks are central, with dedicated co-selling teams.

• Consumption-Based Pricing Model:

- 70% of ARR is currently on the consumption model, aiming for 90% by year-end.

- The model supports access to Domo’s full platform, including advanced AI features.

Future Outlook

• Guidance:

- Targeting "five and five" (5% growth and 5% margin) for Q4 2025.

- Aiming for "ten and ten" (10% growth and 10% margin) for Q4 2026.

• Growth Strategy:

- Increasing hiring of sales reps with ecosystem experience.

- Maintaining flat operational expenses through strategic resource allocation and AI-driven automation.

• Gross Margin:

- Stabilized at 81.5% to 82% in the short term, with expected improvement as the consumption model matures.

Q&A Highlights

• Partnerships:

- Opportunities at the Snowflake Conference to expand relationships.

- Informatica acquisition seen as reducing competition.

- Continued investment in Databricks with strong integration planned.

• Macro Environment:

- Domo’s customer base is diversified across industries.

- Limited impact from tariffs, with minor concerns from manufacturing customers.

• Pricing:

- Expansion of the consumption model, monetizing through credit consumption.

In conclusion, Domo’s strategic initiatives and strong Q1 performance position it well for future growth. For a deeper dive into the conference call, please refer to the full transcript below.

Full transcript - TD Cowen’s 53rd Annual Technology, Media & Telecom Conference 2025:

Derek Wood, Senior Analyst: Thanks for coming in, everybody. I’m Derek Wood, senior analyst covering the enterprise software sector. Sector. With us today, we have Todd Crane, CFO of Domo. Todd, thanks for coming.

Todd Crane, CFO, Domo: Absolutely. Thanks for having us, Derek.

Derek Wood, Senior Analyst: Let’s start with your stock has made a very big move over the last few days. Some pretty exciting things to talk about, especially with regards to your pipeline. But let’s just talk let’s start with the highlights of Q1 and kind of what you’re seeing in the macro.

Todd Crane, CFO, Domo: Yeah. So q one, very, very happy that we exceeded our guidance on billings, revenue, EPS. So kind of up and down the board, a good solid beat on all the the the metrics there. Some of the other metrics where we’ve been really pleased with are RPO, our subscription RPO in particular up 24% year over year, accelerated from 14 last quarter. And of that, the current RPO was up 5%, which is notable.

Our current RPO is a pretty good indicator of kind of where your you know, your revenue growth is headed over time. And and so we’re really pleased to see that bump up into the mid single digits. You know, net retention was up sequentially for the third quarter in a row. ARR ticked up sequentially for the first time in a while. Rep productivity up 60% year over year.

That’s of course a really good one from the CFO perspective, seeing the sales force be productive, being able to do more with less, being able to get the growth going in the right direction while also expanding margins, know, that’s what we want to see. Wow.

Derek Wood, Senior Analyst: A lot of goodness. So it seems like the macro is not, you know, having any impact on sales cycles demand in any material way?

Todd Crane, CFO, Domo: Yeah. I mean, feels like it’s just been steady. It feels like it’s been consistent. We continue to see, you know, a little bit higher scrutiny from CFOs and other, you know, people in the deal process more than it was, you know, four or five years ago. But it’s it’s been pretty steady state, And I’ve seen our sales team do a really good job adapting to kind of this new normal, and and we’re finding ways to to navigate through that.

Derek Wood, Senior Analyst: The that CRPO number, 5%, I think it was flat the quarter before. So that’s a nice, you know, decent bump. Was that any any more color around kind of how that backlog really ticked?

Todd Crane, CFO, Domo: Yeah. I think the the the main factor there is improving gross retention. You know, long term, we obviously want our gross retention 90% or higher, but we’ve had four quarters in a row at 85% or higher. 86% this last quarter versus 85% is kind of what we what we guided to, what we expected. So nice to see that coming higher than expected.

So improving gross retention is helping the current RPO. The other thing is as we’ve focused on multi year contracts and grown overall RPO, just extending out those contract terms, that’s going to benefit your current RPO as well.

Derek Wood, Senior Analyst: And why? I mean, so there’s clearly customers, I mean, when you look at the current versus total, customers are committing to longer contracts. Yes. Why is that happening?

