DOMO, INC. — Call Transcript 2022

Welcome to Domo's fourth quarter fiscal year 2022 and year-end earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. With that, I will hand it over to Peter Lowry, Domo's Vice President of Investor Relations. Good afternoon and welcome. On the call today, we have John Mellor, our CEO, Bruce Felt, our CFO, and Julie Kehoe, our Chief Communications Officer. Our founder and former CEO, Josh James, will also make some brief prepared remarks. Julie will lead off with our safe harbor statement and then on to the call. Julie? Our press release was issued after the market closed, and is posted on the investor relations section of our website, where this call is also being webcast. Statements made on this call include forward-looking statements related to our business under federal securities laws, including statements about financial projections, the plans and expectations for our go-to-market strategy, our expectations for our sales and new business initiatives, the impact of COVID-19 on our business, and our financial condition. These statements are subject to a variety of risks, uncertainties, and assumptions. For discussion of these risks and uncertainties, please refer to the documents we filed with the SEC, in particular, today's press release, our most recently filed annual report on Form 10-K, and our most recently filed quarterly report on Form 10-Q. These documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Domo's performance. Other than revenue, unless otherwise stated, we will be discussing our results of operations on a non-GAAP basis. These non-GAAP measures should be considered in addition to, and not as a substitute for, or in isolation from GAAP results. Please refer to the tables in our earnings press release for a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measure. With that, I'll turn it over to Josh. Josh? Hi, everyone. By now, I'm sure you've heard the news that I'm stepping down as CEO. I want to say I could not be more proud of the entire Domo team. They turned this business from a vision I founded 11 years ago to one that was now struggling to emerge and grow. Finally now, it's become a very successful, sustainable business. As we hear more from the team in a few minutes, we delivered a 30% billings growth this last quarter. It's a cash flow positive business and a recurring revenue business that enjoys 90% retention with sales productivity that has been holding strong and even improving. I couldn't be more excited about the future. As you saw in the press release, John Mellor is taking over as CEO, and Catherine Wong is being promoted to COO. I started working with John and relying on his wisdom and advice 20 years ago. I was lucky enough to start working with Catherine even before that. The company is in great hands. It's John's boat to drive now, and I'm thrilled to watch him captain the ship. I obviously have an aligned and substantial interest in Domo doing well, and I'll continue to be the biggest cheerleader. To that end, I'm going to jump off this call now and let the rest of it be about the new management team and the company's performance and the company's future. All right, John, the floor is yours. Thank you, Josh. Before I talk about our Q4 results and business highlights, I want to take a minute to introduce myself to all of you on the call today. I've met many of you over the years, and I'm looking forward to spending more time with you over the coming months and quarters. I've been Domo's Chief Strategy Officer since 2019, driving our corporate strategy, positioning, and marketing. I came to Domo after nine years at Adobe, where I was Vice President of Strategy and Business Operations for Adobe's Experience Cloud business unit. While I was there, we grew that business from $300 million to nearly $3 billion in annual revenue, executing on both organic growth as well as acquisitions. I came to Adobe in 2009 through its acquisition of Omniture. At Omniture, I was Executive Vice President of Strategy and Business Development. In that role, I focused on advancing the company from its hyper-growth phase to its IPO, and ultimately through its sale to Adobe. What initially attracted me to Domo was the strength and differentiation of its platform, the caliber of its management team, and importantly, the engagement patterns I saw across their customer base. I'm optimistic about our future and ready to lead Domo through this next phase of growth and innovation. Now let's talk about the quarter. I'm very pleased that we closed our fiscal 2022 with such strong results, driven by demand for the Domo platform to power the modern business. We posted 30% billings growth and 23% revenue growth year-on-year. Bruce, of course, will go into more detail, but we're continuing to see strength in the underlying metrics that drive future revenue growth. Today, I'll talk about what's driving the current demand, why we believe we are better positioned than ever, and I'll also talk about some customer wins from this quarter that illustrate Domo's unique value proposition. Domo is at the center of one of today's most ubiquitous business and IT trends, digital transformation. Companies are driving digital transformation across all areas of their organizations to become more agile in meeting customer expectations, dealing with supply chain disruptions, talent shortages, and other forces that are impacting the competitive situation. It's no surprise that digital transformation remains a top IT spending category. Domo's focus is on leveraging the data to improve the millions of decisions and business processes that happen across organizations. This is from the CEO to the frontline worker. It also extends externally with customers and partners. This is why we continue to attract new customers and expand to new use cases across our customer base. The 2021 Gartner View from the Board of Directors survey also indicates that analytics is a top game-changing technology to emerge stronger from the COVID-19 crisis. In line with this, we saw the ability to deploy apps, which we've talked about in previous earnings calls, but we deploy these apps as a key solution for companies needing to move fast. Because while data continues to explode across the organization, the utilization of that data is still limited to a fraction of an organization, typically via dashboards, which is the traditional BI model. Domo's apps break the traditional BI model because they combine data with workflow packaged into an experience that can be put right at the point where work gets done, or can be embedded within software applications used inside a company or exposed externally to customers and partners. This puts the power of data to work for the entire organization to drive action, breaking free from the small percentage of adoption of traditional BI. We're going to be talking a lot about this at our upcoming customer event, Domopalooza, later this month. Now let me talk about a few of our new customer wins. Customers continue to choose Domo based on our speed, scale, and the flexibility of our platform, from the industry's most robust data integration capabilities to being able to easily extend data to customers and partners at scale through our Domo Everywhere solution. It's also notable to mention that some of our larger wins this quarter came from partners. On last quarter's call, we talked about a Big Three auto manufacturer that was conducting a proof of concept, or POC, to optimize their global marketing performance and improve the customer experience. We're very pleased to say that the POC was successfully completed in Q4, and this POC has been converted into a well over seven-figure subscription contract. This happened much faster than our historical experience with these size deals. Another new logo win was a Big Four accounting firm that selected Domo for delivering new, personalized financial insights to its SMB clients. After a short POC, we were chosen because with Domo's platform, they did in days what they were expecting to take months, particularly with the new data integrations that were needed to deliver this solution. A third notable new logo and Domo Everywhere win was a professional services firm that replaced its legacy analytics and visualization solution with Domo to provide security assessment data to its thousands of customers in a better, more modern way. They initially chose Domo because of our platform's consumer-friendly interface, but also realized that Domo could support its hybrid data model, leveraging data in their cloud warehouse, as well as data they kept in other systems. In addition to new logos, we continued to drive upsell and engagement with existing customers who are expanding their use of Domo across their organizations. One of our top clients, a hospital network with over 90,000 employees, signed a seven-figure consulting services contract to bring together all of their data, including operations, HR, finance, and marketing, to drive additional enterprise-wide analytics use cases. Another significant upsell this quarter was with a software company that started with an initial sales operations use case and is now using Domo to combine data across on-premise and cloud systems, accessing marketing, HR, and professional services data. This customer now generates ACV of more than 10x the ACV of its initial use case a year earlier. This demonstrates the power of our land, expand, and retain strategy. Regardless of the use case, the common thread that runs through all these new customer wins and expansions is that they are in support of business users who are using Domo to drive business outcomes. Before I hand this over to Bruce, I have a few more highlights to touch on, starting with some exciting changes and additions we have made to our leadership team here at Domo. As you know, today we announced that Catherine Wong was promoted to Chief Operating Officer and will also remain Executive Vice President of Engineering. Domo will benefit significantly from her experience as we embark on our next phase of growth, and I'm excited to work closely with her. In January, we also announced that Mohammed Aaser joined us from McKinsey & Company as our Chief Data Officer. He will play an important role in helping customers better align their data strategy with business outcomes, and most importantly, help them discover the art of the possible using the Domo platform to digitally transform their business. From an ESG perspective, diversity, equity, and inclusion have always been important to us, and last quarter, we named Nikki Walker to be our Director of Diversity. For three years, she has led community engagement for Domo. Stepping into this role, she will also lead a newly formed DEI council, which will represent multiple voices from around our company. In Q4, we were named to Glassdoor's Best Companies to Work For list. For the tenth year in a row, we were named by Utah Business as a Best Companies to Work For, which is meaningful because it is heavily influenced by employee feedback. In closing, I'm extremely grateful for the entire Domo team, whose focus on customer value and success drives all they do. It's because of their commitment that we have achieved another incredible quarter and why I have confidence in the massive opportunity ahead of us and our ability to execute on it. Now, I'll hand it over to Bruce to go deeper into the numbers and provide guidance for the year ahead. Thank you, John. We finished fiscal 2022 with a strong Q4, closing out with 30% billings growth, the highest growth in the last 14 quarters. Some of the foundational growth drivers we have been investing in contributed to billings in the quarter, and these important drivers should also help us achieve our fiscal year 2023 growth objectives. One of the key drivers was sales hiring. We grew our direct sales force by over 25% in fiscal 2022. Our sales productivity per ramped rep was over $1 million in first year contract value in FY 2022. We're very pleased with this level of production, particularly since it occurred while we accelerated sales hiring. This gives us the confidence to continue hiring reps at a pace at least as high as last year's pace. Other key drivers are improving gross retention, better market positioning and awareness, higher yield on marketing spend, and improved partner contribution. We had a year of accelerating new logo growth while continuing to see significant engagement and upselling into our existing customers. The new logo growth is primarily driven from our corporate group, which has become a heck of a new business machine. We're finding that the complete platform pitch resonates extremely well with those customers because of the overwhelming amount of functionality and ease of use we bring to the market compared to all of the tool provider competitors. We plan to continue to lean into this category as we believe it can super-drive sustained, cost-effective, high growth. At the same time, we're making very good progress with great enterprise brands, which we expect can lead to even higher growth rates as we improve our new logo and upsell objectives with that part of the business. Enterprise deals tend to take longer because of the complexity of their infrastructure. We're getting better at finding the hooks to integrate into complex infrastructures. As that improves and our messaging around it improves, we should see acceleration in that business as well. Also, our partner strategy, which includes channel partners, technology partners, and application solution partners, will begin to focus more on enterprise customers. As that gets traction, it should also improve our momentum. We delivered Q4 billings of $108 million, a strong year-over-year increase of 30%, driven by new customer additions, expansions into existing customers, and an over 90% gross retention rate. Net retention was about 105% on a revenue basis and was close to 110% on a contracted ARR basis. Our current RPO of $222 million grew 24% year over year, while our total RPO grew 20%. On a dollar-weighted measure, we now have 62% of our customers under multiyear contracts at the end of Q4, up from 60% a year ago. Q4 total revenue was $70 million, a year-over-year increase of 23%. This is a nice beat against our 18% guidance and is an acceleration from 21% growth in Q3. Subscription revenue grew 19% year-over-year and represented 85% of total revenue. International revenue in the quarter represented 22% of total revenue, down from 24% last quarter due to the strength in our North America business. We had a very strong services revenue quarter driven by some of the large deals we talked about last quarter. Some of these have already converted to larger subscription deals, and over the next few quarters, we would expect to start to see subscription revenue growth surpass services growth. There are many factors that cause billings and revenue growth to diverge at times. Having said that, because we have sustained 25% billings growth rates for so many quarters, our revenue should begin to approach 25% growth. In fact, we expect to exit FY 2023 with subscription revenue growth of about 25%. As long as we can sustain 25% or better billings quarters, revenue should also be able to be sustained at those levels. Our subscription gross margin was 83%, up slightly from Q4 of last year and roughly in line with Q3. In Q4, operating expenses increased 26% from last year, primarily as we invest in our sales capacity and in part due to compensation expenses related to our strong Q4. Our net loss was $13.6 million, up from $9.8 million a year ago, and our net loss per share was $0.41. This is based on 32.8 million weighted average shares outstanding, basic and diluted. In Q4, we remained operating cash flow positive. Our cash balance was approximately $84 million, down slightly from last quarter. Now to discuss what we expect in Q1 and the full year FY 2023. For Q1, we're guiding to year-over-year billings growth of approximately 23%. We expect our Q2 billings amount to be