Breaking Down Domo, Inc. (DOMO) Financial Health: Key Insights for Investors

You're looking at Domo, Inc. (DOMO) and trying to map the future of a software company that's showing real momentum in its forward-looking metrics, but still bleeding cash today, and honestly, that's a tough spot to analyze. For fiscal year 2025, the company pulled in a total revenue of $317.0 million, which is solid, but that was overshadowed by a GAAP net loss of $81.9 million, meaning they're still burning capital to fuel growth. Still, the underlying story is shifting: they hit a 0% Non-GAAP Operating Margin for the full year, a huge step toward breakeven, and subscription Remaining Performance Obligations (RPO)-that's future contracted revenue-jumped 14% year-over-year to $403.6 million as of January 31, 2025. That RPO growth defintely shows customers are committing for the long haul, plus they even reported their first-ever positive non-GAAP earnings per share in Q2 2025. The market seems to be pricing in the risk, with the stock trading around $11.35, well below the consensus target of $17, so we need to break down if the path to true profitability justifies the current valuation.

Revenue Analysis

You need to know where Domo, Inc. (DOMO)'s money is actually coming from, because the headline revenue number for fiscal year 2025 (FY2025) is a little misleading. The direct takeaway is this: Domo's core subscription business is holding steady and building a stronger long-term backlog, even as total reported revenue saw a slight dip due to non-core services.

For the full FY2025, which ended January 31, 2025, Domo reported total revenue of $317.0 million. Here's the critical breakdown: the vast majority of this revenue-a whopping $286.0 million-came from Subscription services, which is the steady, recurring income stream every software-as-a-service (SaaS) investor wants to see. The remaining $31.0 million was generated by Professional Services and other revenue. That's the quick math on their business model.

• Subscription Revenue: $286.0 million (approx. 90.2% of total)
• Professional Services/Other Revenue: $31.0 million (approx. 9.8% of total)

When you look at the year-over-year growth, the total revenue figure for Domo was $317.0 million, which was a slight decrease of -0.61% from the previous fiscal year. This near-flat growth is a headwind, but it's important to understand why. The Subscription revenue was essentially flat year-over-year, but the decline stemmed from the more volatile Professional Services segment. This non-core revenue is less strategic, and its dip is what pulled the total revenue number down.

The real opportunity is buried in the shift in their business model. Domo is actively transitioning to a consumption-based pricing model, moving away from traditional seat-based licenses. This new model now represents 55% of their Annual Recurring Revenue (ARR) as of Q3 FY2025, and all new customer contracts in that quarter were consumption-based. This pivot is a long-term play that should better align customer value with usage, but it can make near-term revenue recognition look bumpy-a common challenge during model transitions.

To be fair, management is pointing to Subscription Remaining Performance Obligations (RPO) as the better leading indicator, and for good reason. RPO is the backlog of future subscription revenue under contract. As of January 31, 2025, Domo's Subscription RPO stood at $403.6 million, which is a healthy 14% increase year-over-year. This defintely suggests that long-term demand for the core platform remains strong, despite the flat revenue. This is a crucial distinction for investors to make.

For a deeper dive into the company's risks and opportunities, you can check out the full analysis at Breaking Down Domo, Inc. (DOMO) Financial Health: Key Insights for Investors. Your next step should be to look closely at their gross margin trends to see how the increased third-party hosting costs are impacting profitability.

Profitability Metrics

You want to know if Domo, Inc. (DOMO) is finally turning the corner on profitability. The short answer for fiscal year (FY) 2025 is no, not yet on a GAAP basis, but they are showing clear operational efficiency gains that matter for a software-as-a-service (SaaS) company. Your focus should be on the gross margin and the non-GAAP operating margin, as those tell the real story of their core business health.

For the full FY 2025, which ended January 31, 2025, Domo, Inc. reported total revenue of $317.0 million. This is the base for all your margin calculations. The company's GAAP (Generally Accepted Accounting Principles) net loss for the year was $81.9 million, resulting in a Net Profit Margin of approximately -25.8%. That's a deep loss, still typical for a growth-focused SaaS firm, but it's defintely something to watch.