Todd Crane, CFO, Domo: Yeah. I mean, that’s it’s a testament. You know, it’s it’s one thing internally to focus on. Yeah. We want to do more multi year deals, but it’s you can slide a piece of paper across the table, but at the end of the day, the customer Right.

Has to put pen to paper and sign that deal. And they’re only gonna do that if they’re if they view this purchase and they view this product as a long term bet, if they’re if they’re viewing this as a platform that they can really build around long term in their company. So I think more than anything, I think the growth in RPO is a testament to the strength of the the customer relationships we have and the way they’re viewing our platform is an opportunity to, you know, one, ROI they get from platform, but an opportunity over time to consolidate workloads and consolidate use cases onto our platform. Okay.

Derek Wood, Senior Analyst: There were some one time ease in the quarter, I think. But you guys called out, I mean, now that you’re in a consumption model, there’s overage dynamics. And then, you know, there can be some lumpiness on the professional services side. So unpack kind of what you saw, kind of how that impacted and why in Q1.

Todd Crane, CFO, Domo: Yeah. So we had a good service this quarter, had some bigger projects get delivered in the quarter, which contributed to a higher services revenue result. But on the on the subscription side, there we did mention there was a little bit of overage impact from consumption. Nothing, you know, huge, but it’s there. And that’s not something that we’re including in our guidance.

It’s a little bit, you know, unpredictable. We don’t have a ton of history with it yet. But overall, I mean, the core metrics of the business, the underlying core metrics, you know, net retention ticking up, ARR ticking up, current RPO ticking up, all those things are pointing to, you know, all the needles are pointing in the right direction for subscription revenue going forward.

Derek Wood, Senior Analyst: Yeah. And kind of what causes overage? And now that we’ve to think about that as part of the model.

Todd Crane, CFO, Domo: Yeah. So the way we prefer to handle the overages is to sit down with the customer and say, hey, great news. You’re using our product, you’re clearly getting a lot of value out of it. Let’s talk about what the go forward look looks like. Let’s get you into a higher volume tier.

Let’s get you a better price per credit, and and get you into a long term deal and really, you know, establish this partnership with you. But occasionally, customers say, hey, I can’t commit to more spend until we get into the next budget year. Just send me the overage. I’ll pay it. We’ll deal with it later.

So we do have that Yeah. Kind of as, you know, the happens much less often than us working out an upsell deal. So

Derek Wood, Senior Analyst: think the big news was, I mean, so CRPO, net revenue retention all going in the right direction. But the big news was the guidance for Q4 this year and the decision to guide for Q4 next year on kind of billings and margins. What gave you guys the confidence to come out, especially on that top line side of things, to come out with those you know, kind of medium longer term.

Todd Crane, CFO, Domo: Yeah. Yeah. I mean, really, it’s the strength in the pipeline and specifically the pipeline that’s coming in from the ecosystem. So, as you know, we’ve been working really hard on adding kind of a whole new layer to our go to market approach. You know, two, three years ago, it was clear that companies like Snowflake and Databricks were becoming kind of this new center of gravity in the in the data space.

And we were being viewed as competitive to them rather than complementary. And now that we’re shifting our approach, we’ve re architected our product to to work seamlessly with with their products. We’re able to go to market jointly, with them which, you know, and and we’ve we’ve implemented these overlay teams on our partner team that are out there interfacing specifically with Snowflake. That’s kind of the biggest one that we’ve been working with. But the lead flow from them, the pipeline that we’re seeing from them on a number of metrics, the pipeline from ecosystem was up over 200%, in q one versus q four.

So the trajectory is really really strong and healthy. So as we look at that, the way that’s the and we’re monitoring that week by week as we see those leads come in and and deals progress through the pipeline. We’re seeing bigger deals. We’re seeing deals close faster. So the strength of the pipeline, and also the strength in the core business that we’re seeing, the efficiency we’re seeing out of our reps, that’s giving us confidence that we can lean in and hire some reps.

So all that combines to us feeling comfortable guiding to the five and five for q four this year and ten and ten for q

Derek Wood, Senior Analyst: four next year. Wow. And 200% sequential growth in pipeline from the ecosystem.

Todd Crane, CFO, Domo: That’s right. Wow. Ecosystem.