roughly in line with Q1 because of a tough compare due to the impact of large billings last year, and then expect modest acceleration in billings growth for the remainder of the year. For the current fiscal year, we're guiding to billings growth of about 22% year over year, as we have communicated before, striving for higher growth. On expenses, we're planning for Q1 operating expenses to increase from Q4 levels, primarily as a result of costs associated with our annual user conference in Q1 and as we continue to invest in our growth initiatives, particularly sales hiring. Given all of our growth investments and our confidence in achieving enhanced growth results, we're planning for Q1 and FY 2023 adjusted net cash provided by operations to be slightly positive. Now to guidance for GAAP metrics. For the first quarter of FY 2023, we expect GAAP revenue to be in the range of $73.5 million-$74.5 million. If we're able to deliver more of the backlogs generated in Q4, we should be able to deliver more revenue than the guided amount. We expect non-GAAP net loss per share, basic and diluted of $0.38-$0.42. This assumes 33.3 million weighted average shares outstanding, basic and diluted. For the full year of FY 2023, we expect GAAP revenue to be in the range of $314 million-$319 million, representing year-over-year growth of 22%-24%. We expect non-GAAP net loss per share, basic and diluted of $1.43-$1.53. This assumes 34.2 million weighted average shares outstanding, basic and diluted. In closing, we're pleased with our strong performance in Q4 and continue to believe we're well positioned to execute against our growth plans. With that, we'll open the call for questions. Operator? At this time, I would like to remind everyone in order to ask a question, please press star followed by the number 1 on your telephone keypad. Your first question comes from the line of Sanjit Singh with Morgan Stanley. Your line is open. Thank you for taking the questions, and congrats on the really strong Q4. The guide was fantastic as well. I usually like to sort of start with the obvious, and I don't know who I should direct this to, but well, one's gonna be for John, just in terms of how he's thinking about 2022 and beyond. Just in terms of Josh stepping down from the role, sad to see him go. I think just in terms of the handoff of the transition, is there any sort of color you can provide there? That, you know, Josh is, you know, stepping off the board as well, so he's, you know, sort of exiting the company. Just in terms of the timing of the transition, given where the business is today in a really good spot, I think what I'm sort of struggling with is why Josh may not be around just to give John some mentorship in his first year as CEO. That's sort of the first question. Then the question for you, John. Thank you, congrats on the big promotion. If you think about the strategy of the company, and you sort of architected that strategy, right? As CEO, what ways should we expect Domo to change or not change going into next fiscal year and beyond? Those are my, you know, the first two questions. Great, Sanjit, and good talking to you. Appreciate the questions. Yeah, as you saw, Josh has stepped down from the board, has stepped down as CEO. You know, it's actually a really exciting time for the business. This is an opportunity to leverage the breadth and the depth of the management team. You know, this team that's here today has delivered these results, and we've got a passionate vision about how to continue to execute on those results. You know, I appreciate the question about my perspective because Domo has such a unique value proposition in this market. We've got an opportunity. I think my style is really about simplicity and focus on execution, right? Are we going after the right big strategic targets? Which I think we've proven that we are really making progress there. Are we investing in the right systems to run the business as it scales? We're making decisions now that need to be on the path of a billion-dollar revenue business. Of course, a big priority for me is employee experience. As we add more people, particularly to the sales organization, how do we do that with consistency? How do we do that in a way that maintains culture and inclusivity and just builds a high-performance team? There was kind of a lot there. I hope that answers your question. Yeah. I appreciate the thought. Maybe one for Bruce, just in terms of the quarter, and particularly the conversion of the proof of concept for the services contract into subscription contracts. How much of a trend is that going to be going forward? In sort of larger enterprise customers, you know, starting with a you know sizable proof of concept, converting to seven-figure or hopefully six-figure type wins, is that kind of a new motion that we should expect going forward? You know, is services revenue essentially gonna tell us become a leading indicator of future subscription revenue growth, or is that kind of more bespoke to some of the large deals that you guys have been executing over the past year? The trend of having proof of concepts convert at a very high rate in the closed deals has been here for quite some time. We have very high close rates. What makes this unique is it was just much larger dollars just because of the size and scale of the customer. We may see more of those because it's highly comforting to large enterprises to know the product's gonna work in the use case they have in mind before they fully commit. You know, as our enterprise motion gets higher and more traction, it wouldn't be surprising to see that. I wouldn't necessarily conclude that services is a leading indicator generally. I think proof of concepts are. We really do believe we're in the subscription business. We do everything we can to maximize that. Our services organization is there to ensure a smooth start and successful start, and we know that's critical to having high renewal rates. It's always gonna be a big part of our business. We actually would like to see more and more come from partners. Partner source is one of our big focused areas. That large auto manufacturer actually was a partner source deal. We hope that is a trend, that we see more of them in the large enterprises. Just continuing to have high success rates with POCs turning into closed business, that's been here for quite some time. Got it. Thanks a lot. Your next question comes from the line of Derrick Wood with Cowen. Your line is open. Great. Thanks, and just wanna wish Josh success in his next chapter. First question, I guess, John, for you. You know, we knew Ian and Wolf were focused on closing out a strong Q4. You guys did a great job. But I think that there's, you know, maybe some go-to-market tweaks expected to come with Wolf at the helm and now you. Just curious on a few things. First, it sounds like you wanna have a balance of transactional and large deal activity. I think the incremental effort sounds like it'll be more around how do you drive more large deal conversions. Would love to hear your thoughts there. Just thoughts about verticalizing the sales force or what kind of new development we could see on the partner side would be helpful. Sure. Great. Thanks, Derek. Appreciate the question. Yeah, you know, the go-to-market engine, you know, I think it's constantly in a state of tweak certainly. There's some really good traction that the team has seen, as we've seen over the last few quarters. You know, you've got parts of the business, as we've talked about, the corporate business, where that engine is really working. You hear the excitement from the team and even the excitement from Bruce. That engine is working, and we've got an opportunity to continue to focus on that business while starting to really push some more focus on the enterprise. That's where it gets exciting, and I know that Wolf and Ian are both, you know, very excited about the opportunities there because as you mentioned, verticalizing these solutions helps us align with our strategy of putting data to work for everyone in an organization. That's slightly different when you're talking about retail or when you're talking about financial services or manufacturing. Being able to crisply talk about the value of Domo in each of those industries or verticals is something that we see as an opportunity for incremental improvement with lead generation, deal closure, et cetera. It really helps us speak the language of the customer. Great. Thanks. Maybe one for Bruce. Certainly encouraging to see the strong top-line guide and the confidence in revenue growth converging to the ARR growth levels you've been seeing. But I wanted to talk about the bottom line. EPS is expected to be lower in fiscal 2023 versus 2022. How much of a factor is that coming from maybe a higher PS mix and some pressure on gross margin? How much is coming just from the OpEx investment, sales hiring and back to work expenses and things like that? What does that really imply on the op margins side? Yeah. First of all, we, you know, we got a lot of questions during last year about what is our posture on investing going forward. Our response was, well, we just have to see how this year works, closes out. We were pretty clear that if we really saw the unit economics working and the momentum there, our strong preference is to take any available extra investment dollars and put them toward growth. By that we mean whatever is generally generated in cash flow beyond, you know, our break-even status. As I sit here right now, I'm just very bullish on the business. I think we have incredible number of initiatives working for us. Underlying the billings growth was even stronger new ACV growth. Supporting that was even a stronger recurring ACV growth. With Wolf in the mix, and Ian extremely engaged, who built the engine to really make this happen this last year. I mean, the combination of that talent is certainly working together on making sure that we just keep this momentum going. When we say we want to invest more, it really will be in sales hiring first, the supporting infrastructure to make sure that we can maintain these productivity levels. We'll try to get as much leverage we can out of the other line items to frankly afford more investment in growth. We're just setting up the infrastructure to have many quarters of nice, sustained growth at rates we've always been striving to get. If we really keep it up, then we can go into even a higher zip code of growth. Now this year, we'll have to see how it plays out, but I have a lot more confidence as I sit here at the beginning of this year than at the beginning of last year. I mean, the beginning of last year, our guidance was something like 16% growth, and now we're well into the 20s. There's a lot of drivers in play that have yet to be realized. More to come when we get to the user conference coming up. We'll go through those drivers again, just like we did last year. Yeah, that's the thinking behind the philosophy of investing and, you know, trying to stay cash flow positive while we really take advantage of everything we see in front of us. Yeah. That's really great to hear. Just to clarify, you are expecting positive operating cash flow for the year? Yes. Okay. That's great. Thanks for taking my questions. You're welcome. Thanks, Derrick. Your next question comes from the line of Kamil Mielczarek with William Blair. Your line is open. Thanks for taking my question. John, congratulations on the promotion. I'd like to hear your thoughts on the product roadmap longer term. How are you thinking about the evolution of the Domo platform over the next few years? And what are some of the holes in the product portfolio today? And how do you think about prioritizing R&D investments? Any color you can provide there would be great. Yeah, sure. You know, we've got a lot queued up for our annual customer event coming up here in just a few weeks at Domopalooza. I won't steal too much of the team's thunder from that. You know, I will say that as we've talked about in a few earnings calls, one of the real interesting areas that we're seeing is this concept of apps that are driven by data focused on taking action. Right? This is it really kind of breaks the mold of traditional BI and allows data to be combined with workflow, wrapped in an experience, and put right in the hands, meaning right on the phone, on the tablet, the device of people making decisions, which it breaks out of traditional BI because instead of low single-digit% adoption of BI in an organization, you move to the whole company having an opportunity to use data to really drive their business and truly take action. That's a really big push. You know, one of the exciting situations that Domo's in, given its success with customers, and especially big customers, is, you know, those folks tend to be the best drivers of roadmap. Making your customers happy tends to really make your product better, and it makes your product more approachable and better for other customers. I think if you've heard Catherine Wong, our EVP of product and now Chief Operating Officer, talk about the big customers, she has embraced the customers that scare you, because those are the customers that give you real roadmap acceleration. That's helpful. Thanks. Then, maybe one for Bruce. It's been great to hear about the productivity improvements, and despite that, you've continued to step up quota-carrying headcount throughout the year. Thinking out longer term, how are you thinking about the pace of margin expansion relative to investments back in the business? If we see more of the same in productivity, did you plan to continue to accelerate quota-carrying headcount growth? Or is there a point where maybe you let some of those strong sales flow through the model and expand free cash flow margin? The basic, more or less philosophy on timeframe was, as soon as productivity hit a level that we thought was quite respectable, let's definitely lean into that, well, in the first year, which was last year, and see how that goes. Certainly another full year of that, which is the year we're in, as just supplying good baseline foundational growth to the business. That gives us the time to keep developing the other drivers, which are more yield out of marketing, certainly the partner area. We still think we have a lot of upside in what we get out of the large enterprise business, just landing more and expanding faster. You know, better positioning in the market. We're still the one platform-agnostic software company in the space. We're gonna accrue benefits for being that and keep building out the platform with very interesting apps, keep expanding the use of Domo Everywhere. That might take pressure off. That should take pressure ultimately off needing to scale with just sales hiring. Our hope is, yeah, we get these other drivers working, and we start getting leverage out of it so that that gives us, you know, more room to allow some of it to flow through on the margin line. Let me point out, we're now getting to a point where this year we'll charge through $300 million of ARR. I don't have to tell you how profitable that is in the SaaS business. It's highly profitable. We could allow, you know, as much as we want to flow through. We just happen to be in this very unique time where we've had challenged growth in the past. We finally see the economics working in our favor. We think we're extremely well-positioned. We have a extremely energized management team as I sit here right now. We think we should turn that into lots of growth points. It'll cost us a little bit of money, but in the long run, with the recurring revenue model, you know it puts us in a position to allow that to become profit at any point in time. That's the basic philosophy as we sit here right now. That's great color, Bruce. Thanks, and, congrats again on the strong results and the strong year. Well, thank you. There are no further questions at this time. This does conclude today's conference call. Thank you for joining. You may now disconnect.