Here's the quick math on the key profitability ratios for FY 2025:

The 74% Gross Profit Margin is the first number that should grab your attention. For a SaaS business, you want to see this figure at 75% or higher, so Domo, Inc. is right on the cusp of the industry benchmark. This margin is what's left after paying for the cost of delivering the service-things like cloud hosting and customer support. It shows the fundamental pricing power and efficiency of their platform.

Looking at the trends, the Gross Margin actually slipped a bit, down from 76% in the previous year to 74% in FY 2025. The company attributed this decline directly to increased costs for third-party web hosting services, which is a clear operational challenge they need to manage better as they scale the platform and its AI capabilities. This is a critical point for anyone Exploring Domo, Inc. (DOMO) Investor Profile: Who's Buying and Why?

When you compare the GAAP Operating Margin of -19% to the industry, Domo, Inc. is lagging. The median operating margin for a cohort of SaaS companies in Q1 2025 was around -9%, so Domo, Inc.'s GAAP figure is notably worse than the median. However, their Non-GAAP Operating Margin was 0% for FY 2025, which strips out non-cash items like stock-based compensation and amortization. That 0% non-GAAP figure is a major milestone, showing the core business broke even operationally before those non-cash charges.

The operational efficiency story is actually positive, despite the GAAP loss. Domo, Inc. managed to reduce its total operating expenses to $295.3 million in FY 2025, down from $298.4 million in the prior year. They did this by cutting Sales and Marketing expenses by $12.4 million, a sign of tighter cost management and a shift toward more efficient, partner-led growth strategies. That's a strong signal of a management team focused on the bottom line, even if the net loss still grew to $81.9 million due to other factors.

• Gross Margin is strong at 74%, near the 75% SaaS benchmark.
• GAAP Operating Margin of -19% is below the median SaaS loss of -9%.
• Non-GAAP Operating Margin hit 0%, a key operational breakeven point.
• Cost management is improving, with a $12.4 million reduction in Sales and Marketing spend.

Debt vs. Equity Structure

You're looking at Domo, Inc.'s balance sheet and trying to gauge its financial risk, and the first thing that jumps out is the unusual capital structure. The direct takeaway is this: Domo, Inc. relies heavily on debt relative to its equity, but it has recently taken concrete steps to de-risk its near-term obligations, buying itself time to achieve consistent profitability.

As of its fiscal year 2025 reporting, Domo, Inc. carries a total debt of approximately $135.53 million. This breaks down into a small sliver of short-term debt at just $10.17 million, with the bulk-$125.36 million-sitting as long-term debt. This structure is typical for a growth-focused Software-as-a-Service (SaaS) company that has historically prioritized product development and market share over immediate net income, but the key metric, the debt-to-equity (D/E) ratio, tells a more complex story.

The company's D/E ratio for fiscal year 2025 stands at -0.76. Here's the quick math: a negative D/E ratio means the company has a stockholders' deficit-its total liabilities exceed its total assets, wiping out shareholder equity. This is a significant red flag compared to the industry median for SaaS companies, which is a conservative 5.2% (or 0.052) in 2025, reflecting a broader trend of deleveraging and a focus on profitability in the software sector.

• Total Debt (FY 2025): $135.53 million.
• Long-Term Debt: $125.36 million.
• Debt-to-Equity Ratio: -0.76.

To be fair, Domo, Inc. has been proactive in managing this debt. The company executed a crucial debt amendment in August 2024, extending the maturity of its facility with BlackRock-managed funds all the way to August 2028. This move was smart; it pushed a significant near-term risk-the original debt was due in April 2025-further out, and it also reduced the overall interest rate. That's a defintely a positive for cash flow, giving the company a longer runway to execute its plan for profitability.