Derek Wood, Senior Analyst: Now, is that that kind of higher volume or is that like some chunky larger deals

Todd Crane, CFO, Domo: really it’s pretty in line with what we’ve had previously. So not a massive shift, slightly bigger deals but nothing drastically different from the average deal size we’ve experienced in the past. So it is it is it’s not one or two big deals. It’s it’s a nice steady stream of deals that are kind of in line with what we’ve done in the past.

Derek Wood, Senior Analyst: Okay. So I guess just kind of double clicking on that. So kind of putting some numbers around it, I think at the Analyst Day this year, talked about 20 Snowflake go to market teams that are now What are they doing? They’re now kind of involved with co selling Domo or co selling with Domo reps? Put some numbers around that.

Todd Crane, CFO, Domo: Yeah. So we’ve we’ve got a team of reps that that their whole job is to get out there in the field and be involved with the snowflake teams to be attending their QBRs, you know, going on-site with customers with them, just really getting deeply embedded in their process. And and kind of the the way I think about these partner relationships, it really comes down to three things. It’s the relationship, it’s the education, and the enablement. So we’ve been, working for a year plus on building those really strong relationships and I feel like we’re getting to a good spot there.

The education is still a big part of it too. Like, we’ve got to help them understand how our product works with their product, why it’s easier to sell Snowflake plus Domo or Databricks plus Domo rather than Databricks plus Fivetran Matillion, you know, five or six other tools that you have to kind of cobble together to create the same experience that you get with their CDW and our product. So working through that education process and then of course enabling them and helping them understand the possibilities there. So just constantly making more and more progress there. We’re getting in with more and more teams.

The teams that we talked about were on the new logo acquisition side of the house. We’re we’re now working more with their expansion teams as well. We’re getting brought into more and more expansion deals for them, which is exciting. So that’s a whole other kind of frontier, within their company that we we are starting to

Derek Wood, Senior Analyst: get into. So, so the message has worked pretty well, I guess. Yeah.

Todd Crane, CFO, Domo: Yeah. It’s resonating really well.

Derek Wood, Senior Analyst: And are you being and so that idea of like, you’re you’re working with the, you know, these ETL vendors or working with these BI vendors, can work just with one. Are you being brought are you seeing use cases where you’re being deployed for both the ETL engine and the BI kind of front end?

Todd Crane, CFO, Domo: Absolutely. Absolutely. And that’s a huge that’s a huge selling point of this whole arrangement is, hey, you need to hydrate your data warehouse. We have a thousand connectors. You need to be able to join, combine, cleanse that data and get it into into a a nice clean format to put into your data warehouse.

We can do that as well. And then on the front end, the ability to create, you know, gentic workflows, to create custom applications, to create whatever kind of, you know, front end visual experience that you want, we can facilitate all that in one stop, all under one roof. So it saves a lot of time and effort. They don’t have to go integrate five different systems. They don’t have to have different, you know, system admins or IT owns this one and this other group owns this other tool.

It’s all it’s just a lot more streamlined. It makes for a quicker sales process. And frankly, one of the things they’re seeing with with them plus us is a really a really strong competitor to Microsoft. Right? Mike they don’t like Microsoft.

You know, Microsoft’s been a competitor for us. So when we we can join forces, it gives us a much better, you know, puts us on much better footing to to compete against the likes of Microsoft. Yeah.

Derek Wood, Senior Analyst: So, okay. That’s is the competitive landscape, I mean, it had been tough competing against, like, Power BI and Tableau. I mean, has this given you kind of, like, better win rates because you’re being positioned a little differently?

Todd Crane, CFO, Domo: It’s absolutely helping our win rates. We’re we’re seeing Tableau, a little bit less. Microsoft is still there a lot of the time. But our our win rates are definitely going up as we partnered with, you know, Databricks, Snowflake, etcetera. Because we can go in with a joint plan.

They’ve got contacts in the company that we don’t have. We have contacts they don’t have. And typically they’re in they’re really strong with the CIO. Right? And we’re more line of business.

Derek Wood, Senior Analyst: Right.