Speaker 7: Welcome to Domo's fourth quarter fiscal year 2022 and year-end earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. With that, I will hand it over to Peter Lowry, Domo's Vice President of Investor Relations. Welcome to Domo's fourth quarter fiscal year 2022 and year-end earnings conference call. welcome to domo's fourth quarter fiscal year 2022 and year-end earnings conference call All lines have been placed on mute to prevent any background noise. all lines have been placed on mute to prevent any background noise After the speaker's remarks, there will be a question and answer session. after the speaker's remarks there will be a question and answer session If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. if you would like to ask a question during this time please press star followed by the number one on your telephone keypad If you would like to withdraw your question, press star one again. if you would like to withdraw your question press star one again Thank you. thank you With that, I will hand it over to Peter Lowry, Domo's Vice President of Investor Relations. with that i will hand it over to peter lowry domo's vice president of investor relations

Speaker 8: Good afternoon and welcome. On the call today, we have John Mellor, our CEO, Bruce Felt, our CFO, and Julie Kehoe, our Chief Communications Officer. Our founder and former CEO, Josh James, will also make some brief prepared remarks. Julie will lead off with our safe harbor statement and then on to the call. Julie? Good afternoon and welcome. good afternoon and welcome On the call today, we have John Mellor, our CEO, Bruce Felt, our CFO, and Julie Kehoe, our Chief Communications Officer. on the call today we have john mellor our ceo bruce felt our cfo and julie kehoe our chief communications officer Our founder and former CEO, Josh James, will also make some brief prepared remarks. our founder and former ceo josh james will also make some brief prepared remarks Julie will lead off with our safe harbor statement and then on to the call. julie will lead off with our safe harbor statement and then on to the call Julie? julie

Speaker 5: Our press release was issued after the market closed, and is posted on the investor relations section of our website, where this call is also being webcast. Statements made on this call include forward-looking statements related to our business under federal securities laws, including statements about financial projections, the plans and expectations for our go-to-market strategy, our expectations for our sales and new business initiatives, the impact of COVID-19 on our business, and our financial condition. These statements are subject to a variety of risks, uncertainties, and assumptions. For discussion of these risks and uncertainties, please refer to the documents we filed with the SEC, in particular, today's press release, our most recently filed annual report on Form 10-K, and our most recently filed quarterly report on Form 10-Q. Our press release was issued after the market closed, and is posted on the investor relations section of our website, where this call is also being webcast. our press release was issued after the market closed and is posted on the investor relations section of our website where this call is also being webcast Statements made on this call include forward-looking statements related to our business under federal securities laws, including statements about financial projections, the plans and expectations for our go-to-market strategy, our expectations for our sales and new business initiatives, the impact of COVID-19 on our business, and our financial condition. statements made on this call include forward-looking statements related to our business under federal securities laws including statements about financial projections the plans and expectations for our go-to-market strategy our expectations for our sales and new business initiatives the impact of covid-19 on our business and our financial condition These statements are subject to a variety of risks, uncertainties, and assumptions. these statements are subject to a variety of risks uncertainties and assumptions For discussion of these risks and uncertainties, please refer to the documents we filed with the SEC, in particular, today's press release, our most recently filed annual report on Form 10-K, and our most recently filed quarterly report on Form 10-Q. for discussion of these risks and uncertainties please refer to the documents we filed with the sec in particular today's press release our most recently filed annual report on form 10-k and our most recently filed quarterly report on form 10-q These documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Domo's performance. Other than revenue, unless otherwise stated, we will be discussing our results of operations on a non-GAAP basis. These non-GAAP measures should be considered in addition to, and not as a substitute for, or in isolation from GAAP results. Please refer to the tables in our earnings press release for a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measure. With that, I'll turn it over to Josh. Josh? These documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements. these documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Domo's performance. in addition during today's call we will discuss non-gaap financial measures which we believe are useful as supplemental measures of domo's performance Other than revenue, unless otherwise stated, we will be discussing our results of operations on a non-GAAP basis. other than revenue unless otherwise stated we will be discussing our results of operations on a non-gaap basis These non-GAAP measures should be considered in addition to, and not as a substitute for, or in isolation from GAAP results. these non-gaap measures should be considered in addition to and not as a substitute for or in isolation from gaap results Please refer to the tables in our earnings press release for a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measure. please refer to the tables in our earnings press release for a reconciliation of our non-gaap financial measures to their most directly comparable gaap measure With that, I'll turn it over to Josh. with that i'll turn it over to josh Josh? josh

Speaker 4: Hi, everyone. By now, I'm sure you've heard the news that I'm stepping down as CEO. I want to say I could not be more proud of the entire Domo team. They turned this business from a vision I founded 11 years ago to one that was now struggling to emerge and grow. Finally now, it's become a very successful, sustainable business. As we hear more from the team in a few minutes, we delivered a 30% billings growth this last quarter. It's a cash flow positive business and a recurring revenue business that enjoys 90% retention with sales productivity that has been holding strong and even improving. I couldn't be more excited about the future. As you saw in the press release, John Mellor is taking over as CEO, and Catherine Wong is being promoted to COO. Hi, everyone. hi everyone By now, I'm sure you've heard the news that I'm stepping down as CEO. by now i'm sure you've heard the news that i'm stepping down as ceo I want to say I could not be more proud of the entire Domo team. i want to say i could not be more proud of the entire domo team They turned this business from a vision I founded 11 years ago to one that was now struggling to emerge and grow. they turned this business from a vision i founded 11 years ago to one that was now struggling to emerge and grow Finally now, it's become a very successful, sustainable business. finally now it's become a very successful sustainable business As we hear more from the team in a few minutes, we delivered a 30% billings growth this last quarter. as we hear more from the team in a few minutes we delivered a 30% billings growth this last quarter It's a cash flow positive business and a recurring revenue business that enjoys 90% retention with sales productivity that has been holding strong and even improving. it's a cash flow positive business and a recurring revenue business that enjoys 90% retention with sales productivity that has been holding strong and even improving I couldn't be more excited about the future. i couldn't be more excited about the future As you saw in the press release, John Mellor is taking over as CEO, and Catherine Wong is being promoted to COO. as you saw in the press release john mellor is taking over as ceo and catherine wong is being promoted to coo I started working with John and relying on his wisdom and advice 20 years ago. I was lucky enough to start working with Catherine even before that. The company is in great hands. It's John's boat to drive now, and I'm thrilled to watch him captain the ship. I obviously have an aligned and substantial interest in Domo doing well, and I'll continue to be the biggest cheerleader. To that end, I'm going to jump off this call now and let the rest of it be about the new management team and the company's performance and the company's future. All right, John, the floor is yours. I started working with John and relying on his wisdom and advice 20 years ago. i started working with john and relying on his wisdom and advice 20 years ago I was lucky enough to start working with Catherine even before that. i was lucky enough to start working with catherine even before that The company is in great hands. the company is in great hands It's John's boat to drive now, and I'm thrilled to watch him captain the ship. it's john's boat to drive now and i'm thrilled to watch him captain the ship I obviously have an aligned and substantial interest in Domo doing well, and I'll continue to be the biggest cheerleader. i obviously have an aligned and substantial interest in domo doing well and i'll continue to be the biggest cheerleader To that end, I'm going to jump off this call now and let the rest of it be about the new management team and the company's performance and the company's future. to that end i'm going to jump off this call now and let the rest of it be about the new management team and the company's performance and the company's future All right, John, the floor is yours. all right john the floor is yours