The financing strategy is a tightrope walk between debt and equity. Because of the negative equity position, raising capital through traditional equity offerings can be highly dilutive to existing shareholders. So, the company has leaned on secured term loans (debt financing), primarily from institutional lenders like BlackRock, to fund its operations and growth initiatives. This debt-heavy approach is a calculated risk, betting that future cash flow from its cloud-native data experience platform will be sufficient to service the debt and eventually flip that negative equity to a positive value. You can read more about the long-term strategy here: Mission Statement, Vision, & Core Values of Domo, Inc. (DOMO).

What this estimate hides is the reliance on the continued support of its current debt holders. The extension to 2028 is a vote of confidence from BlackRock, but the company must show sustained progress toward positive free cash flow to avoid another high-stakes refinancing discussion in a few years. For investors, the focus must be on the pace of cash generation, not just revenue growth, to see how quickly Domo, Inc. can outgrow its current capital structure challenges.

Liquidity and Solvency

You want to know if Domo, Inc. (DOMO) has the cash to cover its near-term bills. The quick answer is that while the company's traditional liquidity ratios flash a warning sign, their recent operational cash flow trend in 2025 shows a crucial pivot toward self-funding, which is a major strength.

For the full fiscal year 2025, which ended January 31, 2025, Domo, Inc.'s liquidity position was tight. The company's Current Ratio at that time was only 0.56, meaning it had only 56 cents in current assets for every dollar of current liabilities. By the second quarter of fiscal year 2026 (July 2025), this ratio had dipped further to 0.48. The Quick Ratio, which strips out less-liquid assets like inventory (though minimal for a software company), was even lower at 0.38 as of October 2025 (TTM). Anything below 1.0 suggests a defintely challenging short-term position, and Domo, Inc. is operating with a significant liquidity gap.

Working Capital and Cash Flow Trends

This low ratio translates directly to a negative working capital (current assets minus current liabilities). At the end of FY2025, Domo, Inc.'s working capital was negative $113.272 million, which widened to approximately negative $128.96 million by July 2025. This negative trend is a risk, but for a subscription-based software company, it's often driven by deferred revenue-cash collected upfront for services not yet delivered-which is a liability but a sign of future revenue strength. Still, you can't pay vendors with deferred revenue, so the cash flow statement is the real tie-breaker here.

Here's the quick math on their cash generation for the full fiscal year 2025 and the recent shift:

• FY2025 Operating Cash Flow: Net cash used in operating activities was $9.1 million.
• FY2025 Adjusted Free Cash Flow: This was negative $12.9 million for the full year.

The good news is the recent trend. In the first quarter of fiscal year 2026 (ending April 30, 2025), the company flipped the script, reporting net cash provided by operating activities of $4.0 million. This positive momentum continued, with adjusted free cash flow hitting $1.3 million in Q1 FY2026 and increasing to $1.4 million in Q2 FY2026 (July 2025). This shift from cash-burning to cash-generating operations is the single most important metric for a growth-focused software firm like Domo, Inc.

What this estimate hides is the investing and financing side. The company's cash from investing activities (TTM) was negative $9.99 million, primarily due to capital expenditures, which is normal. Their cash balance has been relatively stable, sitting at $47.2 million as of April 30, 2025, up from $45.3 million at the FY2025 year-end. The core issue isn't a lack of cash right now, but the structural imbalance between current assets and liabilities, which relies heavily on their ability to maintain positive operating cash flow. The fact that they've started generating cash from core operations is a major step toward solvency, which you can read more about in our full post: Breaking Down Domo, Inc. (DOMO) Financial Health: Key Insights for Investors.

Valuation Analysis

The short answer is that Domo, Inc. (DOMO) is a growth stock currently trading at a discount compared to its analyst consensus, suggesting it is undervalued on a forward-looking basis, but its negative profitability metrics flag a clear risk. You need to look past simple ratios and focus on the Enterprise Value-to-Sales multiple, which is a better gauge for a company still prioritizing market share over immediate profit, but its path to profitability is defintely the core issue.