Todd Crane, CFO, Domo: And if you go talk to anyone on the sales team at at Snowflake, Databricks or these other, you know, CDWs, their directive is you need to get in with line of business. Line of business, line of business, right? And we can help them accomplish that. We’ve where we’ve been weak in the past

Derek Wood, Senior Analyst: Vice versa.

Todd Crane, CFO, Domo: Is the CIO doesn’t know who Domo is, right? What’s this tool that marketing’s using over here? Haven’t heard of it. Know, we should get rid of But if we can come in the front door hand in hand with these CDWs and we’re blessed by the CIO, we’re part of a blessed global data strategy, that’s a completely different situation.

Derek Wood, Senior Analyst: That was going be my next question, but you already answered. So that’s good. I’m sure a lot of CIOs are like, we haven’t heard of Domo. And now you’re getting of in the door and getting recognition. Sounds like a pretty good synergy.

What is where are we with the with traction with Databricks as another partner to target?

Todd Crane, CFO, Domo: Yeah. Definitely earlier in the process than we are with Snowflake, but definitely, you know, it’s a big focus for us. I think the next big step there is we’re gonna have kind of a a really strong d two of our integration with them done in mid July. And I think once we have that done, that’s gonna give us a more, you know, more than we can talk to them about and say, hey, we just redid, you know, another version of the integration. These are the additional things we can do.

And that’s gonna, you know, accelerate that that partnership as well. And getting a team stood up as well. You know, we’ve got the overlay team for Snowflake. We’ve got the beginnings of an overlay team for Databricks, but we need to continue to expand that and build that out as well. Yeah.

Derek Wood, Senior Analyst: Okay. Well, really nice to see all this come together. Been hearing about the strategy for a while. I mean, as you look at the pipeline, sales cycles similar to kind of your core sales cycles or anything quicker or longer?

Todd Crane, CFO, Domo: No, it’s pretty similar. In some cases, it’s quicker. But I’d say on average, it’s in line, maybe slightly faster than what we’re seeing, what we’ve been seeing. But it’s, yeah, directionally about the same.

Derek Wood, Senior Analyst: Yeah. And I guess the other big initiative has been around the consumption pricing model. Mean, you got over 70% of the base now or of ARR on consumption? Kind of where do you think this goes? Do you get the majority, you get close to 9,100?

What happens to those that that don’t actually Yeah.

Todd Crane, CFO, Domo: Mean, we’re we’re seeing we’re seeing it approach 90 by the end of this year. You know, just the the run rate we’re on and the progress we’re seeing there. But really, we’ve been working on the consumption thing for a little less than two years. And to go less than two years ago from kind of a pilot group to now 70% of our AR, it’s a pretty heroic effort to to get to that level so quickly. And the trends we’re seeing there are just super, super encouraging.

I mean, fact that we’re able to unleash the entire platform for them and they don’t have any there’s no aspect of the product they don’t have access to, especially in this world today where, you know, AgenTik AI is just top of mind for everybody. For these consumption customers to have the ability to go in and access our workflow capability, our AIML capability, all the advanced features that we used to have to do separate sales cycles for and they’d have to go to procurement and and get permission to to be able to go by. They could just go in there and access those now. So it’s it’s really opening the door for us to go in and help them adopt and get them set up with some some AgenTic AI workflows that are actually driving meaningful impact in their business, which is creating, you know, a much stronger foundation and and and lending itself to these higher retention rates that we’re seeing with that group.

Derek Wood, Senior Analyst: Yeah. I mean, it was a few quarters ago where you gave some quantification on on that. I don’t think you’ve given anything new recently, the the NRR profile of a consumption customer is, you know, this versus legacy. I mean, it’s a lot higher. Right?

Todd Crane, CFO, Domo: Yeah. So the last update we gave q four for the full year of f y twenty five, it was over 90% gross retention and over a % net retention for the for the consumption cohort. Yeah. And we’re continuing to see that cohort be, you know, considerably higher than our seat based customers. You know, we I I think as we get closer to 90%, it’s essentially our whole business.

So really, the the metric that matters is our our consolidated Yeah. NRR, consolidated gross retention. So it feels it made more sense to us to kind of keep focusing on those with just a little bit of side color on what’s going on with the consumption cohort, but the trends are definitely there.