Speaker 3: Thank you, Josh. Before I talk about our Q4 results and business highlights, I want to take a minute to introduce myself to all of you on the call today. I've met many of you over the years, and I'm looking forward to spending more time with you over the coming months and quarters. I've been Domo's Chief Strategy Officer since 2019, driving our corporate strategy, positioning, and marketing. I came to Domo after nine years at Adobe, where I was Vice President of Strategy and Business Operations for Adobe's Experience Cloud business unit. While I was there, we grew that business from $300 million to nearly $3 billion in annual revenue, executing on both organic growth as well as acquisitions. I came to Adobe in 2009 through its acquisition of Omniture. At Omniture, I was Executive Vice President of Strategy and Business Development. Thank you, Josh. thank you josh Before I talk about our Q4 results and business highlights, I want to take a minute to introduce myself to all of you on the call today. before i talk about our q4 results and business highlights i want to take a minute to introduce myself to all of you on the call today I've met many of you over the years, and I'm looking forward to spending more time with you over the coming months and quarters. i've met many of you over the years and i'm looking forward to spending more time with you over the coming months and quarters I've been Domo's Chief Strategy Officer since 2019, driving our corporate strategy, positioning, and marketing. i've been domo's chief strategy officer since 2019 driving our corporate strategy positioning and marketing I came to Domo after nine years at Adobe, where I was Vice President of Strategy and Business Operations for Adobe's Experience Cloud business unit. i came to domo after nine years at adobe where i was vice president of strategy and business operations for adobe's experience cloud business unit While I was there, we grew that business from $300 million to nearly $3 billion in annual revenue, executing on both organic growth as well as acquisitions. while i was there we grew that business from $300 million to nearly $3 billion in annual revenue executing on both organic growth as well as acquisitions I came to Adobe in 2009 through its acquisition of Omniture. i came to adobe in 2009 through its acquisition of omniture At Omniture, I was Executive Vice President of Strategy and Business Development. at omniture i was executive vice president of strategy and business development In that role, I focused on advancing the company from its hyper-growth phase to its IPO, and ultimately through its sale to Adobe. What initially attracted me to Domo was the strength and differentiation of its platform, the caliber of its management team, and importantly, the engagement patterns I saw across their customer base. I'm optimistic about our future and ready to lead Domo through this next phase of growth and innovation. Now let's talk about the quarter. I'm very pleased that we closed our fiscal 2022 with such strong results, driven by demand for the Domo platform to power the modern business. We posted 30% billings growth and 23% revenue growth year-on-year. Bruce, of course, will go into more detail, but we're continuing to see strength in the underlying metrics that drive future revenue growth. In that role, I focused on advancing the company from its hyper-growth phase to its IPO, and ultimately through its sale to Adobe. in that role i focused on advancing the company from its hyper-growth phase to its ipo and ultimately through its sale to adobe What initially attracted me to Domo was the strength and differentiation of its platform, the caliber of its management team, and importantly, the engagement patterns I saw across their customer base. what initially attracted me to domo was the strength and differentiation of its platform the caliber of its management team and importantly the engagement patterns i saw across their customer base I'm optimistic about our future and ready to lead Domo through this next phase of growth and innovation. i'm optimistic about our future and ready to lead domo through this next phase of growth and innovation Now let's talk about the quarter. now let's talk about the quarter I'm very pleased that we closed our fiscal 2022 with such strong results, driven by demand for the Domo platform to power the modern business. i'm very pleased that we closed our fiscal 2022 with such strong results driven by demand for the domo platform to power the modern business We posted 30% billings growth and 23% revenue growth year-on-year. we posted 30% billings growth and 23% revenue growth year-on-year Bruce, of course, will go into more detail, but we're continuing to see strength in the underlying metrics that drive future revenue growth. bruce of course will go into more detail but we're continuing to see strength in the underlying metrics that drive future revenue growth Today, I'll talk about what's driving the current demand, why we believe we are better positioned than ever, and I'll also talk about some customer wins from this quarter that illustrate Domo's unique value proposition. Domo is at the center of one of today's most ubiquitous business and IT trends, digital transformation. Companies are driving digital transformation across all areas of their organizations to become more agile in meeting customer expectations, dealing with supply chain disruptions, talent shortages, and other forces that are impacting the competitive situation. It's no surprise that digital transformation remains a top IT spending category. Domo's focus is on leveraging the data to improve the millions of decisions and business processes that happen across organizations. This is from the CEO to the frontline worker. It also extends externally with customers and partners. Today, I'll talk about what's driving the current demand, why we believe we are better positioned than ever, and I'll also talk about some customer wins from this quarter that illustrate Domo's unique value proposition. Domo is at the center of one of today's most ubiquitous business and IT trends, digital transformation. today i'll talk about what's driving the current demand why we believe we are better positioned than ever and i'll also talk about some customer wins from this quarter that illustrate domo's unique value proposition. domo is at the center of one of today's most ubiquitous business and it trends digital transformation Companies are driving digital transformation across all areas of their organizations to become more agile in meeting customer expectations, dealing with supply chain disruptions, talent shortages, and other forces that are impacting the competitive situation. companies are driving digital transformation across all areas of their organizations to become more agile in meeting customer expectations dealing with supply chain disruptions talent shortages and other forces that are impacting the competitive situation It's no surprise that digital transformation remains a top IT spending category. it's no surprise that digital transformation remains a top it spending category Domo's focus is on leveraging the data to improve the millions of decisions and business processes that happen across organizations. domo's focus is on leveraging the data to improve the millions of decisions and business processes that happen across organizations This is from the CEO to the frontline worker. this is from the ceo to the frontline worker It also extends externally with customers and partners. it also extends externally with customers and partners This is why we continue to attract new customers and expand to new use cases across our customer base. The 2021 Gartner View from the Board of Directors survey also indicates that analytics is a top game-changing technology to emerge stronger from the COVID-19 crisis. In line with this, we saw the ability to deploy apps, which we've talked about in previous earnings calls, but we deploy these apps as a key solution for companies needing to move fast. Because while data continues to explode across the organization, the utilization of that data is still limited to a fraction of an organization, typically via dashboards, which is the traditional BI model. This is why we continue to attract new customers and expand to new use cases across our customer base. this is why we continue to attract new customers and expand to new use cases across our customer base The 2021 Gartner View from the Board of Directors survey also indicates that analytics is a top game-changing technology to emerge stronger from the COVID-19 crisis. the 2021 gartner view from the board of directors survey also indicates that analytics is a top game-changing technology to emerge stronger from the covid-19 crisis In line with this, we saw the ability to deploy apps, which we've talked about in previous earnings calls, but we deploy these apps as a key solution for companies needing to move fast. in line with this we saw the ability to deploy apps which we've talked about in previous earnings calls but we deploy these apps as a key solution for companies needing to move fast Because while data continues to explode across the organization, the utilization of that data is still limited to a fraction of an organization, typically via dashboards, which is the traditional BI model. because while data continues to explode across the organization the utilization of that data is still limited to a fraction of an organization typically via dashboards which is the traditional bi model Domo's apps break the traditional BI model because they combine data with workflow packaged into an experience that can be put right at the point where work gets done, or can be embedded within software applications used inside a company or exposed externally to customers and partners. This puts the power of data to work for the entire organization to drive action, breaking free from the small percentage of adoption of traditional BI. We're going to be talking a lot about this at our upcoming customer event, Domopalooza, later this month. Now let me talk about a few of our new customer wins. Customers continue to choose Domo based on our speed, scale, and the flexibility of our platform, from the industry's most robust data integration capabilities to being able to easily extend data to customers and partners at scale through our Domo Everywhere solution. Domo's apps break the traditional BI model because they combine data with workflow packaged into an experience that can be put right at the point where work gets done, or can be embedded within software applications used inside a company or exposed externally to customers and partners. domo's apps break the traditional bi model because they combine data with workflow packaged into an experience that can be put right at the point where work gets done or can be embedded within software applications used inside a company or exposed externally to customers and partners This puts the power of data to work for the entire organization to drive action, breaking free from the small percentage of adoption of traditional BI. this puts the power of data to work for the entire organization to drive action breaking free from the small percentage of adoption of traditional bi We're going to be talking a lot about this at our upcoming customer event, Domopalooza, later this month. we're going to be talking a lot about this at our upcoming customer event domopalooza later this month Now let me talk about a few of our new customer wins. now let me talk about a few of our new customer wins Customers continue to choose Domo based on our speed, scale, and the flexibility of our platform, from the industry's most robust data integration capabilities to being able to easily extend data to customers and partners at scale through our Domo Everywhere solution. customers continue to choose domo based on our speed scale and the flexibility of our platform from the industry's most robust data integration capabilities to being able to easily extend data to customers and partners at scale through our domo everywhere solution It's also notable to mention that some of our larger wins this quarter came from partners. On last quarter's call, we talked about a Big Three auto manufacturer that was conducting a proof of concept, or POC, to optimize their global marketing performance and improve the customer experience. We're very pleased to say that the POC was successfully completed in Q4, and this POC has been converted into a well over seven-figure subscription contract. This happened much faster than our historical experience with these size deals. Another new logo win was a Big Four accounting firm that selected Domo for delivering new, personalized financial insights to its SMB clients. After a short POC, we were chosen because with Domo's platform, they did in days what they were expecting to take months, particularly with the new data integrations that were needed to deliver this solution. It's also notable to mention that some of our larger wins this quarter came from partners. it's also notable to mention that some of our larger wins this quarter came from partners On last quarter's call, we talked about a Big Three auto manufacturer that was conducting a proof of concept, or POC, to optimize their global marketing performance and improve the customer experience. on last quarter's call we talked about a big three auto manufacturer that was conducting a proof of concept or poc to optimize their global marketing performance and improve the customer experience We're very pleased to say that the POC was successfully completed in Q4, and this POC has been converted into a well over seven-figure subscription contract. we're very pleased to say that the poc was successfully completed in q4 and this poc has been converted into a well over seven-figure subscription contract This happened much faster than our historical experience with these size deals. this happened much faster than our historical experience with these size deals Another new logo win was a Big Four accounting firm that selected Domo for delivering new, personalized financial insights to its SMB clients. another new logo win was a big four accounting firm that selected domo for delivering new personalized financial insights to its smb clients After a short POC, we were chosen because with Domo's platform, they did in days what they were expecting to take months, particularly with the new data integrations that were needed to deliver this solution. after a short poc we were chosen because with domo's platform they did in days what they were expecting to take months particularly with the new data integrations that were needed to deliver this solution A third notable new logo and Domo Everywhere win was a professional services firm that replaced its legacy analytics and visualization solution with Domo to provide security assessment data to its thousands of customers in a better, more modern way. They initially chose Domo because of our platform's consumer-friendly interface, but also realized that Domo could support its hybrid data model, leveraging data in their cloud warehouse, as well as data they kept in other systems. In addition to new logos, we continued to drive upsell and engagement with existing customers who are expanding their use of Domo across their organizations. One of our top clients, a hospital network with over 90,000 employees, signed a seven-figure consulting services contract to bring together all of their data, including operations, HR, finance, and marketing, to drive additional enterprise-wide analytics use cases. A third notable new logo and Domo Everywhere win was a professional services firm that replaced its legacy analytics and visualization solution with Domo to provide security assessment data to its thousands of customers in a better, more modern way. a third notable new logo and domo everywhere win was a professional services firm that replaced its legacy analytics and visualization solution with domo to provide security assessment data to its thousands of customers in a better more modern way They initially chose Domo because of our platform's consumer-friendly interface, but also realized that Domo could support its hybrid data model, leveraging data in their cloud warehouse, as well as data they kept in other systems. they initially chose domo because of our platform's consumer-friendly interface but also realized that domo could support its hybrid data model leveraging data in their cloud warehouse as well as data they kept in other systems In addition to new logos, we continued to drive upsell and engagement with existing customers who are expanding their use of Domo across their organizations. in addition to new logos we continued to drive upsell and engagement with existing customers who are expanding their use of domo across their organizations One of our top clients, a hospital network with over 90,000 employees, signed a seven-figure consulting services contract to bring together all of their data, including operations, HR, finance, and marketing, to drive additional enterprise-wide analytics use cases. one of our top clients a hospital network with over 90,000 employees signed a seven-figure consulting services contract to bring together all of their data including operations hr finance and marketing to drive additional enterprise-wide analytics use cases Another significant upsell this quarter was with a software company that started with an initial sales operations use case and is now using Domo to combine data across on-premise and cloud systems, accessing marketing, HR, and professional services data. This customer now generates ACV of more than 10x the ACV of its initial use case a year earlier. This demonstrates the power of our land, expand, and retain strategy. Regardless of the use case, the common thread that runs through all these new customer wins and expansions is that they are in support of business users who are using Domo to drive business outcomes. Before I hand this over to Bruce, I have a few more highlights to touch on, starting with some exciting changes and additions we have made to our leadership team here at Domo. Another significant upsell this quarter was with a software company that started with an initial sales operations use case and is now using Domo to combine data across on-premise and cloud systems, accessing marketing, HR, and professional services data. another significant upsell this quarter was with a software company that started with an initial sales operations use case and is now using domo to combine data across on-premise and cloud systems accessing marketing hr and professional services data This customer now generates ACV of more than 10x the ACV of its initial use case a year earlier. this customer now generates acv of more than 10x the acv of its initial use case a year earlier This demonstrates the power of our land, expand, and retain strategy. this demonstrates the power of our land expand and retain strategy Regardless of the use case, the common thread that runs through all these new customer wins and expansions is that they are in support of business users who are using Domo to drive business outcomes. regardless of the use case the common thread that runs through all these new customer wins and expansions is that they are in support of business users who are using domo to drive business outcomes Before I hand this over to Bruce, I have a few more highlights to touch on, starting with some exciting changes and additions we have made to our leadership team here at Domo. before i hand this over to bruce i have a few more highlights to touch on starting with some exciting changes and additions we have made to our leadership team here at domo As you know, today we announced that Catherine Wong was promoted to Chief Operating Officer and will also remain Executive Vice President of Engineering. Domo will benefit significantly from her experience as we embark on our next phase of growth, and I'm excited to work closely with her. In January, we also announced that Mohammed Aaser joined us from McKinsey & Company as our Chief Data Officer. He will play an important role in helping customers better align their data strategy with business outcomes, and most importantly, help them discover the art of the possible using the Domo platform to digitally transform their business. From an ESG perspective, diversity, equity, and inclusion have always been important to us, and last quarter, we named Nikki Walker to be our Director of Diversity. As you know, today we announced that Catherine Wong was promoted to Chief Operating Officer and will also remain Executive Vice President of Engineering. as you know today we announced that catherine wong was promoted to chief operating officer and will also remain executive vice president of engineering Domo will benefit significantly from her experience as we embark on our next phase of growth, and I'm excited to work closely with her. domo will benefit significantly from her experience as we embark on our next phase of growth and i'm excited to work closely with her In January, we also announced that Mohammed Aaser joined us from McKinsey & Company as our Chief Data Officer. in january we also announced that mohammed aaser joined us from mckinsey & company as our chief data officer He will play an important role in helping customers better align their data strategy with business outcomes, and most importantly, help them discover the art of the possible using the Domo platform to digitally transform their business. he will play an important role in helping customers better align their data strategy with business outcomes and most importantly help them discover the art of the possible using the domo platform to digitally transform their business From an ESG perspective, diversity, equity, and inclusion have always been important to us, and last quarter, we named Nikki Walker to be our Director of Diversity. from an esg perspective diversity equity and inclusion have always been important to us and last quarter we named nikki walker to be our director of diversity For three years, she has led community engagement for Domo. Stepping into this role, she will also lead a newly formed DEI council, which will represent multiple voices from around our company. In Q4, we were named to Glassdoor's Best Companies to Work For list. For the tenth year in a row, we were named by Utah Business as a Best Companies to Work For, which is meaningful because it is heavily influenced by employee feedback. In closing, I'm extremely grateful for the entire Domo team, whose focus on customer value and success drives all they do. It's because of their commitment that we have achieved another incredible quarter and why I have confidence in the massive opportunity ahead of us and our ability to execute on it. Now, I'll hand it over to Bruce to go deeper into the numbers and provide guidance for the year ahead. For three years, she has led community engagement for Domo. Stepping into this role, she will also lead a newly formed DEI council, which will represent multiple voices from around our company. for three years she has led community engagement for domo. stepping into this role she will also lead a newly formed dei council which will represent multiple voices from around our company In Q4, we were named to Glassdoor's Best Companies to Work For list. in q4 we were named to glassdoor's best companies to work for list For the tenth year in a row, we were named by Utah Business as a Best Companies to Work For, which is meaningful because it is heavily influenced by employee feedback. for the tenth year in a row we were named by utah business as a best companies to work for which is meaningful because it is heavily influenced by employee feedback In closing, I'm extremely grateful for the entire Domo team, whose focus on customer value and success drives all they do. in closing i'm extremely grateful for the entire domo team whose focus on customer value and success drives all they do It's because of their commitment that we have achieved another incredible quarter and why I have confidence in the massive opportunity ahead of us and our ability to execute on it. it's because of their commitment that we have achieved another incredible quarter and why i have confidence in the massive opportunity ahead of us and our ability to execute on it Now, I'll hand it over to Bruce to go deeper into the numbers and provide guidance for the year ahead. now i'll hand it over to bruce to go deeper into the numbers and provide guidance for the year ahead