When you look at traditional valuation metrics, many are skewed or simply unavailable because Domo is not yet consistently profitable. For instance, the Price-to-Earnings (P/E) ratio is not applicable (N/A) because the company reported a trailing twelve-month (TTM) Earnings Per Share of about -$1.95. Also, the Price-to-Book (P/B) ratio is N/A because the company has a negative book value per share of -$4.64. This is common for high-growth Software as a Service (SaaS) companies, but it still means you can't use these basic screens.

Here's the quick math on the more relevant metrics for a company like this:

• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio compares the total value of the company, including debt (Enterprise Value), to its operating cash flow proxy (Earnings Before Interest, Taxes, Depreciation, and Amortization). Domo's TTM EBITDA is negative, resulting in an EV/EBITDA of approximately -13.93 as of November 2025, which tells you they are burning cash from operations.
• Price-to-Sales (P/S): This is a better metric for early-stage growth. Domo's P/S ratio is around 1.41. For context, many established software peers trade significantly higher, so this suggests a discounted valuation relative to revenue.

The stock has been a wild ride over the last 12 months. It has seen a massive swing, trading between a 52-week low of $6.01 and a high of $18.49, with a recent closing price of approximately $11.48 as of November 18, 2025. Despite the volatility, the stock has delivered a positive change of about 46.10% over the past year. The market is clearly weighing the company's growth potential against its lack of profitability and the risk of dilution. For more on the strategic direction driving this, you can review the Mission Statement, Vision, & Core Values of Domo, Inc. (DOMO).

As for income, Domo, Inc. does not pay a dividend, so both the dividend yield and payout ratio are 0.00%. This is standard for a company reinvesting all capital back into growth and operations.

Wall Street analysts lean toward a positive outlook, with a consensus rating of 'Moderate Buy' from ten firms covering the stock. The average 12-month price target is a robust $17.00, which suggests a significant upside from the current price. This target is based on a range that stretches from a low of $8.00 to a high of $21.00. The market is still figuring out if the company can execute its pivot to sustainable cash flow, which it emphasized in its fiscal 2025 strategy.

Here is a summary of the core valuation metrics for your file:

What this estimate hides is the execution risk inherent in any company with negative earnings. Your next step is to model the path to positive free cash flow (FCF) using Domo's stated guidance. Finance: Draft a sensitivity analysis on the FCF break-even point by end of week.

Risk Factors

You need to look past the impressive subscription Remaining Performance Obligations (RPO) growth and focus on the core financial risks. Domo, Inc. (DOMO) is defintely making strategic moves into AI and consumption-based models, but the near-term reality is a struggle for profitability and market share against giants. The biggest risks are external competition and the internal challenge of sustained negative cash flow.

Honestly, the market is unforgiving, and a company with a high-growth valuation needs to show a clear path to generating cash. Domo's management is executing a pivot, but we have to map the risks that could derail that turn.

External and Market Competition Risks

The primary external risk is the sheer scale of the competition. Domo operates in the business intelligence (BI) and data analytics space, a market increasingly dominated by massive players like Microsoft (Power BI) and Tableau (owned by Salesforce). These competitors can bundle their BI tools into broader, deeply integrated enterprise software suites, making it tough for a pure-play like Domo to compete on price or ecosystem depth. It's a classic David vs. Goliath scenario.

This competition translates directly into a growth problem. For Fiscal Year 2026, the company's guidance suggests revenue growth is expected to decline by 1% to 2% year-over-year, which is a clear sign of pressure on the top line. Plus, declining billings-a key indicator of future revenue-averaged 1.1% year-over-year declines over the last four quarters, signaling customer acquisition and retention challenges. The market is saturated, so they must differentiate with their AI platform. You can read more about their stated strategic direction here: Mission Statement, Vision, & Core Values of Domo, Inc. (DOMO).