Derek Wood, Senior Analyst: So how do we think about then just the monetization and the revenue model if you’re not tied to seats anymore and there’s kind of, I think, unlimited access, right, to users? So what is the grounded pricing component and how do you drive expansion in that? Yeah.

Todd Crane, CFO, Domo: So it’s all based on credits. The customers buy a package of credits up front that they burn down through the year. They don’t carry over. Or if it’s a multi year, obviously, over the course of the contract. And the way that we’re expanding is, for example, I’ll use like an agentic work flow as an example.

To set up a kind of end to end agentic workflow, there’s a connector that’s running, probably multiple connectors actually. They’re they’re getting at different data sources in the company. You’ve got ETL workloads that are running to combine and cleanse and join that data. You’ve got a workflow itself that’s running through a process where it’s bringing that data in. It’s saying if this, then that, you know, go update this over here.

Go talk to this system over here. Those are all consuming credits. So, you know, when a connector runs, it consumes credit. When an ETL runs, it consumes credit. When a workflow runs, it consumes credit.

So these these these workflows are actually really, you know, kind of triggering four or five things in our product that all consume credit. So that’s that’s how we kind of monetize that additional

Derek Wood, Senior Analyst: Yeah.

Todd Crane, CFO, Domo: That additional usage.

Derek Wood, Senior Analyst: So, yeah, the more connectors, the more data, and even the more users because they’re querying this Exactly. More. So that that’s all tied to consumption. That’s right.

Todd Crane, CFO, Domo: That’s right.

Derek Wood, Senior Analyst: When you flipped customers over from per seat to consumption, I I think was there much of an uplift or I think you kind of made it kind of neutral on the revenue side initially, and then then you kind of wanna see growth in consumption.

Todd Crane, CFO, Domo: That’s right.

Derek Wood, Senior Analyst: That’s right.

Todd Crane, CFO, Domo: Yeah. I mean, early on we we had some good uplift there. Customers that were really excited to have access to new features of product. As we get further into the customer base, it’s more, you know, more flat. But we’re seeing within a relatively short period of time, less than a year, the trajectory of that credit usage is really ticking up and allowing us to go in and say, hey, again, good news, you’re using the heck out of the product, let’s get you into a contract that’s going to get you set up for success for

Derek Wood, Senior Analyst: the long term. Okay. You mentioned, you know, AI agents, AgenTik AI, it’s everyone talking about that. What’s your story there in terms of how you’re driving product to market to support AI?

Todd Crane, CFO, Domo: Yeah. Absolutely. So we at Domapalooza, we announced our AI or agent catalyst, platform, which is, you know, really kind of a combination of of different pieces of platform that we’ve been working on and building for years. Right? It’s just in a lot of ways we were built for this moment.

We have all the connectors. We have the ETL. We have the governance. We have the security. We have, you know, all the things that all the ingredients you need to create an agentic workflow, we have.

And so packaging that up saying, hey, have agent catalyst. It allows you to quickly build agents. In fact, we had a customer, that recently emailed us and said, hey, I was participating in one of your webinars. We have a 10 part webinar series about AI agents. And they said, I created a workflow or an agent in thirty seven minutes.

And they were just blown away that they were able to create a meaningful agent in thirty seven minutes. And we’re seeing stories like that across our customer base where they’re able to get to that value really, really quickly. So yeah, that’s it’s really just combining the things that we’ve been working on for years and helping people understand how to use it together to create.

Derek Wood, Senior Analyst: Now, agents like, is this like, you know, natural language querying of your data and being able to ask any question about your data? Or are these like packaged or you can build your own like, I want a marketing agent to go automate this marketing process? So I’m just wondering, is it more from the IT side or more from operational kind of line of business side?

Todd Crane, CFO, Domo: It’s definitely line of business. We we do have the ability to interact with your data using a natural language interface. That’s that’s part of it. When we talk about these, agentic workflows, it’s kind of a separate, you know, category of AI functionality. And it is line of business and it’s them it’s them orchestrating a series of events where it’s, hey, you know, hey agent, you’re a, you know, you’re a CFO, you’re reviewing the the forecast, go look for anything that looks out of line, look for any anomalies, come back and tell me what you find.