Speaker 1: Thank you, John. We finished fiscal 2022 with a strong Q4, closing out with 30% billings growth, the highest growth in the last 14 quarters. Some of the foundational growth drivers we have been investing in contributed to billings in the quarter, and these important drivers should also help us achieve our fiscal year 2023 growth objectives. One of the key drivers was sales hiring. We grew our direct sales force by over 25% in fiscal 2022. Our sales productivity per ramped rep was over $1 million in first year contract value in FY 2022. We're very pleased with this level of production, particularly since it occurred while we accelerated sales hiring. This gives us the confidence to continue hiring reps at a pace at least as high as last year's pace. Thank you, John. thank you john We finished fiscal 2022 with a strong Q4, closing out with 30% billings growth, the highest growth in the last 14 quarters. we finished fiscal 2022 with a strong q4 closing out with 30% billings growth the highest growth in the last 14 quarters Some of the foundational growth drivers we have been investing in contributed to billings in the quarter, and these important drivers should also help us achieve our fiscal year 2023 growth objectives. some of the foundational growth drivers we have been investing in contributed to billings in the quarter and these important drivers should also help us achieve our fiscal year 2023 growth objectives One of the key drivers was sales hiring. one of the key drivers was sales hiring We grew our direct sales force by over 25% in fiscal 2022. we grew our direct sales force by over 25% in fiscal 2022 Our sales productivity per ramped rep was over $1 million in first year contract value in FY 2022. our sales productivity per ramped rep was over $1 million in first year contract value in fy 2022 We're very pleased with this level of production, particularly since it occurred while we accelerated sales hiring. we're very pleased with this level of production particularly since it occurred while we accelerated sales hiring This gives us the confidence to continue hiring reps at a pace at least as high as last year's pace. this gives us the confidence to continue hiring reps at a pace at least as high as last year's pace Other key drivers are improving gross retention, better market positioning and awareness, higher yield on marketing spend, and improved partner contribution. We had a year of accelerating new logo growth while continuing to see significant engagement and upselling into our existing customers. The new logo growth is primarily driven from our corporate group, which has become a heck of a new business machine. We're finding that the complete platform pitch resonates extremely well with those customers because of the overwhelming amount of functionality and ease of use we bring to the market compared to all of the tool provider competitors. We plan to continue to lean into this category as we believe it can super-drive sustained, cost-effective, high growth. Other key drivers are improving gross retention, better market positioning and awareness, higher yield on marketing spend, and improved partner contribution. other key drivers are improving gross retention better market positioning and awareness higher yield on marketing spend and improved partner contribution We had a year of accelerating new logo growth while continuing to see significant engagement and upselling into our existing customers. we had a year of accelerating new logo growth while continuing to see significant engagement and upselling into our existing customers The new logo growth is primarily driven from our corporate group, which has become a heck of a new business machine. the new logo growth is primarily driven from our corporate group which has become a heck of a new business machine We're finding that the complete platform pitch resonates extremely well with those customers because of the overwhelming amount of functionality and ease of use we bring to the market compared to all of the tool provider competitors. we're finding that the complete platform pitch resonates extremely well with those customers because of the overwhelming amount of functionality and ease of use we bring to the market compared to all of the tool provider competitors We plan to continue to lean into this category as we believe it can super-drive sustained, cost-effective, high growth. we plan to continue to lean into this category as we believe it can super-drive sustained cost-effective high growth At the same time, we're making very good progress with great enterprise brands, which we expect can lead to even higher growth rates as we improve our new logo and upsell objectives with that part of the business. Enterprise deals tend to take longer because of the complexity of their infrastructure. We're getting better at finding the hooks to integrate into complex infrastructures. As that improves and our messaging around it improves, we should see acceleration in that business as well. Also, our partner strategy, which includes channel partners, technology partners, and application solution partners, will begin to focus more on enterprise customers. As that gets traction, it should also improve our momentum. At the same time, we're making very good progress with great enterprise brands, which we expect can lead to even higher growth rates as we improve our new logo and upsell objectives with that part of the business. at the same time we're making very good progress with great enterprise brands which we expect can lead to even higher growth rates as we improve our new logo and upsell objectives with that part of the business Enterprise deals tend to take longer because of the complexity of their infrastructure. enterprise deals tend to take longer because of the complexity of their infrastructure We're getting better at finding the hooks to integrate into complex infrastructures. we're getting better at finding the hooks to integrate into complex infrastructures As that improves and our messaging around it improves, we should see acceleration in that business as well. as that improves and our messaging around it improves we should see acceleration in that business as well Also, our partner strategy, which includes channel partners, technology partners, and application solution partners, will begin to focus more on enterprise customers. also our partner strategy which includes channel partners technology partners and application solution partners will begin to focus more on enterprise customers As that gets traction, it should also improve our momentum. as that gets traction it should also improve our momentum We delivered Q4 billings of $108 million, a strong year-over-year increase of 30%, driven by new customer additions, expansions into existing customers, and an over 90% gross retention rate. Net retention was about 105% on a revenue basis and was close to 110% on a contracted ARR basis. Our current RPO of $222 million grew 24% year over year, while our total RPO grew 20%. On a dollar-weighted measure, we now have 62% of our customers under multiyear contracts at the end of Q4, up from 60% a year ago. Q4 total revenue was $70 million, a year-over-year increase of 23%. This is a nice beat against our 18% guidance and is an acceleration from 21% growth in Q3. We delivered Q4 billings of $108 million, a strong year-over-year increase of 30%, driven by new customer additions, expansions into existing customers, and an over 90% gross retention rate. we delivered q4 billings of $108 million a strong year-over-year increase of 30% driven by new customer additions expansions into existing customers and an over 90% gross retention rate Net retention was about 105% on a revenue basis and was close to 110% on a contracted ARR basis. net retention was about 105% on a revenue basis and was close to 110% on a contracted arr basis Our current RPO of $222 million grew 24% year over year, while our total RPO grew 20%. our current rpo of $222 million grew 24% year over year while our total rpo grew 20% On a dollar-weighted measure, we now have 62% of our customers under multiyear contracts at the end of Q4, up from 60% a year ago. on a dollar-weighted measure we now have 62% of our customers under multiyear contracts at the end of q4 up from 60% a year ago Q4 total revenue was $70 million, a year-over-year increase of 23%. q4 total revenue was $70 million a year-over-year increase of 23% This is a nice beat against our 18% guidance and is an acceleration from 21% growth in Q3. this is a nice beat against our 18% guidance and is an acceleration from 21% growth in q3 Subscription revenue grew 19% year-over-year and represented 85% of total revenue. International revenue in the quarter represented 22% of total revenue, down from 24% last quarter due to the strength in our North America business. We had a very strong services revenue quarter driven by some of the large deals we talked about last quarter. Some of these have already converted to larger subscription deals, and over the next few quarters, we would expect to start to see subscription revenue growth surpass services growth. There are many factors that cause billings and revenue growth to diverge at times. Having said that, because we have sustained 25% billings growth rates for so many quarters, our revenue should begin to approach 25% growth. In fact, we expect to exit FY 2023 with subscription revenue growth of about 25%. Subscription revenue grew 19% year-over-year and represented 85% of total revenue. subscription revenue grew 19% year-over-year and represented 85% of total revenue International revenue in the quarter represented 22% of total revenue, down from 24% last quarter due to the strength in our North America business. international revenue in the quarter represented 22% of total revenue down from 24% last quarter due to the strength in our north america business We had a very strong services revenue quarter driven by some of the large deals we talked about last quarter. we had a very strong services revenue quarter driven by some of the large deals we talked about last quarter Some of these have already converted to larger subscription deals, and over the next few quarters, we would expect to start to see subscription revenue growth surpass services growth. some of these have already converted to larger subscription deals and over the next few quarters we would expect to start to see subscription revenue growth surpass services growth There are many factors that cause billings and revenue growth to diverge at times. there are many factors that cause billings and revenue growth to diverge at times Having said that, because we have sustained 25% billings growth rates for so many quarters, our revenue should begin to approach 25% growth. having said that because we have sustained 25% billings growth rates for so many quarters our revenue should begin to approach 25% growth In fact, we expect to exit FY 2023 with subscription revenue growth of about 25%. in fact we expect to exit fy 2023 with subscription revenue growth of about 25% As long as we can sustain 25% or better billings quarters, revenue should also be able to be sustained at those levels. Our subscription gross margin was 83%, up slightly from Q4 of last year and roughly in line with Q3. In Q4, operating expenses increased 26% from last year, primarily as we invest in our sales capacity and in part due to compensation expenses related to our strong Q4. Our net loss was $13.6 million, up from $9.8 million a year ago, and our net loss per share was $0.41. This is based on 32.8 million weighted average shares outstanding, basic and diluted. In Q4, we remained operating cash flow positive. Our cash balance was approximately $84 million, down slightly from last quarter. As long as we can sustain 25% or better billings quarters, revenue should also be able to be sustained at those levels. as long as we can sustain 25% or better billings quarters revenue should also be able to be sustained at those levels Our subscription gross margin was 83%, up slightly from Q4 of last year and roughly in line with Q3. our subscription gross margin was 83% up slightly from q4 of last year and roughly in line with q3 In Q4, operating expenses increased 26% from last year, primarily as we invest in our sales capacity and in part due to compensation expenses related to our strong Q4. in q4 operating expenses increased 26% from last year primarily as we invest in our sales capacity and in part due to compensation expenses related to our strong q4 Our net loss was $13.6 million, up from $9.8 million a year ago, and our net loss per share was $0.41. our net loss was $13.6 million up from $9.8 million a year ago and our net loss per share was $0.41 This is based on 32.8 million weighted average shares outstanding, basic and diluted. this is based on 32.8 million weighted average shares outstanding basic and diluted In Q4, we remained operating cash flow positive. in q4 we remained operating cash flow positive Our cash balance was approximately $84 million, down slightly from last quarter. our cash balance was approximately $84 million down slightly from last quarter Now to discuss what we expect in Q1 and the full year FY 2023. For Q1, we're guiding to year-over-year billings growth of approximately 23%. We expect our Q2 billings amount to be roughly in line with Q1 because of a tough compare due to the impact of large billings last year, and then expect modest acceleration in billings growth for the remainder of the year. For the current fiscal year, we're guiding to billings growth of about 22% year over year, as we have communicated before, striving for higher growth. On expenses, we're planning for Q1 operating expenses to increase from Q4 levels, primarily as a result of costs associated with our annual user conference in Q1 and as we continue to invest in our growth initiatives, particularly sales hiring. Now to discuss what we expect in Q1 and the full year FY 2023. now to discuss what we expect in q1 and the full year fy 2023 For Q1, we're guiding to year-over-year billings growth of approximately 23%. for q1 we're guiding to year-over-year billings growth of approximately 23% We expect our Q2 billings amount to be roughly in line with Q1 because of a tough compare due to the impact of large billings last year, and then expect modest acceleration in billings growth for the remainder of the year. we expect our q2 billings amount to be roughly in line with q1 because of a tough compare due to the impact of large billings last year and then expect modest acceleration in billings growth for the remainder of the year For the current fiscal year, we're guiding to billings growth of about 22% year over year, as we have communicated before, striving for higher growth. for the current fiscal year we're guiding to billings growth of about 22% year over year as we have communicated before striving for higher growth On expenses, we're planning for Q1 operating expenses to increase from Q4 levels, primarily as a result of costs associated with our annual user conference in Q1 and as we continue to invest in our growth initiatives, particularly sales hiring. on expenses we're planning for q1 operating expenses to increase from q4 levels primarily as a result of costs associated with our annual user conference in q1 and as we continue to invest in our growth initiatives particularly sales hiring Given all of our growth investments and our confidence in achieving enhanced growth results, we're planning for Q1 and FY 2023 adjusted net cash provided by operations to be slightly positive. Now to guidance for GAAP metrics. For the first quarter of FY 2023, we expect GAAP revenue to be in the range of $73.5 million-$74.5 million. If we're able to deliver more of the backlogs generated in Q4, we should be able to deliver more revenue than the guided amount. We expect non-GAAP net loss per share, basic and diluted of $0.38-$0.42. This assumes 33.3 million weighted average shares outstanding, basic and diluted. Given all of our growth investments and our confidence in achieving enhanced growth results, we're planning for Q1 and FY 2023 adjusted net cash provided by operations to be slightly positive. given all of our growth investments and our confidence in achieving enhanced growth results we're planning for q1 and fy 2023 adjusted net cash provided by operations to be slightly positive Now to guidance for GAAP metrics. now to guidance for gaap metrics For the first quarter of FY 2023, we expect GAAP revenue to be in the range of $73.5 million-$74.5 million. for the first quarter of fy 2023 we expect gaap revenue to be in the range of $73.5 million-$74.5 million If we're able to deliver more of the backlogs generated in Q4, we should be able to deliver more revenue than the guided amount. if we're able to deliver more of the backlogs generated in q4 we should be able to deliver more revenue than the guided amount We expect non-GAAP net loss per share, basic and diluted of $0.38-$0.42. we expect non-gaap net loss per share basic and diluted of $0.38-$0.42 This assumes 33.3 million weighted average shares outstanding, basic and diluted. this assumes 33.3 million weighted average shares outstanding basic and diluted For the full year of FY 2023, we expect GAAP revenue to be in the range of $314 million-$319 million, representing year-over-year growth of 22%-24%. We expect non-GAAP net loss per share, basic and diluted of $1.43-$1.53. This assumes 34.2 million weighted average shares outstanding, basic and diluted. In closing, we're pleased with our strong performance in Q4 and continue to believe we're well positioned to execute against our growth plans. With that, we'll open the call for questions. Operator? For the full year of FY 2023, we expect GAAP revenue to be in the range of $314 million-$319 million, representing year-over-year growth of 22%-24%. for the full year of fy 2023 we expect gaap revenue to be in the range of $314 million-$319 million representing year-over-year growth of 22%-24% We expect non-GAAP net loss per share, basic and diluted of $1.43-$1.53. we expect non-gaap net loss per share basic and diluted of $1.43-$1.53 This assumes 34.2 million weighted average shares outstanding, basic and diluted. this assumes 34.2 million weighted average shares outstanding basic and diluted In closing, we're pleased with our strong performance in Q4 and continue to believe we're well positioned to execute against our growth plans. in closing we're pleased with our strong performance in q4 and continue to believe we're well positioned to execute against our growth plans With that, we'll open the call for questions. with that we'll open the call for questions Operator? operator