Internal Financial and Operational Risks

The most immediate internal risk is the continued cash burn and unprofitability. For the full Fiscal Year 2025, Domo reported a GAAP net loss of $81.9 million. That's a significant number that highlights the ongoing cost of sales, marketing, and R&D needed to compete. Here's the quick math on the cash situation:

The negative adjusted free cash flow of $12.9 million for FY2025 means the company is still using cash to run its business, even after accounting for some non-GAAP adjustments. While the cash flow improved in the fourth quarter, a full-year negative figure still pressures the balance sheet, especially with net debt sitting around $75 million. What this estimate hides is the operational inefficiency, like the negative Customer Acquisition Cost (CAC) payback period in a recent quarter, which means the cost to win a new customer is temporarily outpacing the immediate returns.

Mitigation Strategies and Operational Bright Spots

Management is well aware of these risks and is actively pursuing a clear mitigation path. Their strategy hinges on three core pillars: ecosystem partnerships, a consumption-based model, and AI innovation. This is about shifting from a traditional subscription model to one where customers pay for what they use, which can increase stickiness and revenue over time.

The strategic focus is showing some positive operational results:

• Grow the long-term backlog, evidenced by the Subscription RPO of $403.6 million as of January 31, 2025, a 14% year-over-year increase.
• Improve customer retention, as the consumption customer cohort achieved a gross retention of 90%+ and a net retention of 100%+ in FY2025.
• Focus on high-value AI solutions, like Domo.AI, to create product differentiation against larger competitors.

The goal is to drive profitable, sustainable growth. The strategy is sound, but the execution needs to accelerate to overcome the financial drag of the net loss and the competitive headwinds.

Growth Opportunities

Domo, Inc. (DOMO) is in a critical transition, moving from a traditional licensing model to a consumption-based one, and this pivot is the single biggest driver of its near-term future. While the company reported total revenue of $317.0 million for the full fiscal year 2025, with a GAAP net loss of $81.9 million, the real story is the strategic shift. This move is designed to better align revenue with customer value, and it's already showing up in key metrics like Subscription Remaining Performance Obligations (RPO), which hit $403.6 million as of January 31, 2025, an increase of 14% year-over-year.

Here's the quick math: The consumption model has boosted sales productivity by over 60% in the past year, and management expects 85% to 90% of Annual Recurring Revenue (ARR) to come from this model by the end of fiscal year 2026. This model is the foundation for durable growth, even if the top-line revenue growth for FY2026 is projected to be modest, with company guidance in the range of $312.0 million to $320.0 million.

The market for business intelligence (BI) and data products is massive, and Domo is positioning itself in the most valuable segments.

• AI Innovation: The company's focus on its AI and Data Products platform is a clear growth driver, winning awards like the 2025 DEVIES Award in Data Analytics & Visualization.
• Ecosystem-Led Growth: Strategic partnerships with major cloud data warehouse providers like Snowflake and AWS are crucial. This allows Domo to act as the easy-to-use visualization layer on top of a customer's existing data infrastructure.
• International Penetration: The US accounted for 80% of its total FY2025 revenue, but the company is actively targeting expansion in markets like Japan and EMEA.

Domo's competitive advantage isn't just about features; it's about accessibility. The platform is cloud-native and designed to be intuitive, empowering non-technical users across an organization-from the CEO to the front-line employee-to make data-driven decisions. This focus is why the platform is often recognized as a 'Challenger' in the 2024 Gartner Magic Quadrant and a 'Strong Performer' in the Q2 2025 Forrester Wave™ for BI Platforms. Honestly, that ease-of-use is a huge advantage when competitors get too complex.

The analyst consensus for fiscal year 2026 revenue is slightly more optimistic than company guidance, sitting at approximately $324.39 million, with a forecast for non-GAAP earnings per share (EPS) to improve dramatically to a loss of -$0.15, compared to the 2025 full-year non-GAAP loss of -$0.52. This indicates that the street defintely believes the profitability picture is improving quickly, even if revenue growth is still stabilizing. You can dig deeper into who is betting on this turnaround by Exploring Domo, Inc. (DOMO) Investor Profile: Who's Buying and Why?

What this estimate hides is the potential for a quicker ramp in consumption-based revenue. If customers who have adopted the new model expand their usage faster than anticipated, Domo could see a significant upside surprise in revenue, as the model is structured for higher lifetime value per customer.