Right? And it’s going out, it’s accessing that data, it’s coming back reporting what it finds. It could it could be updating a form, it could be updating another system, Could be sending emails. Could be sending alerts. Those kind of things.

So it’s much more line of business focus, like very tangible use case focus is what we’re seeing. And what’s interesting about this this development, you know, there’s there’s some narratives out there that there’s gonna be, you know, one or two big winners. There’s gonna be people who win and who lose in this AI AI market or there’s I’ve also heard people say there’s really three buckets of of true AI use cases that could be, that are really gonna drive value. What we’re seeing is with this ability to create agents quickly Mhmm. There there are a ton of smaller use cases out there that are very meaningful to our customers where they’re able to quickly get that value and deploy those agents in a meaningful way.

So I I I think there’s there’s just a lot of greenfield out there. A lot of opportunity for people to see to to take part in that growth.

Derek Wood, Senior Analyst: And you’re taking the approach of like, you could go build quickly, you know, and Mhmm. As opposed to like, here’s your marketing agent or here’s your pre packaged That’s right. Yeah. That’s

Todd Crane, CFO, Domo: right. We we do we do have some pre packaged agents to get just to get the juices flowing. But, you know, example, Domopalooza, one of our general sessions, we we announced and said, hey, we will help you build your first agent for free. Mhmm. Here’s a link.

Go sign up. We had 200 over 200 customers sign up immediately saying, yes, please come help me build an agent. So we’re working through that list right now and and the use cases that that we’re helping people implement are are super, super interesting.

Derek Wood, Senior Analyst: And the modernization strategy is same as the as the core consumption based. That’s right. Yeah. I’ll stop for a sec, see if there’s any questions in the audience. So wanted to move to how to think about costs and investment growth.

So to get to your five and five and ten and ten, I think it incorporates OpEx being pretty flat here the next, through this year and even into next year. How do you how do you dial up growth without with with keeping costs flat?

Todd Crane, CFO, Domo: Yeah. It’s just a constant cycle of making sure we have the right resources in the right places. We’re also looking heavily at AI and how can we replace certain jobs with AI. And we’ve seen a lot of success there where we’ve been able to streamline jobs. We’ve been able to get a lot more leverage out of our existing resources by empowering them with with AI tools to make them, you know, help them do their job a lot faster.

So that’s certainly part of it. I think as well, again, going back to the rep productivity, as we see that rep productivity climb, you’re able to do a lot more with the smaller cost envelope. And as we lean in and get back to hiring more reps, we’re focusing on reps there that have experience in the ecosystem. And that’s something that’s changed in just the last, you know, two, three years. We’ve kind of got a a much bigger talent pool we can go access, people that have been at, you know, five Tram, Matillion, Snowflake, Databricks, etcetera, that really understand the landscape and hit the ground running.

So the ramp times we’re seeing are a lot shorter than they than they have been in the past as well for the rep. So, you know, it’s looking at, you know, make sure the right people in the right places, looking at AI, you know, we’re we’re seeing a lot of good productivity on the And of course, there’s this whole package of of supporting roles that go around the sales team that if you can get by with with fewer reps there, you can get by with fewer, you know, supporting roles as well that helps. Yeah. Mean, $300,000,000 business, there’s a lot you can do with a $300,000,000 Yeah.

You know, cost envelope. You can you can shift things around and do a lot with that to get the growth while still Right. Keeping costs flat.

Derek Wood, Senior Analyst: And it sounds like you guys are talking about starting to kind of hire a bit more aggressively on the sales side because of what you’re seeing on the productivity That’s right. Yep. It’s a good sign. That I mean, give us a little history on that. Had it been kind of flat to down in the last year, and now you’re looking at dialing a

Todd Crane, CFO, Domo: Yeah. Yeah. I mean, if you go back to couple years ago, the the trend on the productivity was not what we wanted to see. We it was pretty clear we had, you know, pockets in the sales team that just weren’t the right fit, weren’t the right background. So we’ve we’ve got it a group of of sales reps that we feel really good about right now, and we’re gonna we’re gonna lean in and and we’re and we’re seeing success like I mentioned.