Speaker 7: At this time, I would like to remind everyone in order to ask a question, please press star followed by the number 1 on your telephone keypad. Your first question comes from the line of Sanjit Singh with Morgan Stanley. Your line is open. At this time, I would like to remind everyone in order to ask a question, please press star followed by the number 1 on your telephone keypad. at this time i would like to remind everyone in order to ask a question please press star followed by the number 1 on your telephone keypad Your first question comes from the line of Sanjit Singh with Morgan Stanley. your first question comes from the line of sanjit singh with morgan stanley Your line is open. your line is open

Speaker 9: Thank you for taking the questions, and congrats on the really strong Q4. The guide was fantastic as well. I usually like to sort of start with the obvious, and I don't know who I should direct this to, but well, one's gonna be for John, just in terms of how he's thinking about 2022 and beyond. Just in terms of Josh stepping down from the role, sad to see him go. I think just in terms of the handoff of the transition, is there any sort of color you can provide there? That, you know, Josh is, you know, stepping off the board as well, so he's, you know, sort of exiting the company. Thank you for taking the questions, and congrats on the really strong Q4. thank you for taking the questions and congrats on the really strong q4 The guide was fantastic as well. the guide was fantastic as well I usually like to sort of start with the obvious, and I don't know who I should direct this to, but well, one's gonna be for John, just in terms of how he's thinking about 2022 and beyond. i usually like to sort of start with the obvious and i don't know who i should direct this to but well one's gonna be for john just in terms of how he's thinking about 2022 and beyond Just in terms of Josh stepping down from the role, sad to see him go. just in terms of josh stepping down from the role sad to see him go I think just in terms of the handoff of the transition, is there any sort of color you can provide there? i think just in terms of the handoff of the transition is there any sort of color you can provide there That, you know, Josh is, you know, stepping off the board as well, so he's, you know, sort of exiting the company. that you know josh is you know stepping off the board as well so he's you know sort of exiting the company Just in terms of the timing of the transition, given where the business is today in a really good spot, I think what I'm sort of struggling with is why Josh may not be around just to give John some mentorship in his first year as CEO. That's sort of the first question. Then the question for you, John. Thank you, congrats on the big promotion. If you think about the strategy of the company, and you sort of architected that strategy, right? As CEO, what ways should we expect Domo to change or not change going into next fiscal year and beyond? Those are my, you know, the first two questions. Just in terms of the timing of the transition, given where the business is today in a really good spot, I think what I'm sort of struggling with is why Josh may not be around just to give John some mentorship in his first year as CEO. just in terms of the timing of the transition given where the business is today in a really good spot i think what i'm sort of struggling with is why josh may not be around just to give john some mentorship in his first year as ceo That's sort of the first question. that's sort of the first question Then the question for you, John. then the question for you john Thank you, congrats on the big promotion. thank you congrats on the big promotion If you think about the strategy of the company, and you sort of architected that strategy, right? if you think about the strategy of the company and you sort of architected that strategy right As CEO, what ways should we expect Domo to change or not change going into next fiscal year and beyond? as ceo what ways should we expect domo to change or not change going into next fiscal year and beyond Those are my, you know, the first two questions. those are my you know the first two questions

Speaker 3: Great, Sanjit, and good talking to you. Appreciate the questions. Yeah, as you saw, Josh has stepped down from the board, has stepped down as CEO. You know, it's actually a really exciting time for the business. This is an opportunity to leverage the breadth and the depth of the management team. You know, this team that's here today has delivered these results, and we've got a passionate vision about how to continue to execute on those results. You know, I appreciate the question about my perspective because Domo has such a unique value proposition in this market. Great, Sanjit, and good talking to you. great sanjit and good talking to you Appreciate the questions. appreciate the questions Yeah, as you saw, Josh has stepped down from the board, has stepped down as CEO. yeah as you saw josh has stepped down from the board has stepped down as ceo You know, it's actually a really exciting time for the business. you know it's actually a really exciting time for the business This is an opportunity to leverage the breadth and the depth of the management team. this is an opportunity to leverage the breadth and the depth of the management team You know, this team that's here today has delivered these results, and we've got a passionate vision about how to continue to execute on those results. you know this team that's here today has delivered these results and we've got a passionate vision about how to continue to execute on those results You know, I appreciate the question about my perspective because Domo has such a unique value proposition in this market. you know i appreciate the question about my perspective because domo has such a unique value proposition in this market We've got an opportunity. I think my style is really about simplicity and focus on execution, right? Are we going after the right big strategic targets? Which I think we've proven that we are really making progress there. Are we investing in the right systems to run the business as it scales? We're making decisions now that need to be on the path of a billion-dollar revenue business. Of course, a big priority for me is employee experience. As we add more people, particularly to the sales organization, how do we do that with consistency? How do we do that in a way that maintains culture and inclusivity and just builds a high-performance team? There was kind of a lot there. I hope that answers your question. We've got an opportunity. we've got an opportunity I think my style is really about simplicity and focus on execution, right? i think my style is really about simplicity and focus on execution right Are we going after the right big strategic targets? are we going after the right big strategic targets Which I think we've proven that we are really making progress there. which i think we've proven that we are really making progress there Are we investing in the right systems to run the business as it scales? are we investing in the right systems to run the business as it scales We're making decisions now that need to be on the path of a billion-dollar revenue business. we're making decisions now that need to be on the path of a billion-dollar revenue business Of course, a big priority for me is employee experience. of course a big priority for me is employee experience As we add more people, particularly to the sales organization, how do we do that with consistency? as we add more people particularly to the sales organization how do we do that with consistency How do we do that in a way that maintains culture and inclusivity and just builds a high-performance team? how do we do that in a way that maintains culture and inclusivity and just builds a high-performance team There was kind of a lot there. there was kind of a lot there I hope that answers your question. i hope that answers your question

Speaker 9: Yeah. I appreciate the thought. Maybe one for Bruce, just in terms of the quarter, and particularly the conversion of the proof of concept for the services contract into subscription contracts. How much of a trend is that going to be going forward? In sort of larger enterprise customers, you know, starting with a you know sizable proof of concept, converting to seven-figure or hopefully six-figure type wins, is that kind of a new motion that we should expect going forward? You know, is services revenue essentially gonna tell us become a leading indicator of future subscription revenue growth, or is that kind of more bespoke to some of the large deals that you guys have been executing over the past year? Yeah. yeah I appreciate the thought. i appreciate the thought Maybe one for Bruce, just in terms of the quarter, and particularly the conversion of the proof of concept for the services contract into subscription contracts. maybe one for bruce just in terms of the quarter and particularly the conversion of the proof of concept for the services contract into subscription contracts How much of a trend is that going to be going forward? how much of a trend is that going to be going forward In sort of larger enterprise customers, you know, starting with a you know sizable proof of concept, converting to seven-figure or hopefully six-figure type wins, is that kind of a new motion that we should expect going forward? in sort of larger enterprise customers you know starting with a you know sizable proof of concept converting to seven-figure or hopefully six-figure type wins is that kind of a new motion that we should expect going forward You know, is services revenue essentially gonna tell us become a leading indicator of future subscription revenue growth, or is that kind of more bespoke to some of the large deals that you guys have been executing over the past year? you know is services revenue essentially gonna tell us become a leading indicator of future subscription revenue growth or is that kind of more bespoke to some of the large deals that you guys have been executing over the past year

Speaker 1: The trend of having proof of concepts convert at a very high rate in the closed deals has been here for quite some time. We have very high close rates. What makes this unique is it was just much larger dollars just because of the size and scale of the customer. We may see more of those because it's highly comforting to large enterprises to know the product's gonna work in the use case they have in mind before they fully commit. You know, as our enterprise motion gets higher and more traction, it wouldn't be surprising to see that. I wouldn't necessarily conclude that services is a leading indicator generally. I think proof of concepts are. We really do believe we're in the subscription business. We do everything we can to maximize that. The trend of having proof of concepts convert at a very high rate in the closed deals has been here for quite some time. the trend of having proof of concepts convert at a very high rate in the closed deals has been here for quite some time We have very high close rates. we have very high close rates What makes this unique is it was just much larger dollars just because of the size and scale of the customer. what makes this unique is it was just much larger dollars just because of the size and scale of the customer We may see more of those because it's highly comforting to large enterprises to know the product's gonna work in the use case they have in mind before they fully commit. we may see more of those because it's highly comforting to large enterprises to know the product's gonna work in the use case they have in mind before they fully commit You know, as our enterprise motion gets higher and more traction, it wouldn't be surprising to see that. you know as our enterprise motion gets higher and more traction it wouldn't be surprising to see that I wouldn't necessarily conclude that services is a leading indicator generally. i wouldn't necessarily conclude that services is a leading indicator generally I think proof of concepts are. i think proof of concepts are We really do believe we're in the subscription business. we really do believe we're in the subscription business We do everything we can to maximize that. we do everything we can to maximize that Our services organization is there to ensure a smooth start and successful start, and we know that's critical to having high renewal rates. It's always gonna be a big part of our business. We actually would like to see more and more come from partners. Partner source is one of our big focused areas. That large auto manufacturer actually was a partner source deal. We hope that is a trend, that we see more of them in the large enterprises. Just continuing to have high success rates with POCs turning into closed business, that's been here for quite some time. Our services organization is there to ensure a smooth start and successful start, and we know that's critical to having high renewal rates. our services organization is there to ensure a smooth start and successful start and we know that's critical to having high renewal rates It's always gonna be a big part of our business. it's always gonna be a big part of our business We actually would like to see more and more come from partners. we actually would like to see more and more come from partners Partner source is one of our big focused areas. partner source is one of our big focused areas That large auto manufacturer actually was a partner source deal. that large auto manufacturer actually was a partner source deal We hope that is a trend, that we see more of them in the large enterprises. we hope that is a trend that we see more of them in the large enterprises Just continuing to have high success rates with POCs turning into closed business, that's been here for quite some time. just continuing to have high success rates with pocs turning into closed business that's been here for quite some time

Speaker 9: Got it. Thanks a lot. Got it. got it Thanks a lot. thanks a lot

Speaker 7: Your next question comes from the line of Derrick Wood with Cowen. Your line is open. Your next question comes from the line of Derrick Wood with Cowen. your next question comes from the line of derrick wood with cowen Your line is open. your line is open

Speaker 2: Great. Thanks, and just wanna wish Josh success in his next chapter. First question, I guess, John, for you. You know, we knew Ian and Wolf were focused on closing out a strong Q4. You guys did a great job. But I think that there's, you know, maybe some go-to-market tweaks expected to come with Wolf at the helm and now you. Just curious on a few things. First, it sounds like you wanna have a balance of transactional and large deal activity. I think the incremental effort sounds like it'll be more around how do you drive more large deal conversions. Would love to hear your thoughts there. Great. great Thanks, and just wanna wish Josh success in his next chapter. thanks and just wanna wish josh success in his next chapter First question, I guess, John, for you. first question i guess john for you You know, we knew Ian and Wolf were focused on closing out a strong Q4. you know we knew ian and wolf were focused on closing out a strong q4 You guys did a great job. you guys did a great job But I think that there's, you know, maybe some go-to-market tweaks expected to come with Wolf at the helm and now you. but i think that there's you know maybe some go-to-market tweaks expected to come with wolf at the helm and now you Just curious on a few things. just curious on a few things First, it sounds like you wanna have a balance of transactional and large deal activity. first it sounds like you wanna have a balance of transactional and large deal activity I think the incremental effort sounds like it'll be more around how do you drive more large deal conversions. i think the incremental effort sounds like it'll be more around how do you drive more large deal conversions Would love to hear your thoughts there. would love to hear your thoughts there Just thoughts about verticalizing the sales force or what kind of new development we could see on the partner side would be helpful. Just thoughts about verticalizing the sales force or what kind of new development we could see on the partner side would be helpful. just thoughts about verticalizing the sales force or what kind of new development we could see on the partner side would be helpful

Speaker 3: Sure. Great. Thanks, Derek. Appreciate the question. Yeah, you know, the go-to-market engine, you know, I think it's constantly in a state of tweak certainly. There's some really good traction that the team has seen, as we've seen over the last few quarters. You know, you've got parts of the business, as we've talked about, the corporate business, where that engine is really working. You hear the excitement from the team and even the excitement from Bruce. That engine is working, and we've got an opportunity to continue to focus on that business while starting to really push some more focus on the enterprise. Sure. sure Great. great Thanks, Derek. thanks derek Appreciate the question. appreciate the question Yeah, you know, the go-to-market engine, you know, I think it's constantly in a state of tweak certainly. yeah you know the go-to-market engine you know i think it's constantly in a state of tweak certainly There's some really good traction that the team has seen, as we've seen over the last few quarters. there's some really good traction that the team has seen as we've seen over the last few quarters You know, you've got parts of the business, as we've talked about, the corporate business, where that engine is really working. you know you've got parts of the business as we've talked about the corporate business where that engine is really working You hear the excitement from the team and even the excitement from Bruce. you hear the excitement from the team and even the excitement from bruce That engine is working, and we've got an opportunity to continue to focus on that business while starting to really push some more focus on the enterprise. that engine is working and we've got an opportunity to continue to focus on that business while starting to really push some more focus on the enterprise That's where it gets exciting, and I know that Wolf and Ian are both, you know, very excited about the opportunities there because as you mentioned, verticalizing these solutions helps us align with our strategy of putting data to work for everyone in an organization. That's slightly different when you're talking about retail or when you're talking about financial services or manufacturing. Being able to crisply talk about the value of Domo in each of those industries or verticals is something that we see as an opportunity for incremental improvement with lead generation, deal closure, et cetera. It really helps us speak the language of the customer. That's where it gets exciting, and I know that Wolf and Ian are both, you know, very excited about the opportunities there because as you mentioned, verticalizing these solutions helps us align with our strategy of putting data to work for everyone in an organization. that's where it gets exciting and i know that wolf and ian are both you know very excited about the opportunities there because as you mentioned verticalizing these solutions helps us align with our strategy of putting data to work for everyone in an organization That's slightly different when you're talking about retail or when you're talking about financial services or manufacturing. that's slightly different when you're talking about retail or when you're talking about financial services or manufacturing Being able to crisply talk about the value of Domo in each of those industries or verticals is something that we see as an opportunity for incremental improvement with lead generation, deal closure, et cetera. being able to crisply talk about the value of domo in each of those industries or verticals is something that we see as an opportunity for incremental improvement with lead generation deal closure et cetera It really helps us speak the language of the customer. it really helps us speak the language of the customer

Speaker 2: Great. Thanks. Maybe one for Bruce. Certainly encouraging to see the strong top-line guide and the confidence in revenue growth converging to the ARR growth levels you've been seeing. But I wanted to talk about the bottom line. EPS is expected to be lower in fiscal 2023 versus 2022. How much of a factor is that coming from maybe a higher PS mix and some pressure on gross margin? How much is coming just from the OpEx investment, sales hiring and back to work expenses and things like that? What does that really imply on the op margins side? Great. great Thanks. thanks Maybe one for Bruce. maybe one for bruce Certainly encouraging to see the strong top-line guide and the confidence in revenue growth converging to the ARR growth levels you've been seeing. certainly encouraging to see the strong top-line guide and the confidence in revenue growth converging to the arr growth levels you've been seeing But I wanted to talk about the bottom line. but i wanted to talk about the bottom line EPS is expected to be lower in fiscal 2023 versus 2022. eps is expected to be lower in fiscal 2023 versus 2022 How much of a factor is that coming from maybe a higher PS mix and some pressure on gross margin? how much of a factor is that coming from maybe a higher ps mix and some pressure on gross margin How much is coming just from the OpEx investment, sales hiring and back to work expenses and things like that? how much is coming just from the opex investment sales hiring and back to work expenses and things like that What does that really imply on the op margins side? what does that really imply on the op margins side

Speaker 1: Yeah. First of all, we, you know, we got a lot of questions during last year about what is our posture on investing going forward. Our response was, well, we just have to see how this year works, closes out. We were pretty clear that if we really saw the unit economics working and the momentum there, our strong preference is to take any available extra investment dollars and put them toward growth. By that we mean whatever is generally generated in cash flow beyond, you know, our break-even status. As I sit here right now, I'm just very bullish on the business. I think we have incredible number of initiatives working for us. Underlying the billings growth was even stronger new ACV growth. Supporting that was even a stronger recurring ACV growth. Yeah. yeah First of all, we, you know, we got a lot of questions during last year about what is our posture on investing going forward. first of all we you know we got a lot of questions during last year about what is our posture on investing going forward Our response was, well, we just have to see how this year works, closes out. our response was well we just have to see how this year works closes out We were pretty clear that if we really saw the unit economics working and the momentum there, our strong preference is to take any available extra investment dollars and put them toward growth. we were pretty clear that if we really saw the unit economics working and the momentum there our strong preference is to take any available extra investment dollars and put them toward growth By that we mean whatever is generally generated in cash flow beyond, you know, our break-even status. by that we mean whatever is generally generated in cash flow beyond you know our break-even status As I sit here right now, I'm just very bullish on the business. as i sit here right now i'm just very bullish on the business I think we have incredible number of initiatives working for us. i think we have incredible number of initiatives working for us Underlying the billings growth was even stronger new ACV growth. underlying the billings growth was even stronger new acv growth Supporting that was even a stronger recurring ACV growth. supporting that was even a stronger recurring acv growth With Wolf in the mix, and Ian extremely engaged, who built the engine to really make this happen this last year. I mean, the combination of that talent is certainly working together on making sure that we just keep this momentum going. When we say we want to invest more, it really will be in sales hiring first, the supporting infrastructure to make sure that we can maintain these productivity levels. We'll try to get as much leverage we can out of the other line items to frankly afford more investment in growth. We're just setting up the infrastructure to have many quarters of nice, sustained growth at rates we've always been striving to get. If we really keep it up, then we can go into even a higher zip code of growth. With Wolf in the mix, and Ian extremely engaged, who built the engine to really make this happen this last year. with wolf in the mix and ian extremely engaged who built the engine to really make this happen this last year I mean, the combination of that talent is certainly working together on making sure that we just keep this momentum going. i mean the combination of that talent is certainly working together on making sure that we just keep this momentum going When we say we want to invest more, it really will be in sales hiring first, the supporting infrastructure to make sure that we can maintain these productivity levels. when we say we want to invest more it really will be in sales hiring first the supporting infrastructure to make sure that we can maintain these productivity levels We'll try to get as much leverage we can out of the other line items to frankly afford more investment in growth. we'll try to get as much leverage we can out of the other line items to frankly afford more investment in growth We're just setting up the infrastructure to have many quarters of nice, sustained growth at rates we've always been striving to get. we're just setting up the infrastructure to have many quarters of nice sustained growth at rates we've always been striving to get If we really keep it up, then we can go into even a higher zip code of growth. if we really keep it up then we can go into even a higher zip code of growth Now this year, we'll have to see how it plays out, but I have a lot more confidence as I sit here at the beginning of this year than at the beginning of last year. I mean, the beginning of last year, our guidance was something like 16% growth, and now we're well into the 20s. There's a lot of drivers in play that have yet to be realized. More to come when we get to the user conference coming up. We'll go through those drivers again, just like we did last year. Yeah, that's the thinking behind the philosophy of investing and, you know, trying to stay cash flow positive while we really take advantage of everything we see in front of us. Now this year, we'll have to see how it plays out, but I have a lot more confidence as I sit here at the beginning of this year than at the beginning of last year. now this year we'll have to see how it plays out but i have a lot more confidence as i sit here at the beginning of this year than at the beginning of last year I mean, the beginning of last year, our guidance was something like 16% growth, and now we're well into the 20s. i mean the beginning of last year our guidance was something like 16% growth and now we're well into the 20s There's a lot of drivers in play that have yet to be realized. there's a lot of drivers in play that have yet to be realized More to come when we get to the user conference coming up. more to come when we get to the user conference coming up We'll go through those drivers again, just like we did last year. we'll go through those drivers again just like we did last year Yeah, that's the thinking behind the philosophy of investing and, you know, trying to stay cash flow positive while we really take advantage of everything we see in front of us. yeah that's the thinking behind the philosophy of investing and you know trying to stay cash flow positive while we really take advantage of everything we see in front of us