Hiring hiring reps with a certain background and a certain, you know, level of experience in our ecosystem. Hiring the right people with the right background. And then as we have more and more of these leads coming in from the ecosystem, right, that’s also giving us confidence. It’s one thing to see the productivity, but you also have to have the lead flow to support bringing in a new rep where you know you’re gonna be able to feed them. And so we’re we’re looking at that and and kind of planning, trying to say just one step ahead of that lead flow as well.

But as that continues to grow, again, it gives us more confidence to bring bring more people in.

Derek Wood, Senior Analyst: And on the, gross margin side, I think I mean, there’s been a little bit of pressure as you’ve kind of shifted to this consumption model. Are we kind of at at more normalized levels here or how to think about

Todd Crane, CFO, Domo: Yeah. We see that stabilizing kind of at its current level in the near term and and then over the longer term we think, you know, we we see it going up. We were around 85% on the subscription margin in the past, around 82, you know, 81 and a half to 82 right now. Over the long run, the consumption model should tie the revenue more closely to our costs. Yeah.

The more our customers are, you know, querying data and and driving that that compute in in, you know, the systems that support our product, the revenue should be going up in tandem with that. Yeah. Yeah. Okay.

Derek Wood, Senior Analyst: What are your thoughts on the Informatica Yeah. Acquisition? Yeah.

Todd Crane, CFO, Domo: I mean, it’s it’s interesting. We’ve we’ve seen this before, you know, Salesforce obviously acquired MuleSoft and Tableau and and now Informatica. All companies that are in our space and companies that we’ve run into competitively, you know, as since that they took know, since they acquired Tableau, we’ve seen Tableau a little bit less. We expect that we’ll probably see something, so we’ll see less of Informatica in deals. So I think it creates opportunities for us.

Mean and then from a valuation perspective, on the day of that acquisition was announced, which I think was Tuesday this week, you know, our stock was up 13%. I think it was just a you know, they’re not they weren’t a super high growth company. They got a five x multiple. We’re still sub two, sub two x multiple. So, as people look at our company and understand, like, we’re not gonna be rule of zero forever.

You know, we’re five and five, 10 and 10. I think overall it helps us, both from a competitive standpoint and from a relative valuation standpoint. Even may help

Derek Wood, Senior Analyst: you with your snowflake partnership too.

Todd Crane, CFO, Domo: Yeah, absolutely. Absolutely.

Derek Wood, Senior Analyst: So we’re almost out of time. Just to kind of make sure we’re covering the bases on the macro side, I mean, you do have some public sector revenue. You do have a decent amount from retail, is from doze to tariffs, know, been concerned verticals. Doesn’t sound like you’re seeing any, like when you look at those verticals, how are you feeling about those?

Todd Crane, CFO, Domo: Yeah. So if you look at our customer base, it kind of mirrors the distribution of GDP, with maybe a slightly heavier weighting on tech. But other than that, it kind of mirrors GDP. So that gives us a nice diversified customer base to work with. And then from a federal perspective, we don’t have any federal exposure.

We don’t have any federal contracts. So that hasn’t been an issue for us. On the tariff thing, kind of just around the edges, we’ve had a couple customers mention things. Customers that are in the manufacturing space, We’ve had them say, you know, approach us about, you know, some concerns there, but nothing, nothing significant, nothing that’s that’s making us feel like there’s a fundamental shift that would cause us to have

Derek Wood, Senior Analyst: to alter our guidance or or alter the way we’re approaching the business. Okay. And lastly, I mean, Snowflakes conferences next week. You guys are going to be there.

Todd Crane, CFO, Domo: Yes, we will.

Derek Wood, Senior Analyst: What, what kind of opportunity does that event, yield for you guys?

Todd Crane, CFO, Domo: Yeah, it goes back to the, you know, the relationships and the education, you know, part of it where forge new relationships, make sure, you know, every every rep, Snowflake rep that’s there knows who we are, knows what we do. It’s just another opportunity to really expand that reach and that education, that educational effort that we’re that we’re in the middle of with them. So helping them understand how how we can help them sell more, help them sell faster, help them get to line of business. If we can come away with with And new prospects, right? Yeah.

And new prospects, of course. %. Okay.

Derek Wood, Senior Analyst: All right. Anybody else? No? Okay. Thank you.

Todd Crane, CFO, Domo: Yeah. Thanks, Derek. Appreciate

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