Speaker 2: Yeah. That's really great to hear. Just to clarify, you are expecting positive operating cash flow for the year? Yeah. yeah That's really great to hear. that's really great to hear Just to clarify, you are expecting positive operating cash flow for the year? just to clarify you are expecting positive operating cash flow for the year

Speaker 1: Yes. Yes. yes

Speaker 2: Okay. That's great. Thanks for taking my questions. Okay. okay That's great. that's great Thanks for taking my questions. thanks for taking my questions

Speaker 1: You're welcome. You're welcome. you're welcome

Speaker 3: Thanks, Derrick. Thanks, Derrick. thanks derrick

Speaker 7: Your next question comes from the line of Kamil Mielczarek with William Blair. Your line is open. Your next question comes from the line of Kamil Mielczarek with William Blair. your next question comes from the line of kamil mielczarek with william blair Your line is open. your line is open

Speaker 6: Thanks for taking my question. John, congratulations on the promotion. I'd like to hear your thoughts on the product roadmap longer term. How are you thinking about the evolution of the Domo platform over the next few years? And what are some of the holes in the product portfolio today? And how do you think about prioritizing R&D investments? Any color you can provide there would be great. Thanks for taking my question. thanks for taking my question John, congratulations on the promotion. john congratulations on the promotion I'd like to hear your thoughts on the product roadmap longer term. i'd like to hear your thoughts on the product roadmap longer term How are you thinking about the evolution of the Domo platform over the next few years? how are you thinking about the evolution of the domo platform over the next few years And what are some of the holes in the product portfolio today? and what are some of the holes in the product portfolio today And how do you think about prioritizing R&D investments? and how do you think about prioritizing r&d investments Any color you can provide there would be great. any color you can provide there would be great

Speaker 3: Yeah, sure. You know, we've got a lot queued up for our annual customer event coming up here in just a few weeks at Domopalooza. I won't steal too much of the team's thunder from that. You know, I will say that as we've talked about in a few earnings calls, one of the real interesting areas that we're seeing is this concept of apps that are driven by data focused on taking action. Right? Yeah, sure. yeah sure You know, we've got a lot queued up for our annual customer event coming up here in just a few weeks at Domopalooza. you know we've got a lot queued up for our annual customer event coming up here in just a few weeks at domopalooza I won't steal too much of the team's thunder from that. i won't steal too much of the team's thunder from that You know, I will say that as we've talked about in a few earnings calls, one of the real interesting areas that we're seeing is this concept of apps that are driven by data focused on taking action. you know i will say that as we've talked about in a few earnings calls one of the real interesting areas that we're seeing is this concept of apps that are driven by data focused on taking action Right? right This is it really kind of breaks the mold of traditional BI and allows data to be combined with workflow, wrapped in an experience, and put right in the hands, meaning right on the phone, on the tablet, the device of people making decisions, which it breaks out of traditional BI because instead of low single-digit% adoption of BI in an organization, you move to the whole company having an opportunity to use data to really drive their business and truly take action. That's a really big push. You know, one of the exciting situations that Domo's in, given its success with customers, and especially big customers, is, you know, those folks tend to be the best drivers of roadmap. This is it really kind of breaks the mold of traditional BI and allows data to be combined with workflow, wrapped in an experience, and put right in the hands, meaning right on the phone, on the tablet, the device of people making decisions, which it breaks out of traditional BI because instead of low single-digit% adoption of BI in an organization, you move to the whole company having an opportunity to use data to really drive their business and truly take action. this is it really kind of breaks the mold of traditional bi and allows data to be combined with workflow wrapped in an experience and put right in the hands meaning right on the phone on the tablet the device of people making decisions which it breaks out of traditional bi because instead of low single-digit% adoption of bi in an organization you move to the whole company having an opportunity to use data to really drive their business and truly take action That's a really big push. that's a really big push You know, one of the exciting situations that Domo's in, given its success with customers, and especially big customers, is, you know, those folks tend to be the best drivers of roadmap. you know one of the exciting situations that domo's in given its success with customers and especially big customers is you know those folks tend to be the best drivers of roadmap Making your customers happy tends to really make your product better, and it makes your product more approachable and better for other customers. I think if you've heard Catherine Wong, our EVP of product and now Chief Operating Officer, talk about the big customers, she has embraced the customers that scare you, because those are the customers that give you real roadmap acceleration. Making your customers happy tends to really make your product better, and it makes your product more approachable and better for other customers. making your customers happy tends to really make your product better and it makes your product more approachable and better for other customers I think if you've heard Catherine Wong, our EVP of product and now Chief Operating Officer, talk about the big customers, she has embraced the customers that scare you, because those are the customers that give you real roadmap acceleration. i think if you've heard catherine wong our evp of product and now chief operating officer talk about the big customers she has embraced the customers that scare you because those are the customers that give you real roadmap acceleration

Speaker 6: That's helpful. Thanks. Then, maybe one for Bruce. It's been great to hear about the productivity improvements, and despite that, you've continued to step up quota-carrying headcount throughout the year. Thinking out longer term, how are you thinking about the pace of margin expansion relative to investments back in the business? If we see more of the same in productivity, did you plan to continue to accelerate quota-carrying headcount growth? Or is there a point where maybe you let some of those strong sales flow through the model and expand free cash flow margin? That's helpful. that's helpful Thanks. thanks Then, maybe one for Bruce. then maybe one for bruce It's been great to hear about the productivity improvements, and despite that, you've continued to step up quota-carrying headcount throughout the year. it's been great to hear about the productivity improvements and despite that you've continued to step up quota-carrying headcount throughout the year Thinking out longer term, how are you thinking about the pace of margin expansion relative to investments back in the business? If we see more of the same in productivity, did you plan to continue to accelerate quota-carrying headcount growth? thinking out longer term how are you thinking about the pace of margin expansion relative to investments back in the business? if we see more of the same in productivity did you plan to continue to accelerate quota-carrying headcount growth Or is there a point where maybe you let some of those strong sales flow through the model and expand free cash flow margin? or is there a point where maybe you let some of those strong sales flow through the model and expand free cash flow margin

Speaker 1: The basic, more or less philosophy on timeframe was, as soon as productivity hit a level that we thought was quite respectable, let's definitely lean into that, well, in the first year, which was last year, and see how that goes. Certainly another full year of that, which is the year we're in, as just supplying good baseline foundational growth to the business. That gives us the time to keep developing the other drivers, which are more yield out of marketing, certainly the partner area. We still think we have a lot of upside in what we get out of the large enterprise business, just landing more and expanding faster. You know, better positioning in the market. We're still the one platform-agnostic software company in the space. The basic, more or less philosophy on timeframe was, as soon as productivity hit a level that we thought was quite respectable, let's definitely lean into that, well, in the first year, which was last year, and see how that goes. the basic more or less philosophy on timeframe was as soon as productivity hit a level that we thought was quite respectable let's definitely lean into that well in the first year which was last year and see how that goes Certainly another full year of that, which is the year we're in, as just supplying good baseline foundational growth to the business. certainly another full year of that which is the year we're in as just supplying good baseline foundational growth to the business That gives us the time to keep developing the other drivers, which are more yield out of marketing, certainly the partner area. that gives us the time to keep developing the other drivers which are more yield out of marketing certainly the partner area We still think we have a lot of upside in what we get out of the large enterprise business, just landing more and expanding faster. we still think we have a lot of upside in what we get out of the large enterprise business just landing more and expanding faster You know, better positioning in the market. you know better positioning in the market We're still the one platform-agnostic software company in the space. we're still the one platform-agnostic software company in the space We're gonna accrue benefits for being that and keep building out the platform with very interesting apps, keep expanding the use of Domo Everywhere. That might take pressure off. That should take pressure ultimately off needing to scale with just sales hiring. Our hope is, yeah, we get these other drivers working, and we start getting leverage out of it so that that gives us, you know, more room to allow some of it to flow through on the margin line. Let me point out, we're now getting to a point where this year we'll charge through $300 million of ARR. I don't have to tell you how profitable that is in the SaaS business. It's highly profitable. We could allow, you know, as much as we want to flow through. We're gonna accrue benefits for being that and keep building out the platform with very interesting apps, keep expanding the use of Domo Everywhere. we're gonna accrue benefits for being that and keep building out the platform with very interesting apps keep expanding the use of domo everywhere That might take pressure off. that might take pressure off That should take pressure ultimately off needing to scale with just sales hiring. that should take pressure ultimately off needing to scale with just sales hiring Our hope is, yeah, we get these other drivers working, and we start getting leverage out of it so that that gives us, you know, more room to allow some of it to flow through on the margin line. our hope is yeah we get these other drivers working and we start getting leverage out of it so that that gives us you know more room to allow some of it to flow through on the margin line Let me point out, we're now getting to a point where this year we'll charge through $300 million of ARR. let me point out we're now getting to a point where this year we'll charge through $300 million of arr I don't have to tell you how profitable that is in the SaaS business. i don't have to tell you how profitable that is in the saas business It's highly profitable. it's highly profitable We could allow, you know, as much as we want to flow through. we could allow you know as much as we want to flow through We just happen to be in this very unique time where we've had challenged growth in the past. We finally see the economics working in our favor. We think we're extremely well-positioned. We have a extremely energized management team as I sit here right now. We think we should turn that into lots of growth points. It'll cost us a little bit of money, but in the long run, with the recurring revenue model, you know it puts us in a position to allow that to become profit at any point in time. That's the basic philosophy as we sit here right now. We just happen to be in this very unique time where we've had challenged growth in the past. we just happen to be in this very unique time where we've had challenged growth in the past We finally see the economics working in our favor. we finally see the economics working in our favor We think we're extremely well-positioned. we think we're extremely well-positioned We have a extremely energized management team as I sit here right now. we have a extremely energized management team as i sit here right now We think we should turn that into lots of growth points. we think we should turn that into lots of growth points It'll cost us a little bit of money, but in the long run, with the recurring revenue model, you know it puts us in a position to allow that to become profit at any point in time. it'll cost us a little bit of money but in the long run with the recurring revenue model you know it puts us in a position to allow that to become profit at any point in time That's the basic philosophy as we sit here right now. that's the basic philosophy as we sit here right now That's great color, Bruce. Thanks, and, congrats again on the strong results and the strong year. That's great color, Bruce. that's great color bruce Thanks, and, congrats again on the strong results and the strong year. thanks and congrats again on the strong results and the strong year Well, thank you. Well, thank you. well thank you

Speaker 7: There are no further questions at this time. This does conclude today's conference call. Thank you for joining. You may now disconnect. There are no further questions at this time. there are no further questions at this time This does conclude today's conference call. this does conclude today's conference call Thank you for joining. thank you for joining You may now disconnect. you may now disconnect