Brief Summary
After a quarter of lower-than-expected sales, management reduced its forecast for the entire year.
On the other hand, Domo’s bottom line performance is outpacing projections.
The IT expert’s revenue growth has fallen short of projections.
Domo (NASDAQ:DOMO)
On Friday, shares of low-code data app platform company Domo (NASDAQ:DOMO) dropped significantly. There has been a drop of more than 29% in the stock price as of 11:05 AM ET.
The earnings report for the company’s fiscal second quarter was released after the market closed on Thursday, possibly explaining the drop in the tech stock. The end result was not as good as hoped. In addition, leadership offered weaker-than-anticipated guidance for fiscal Q3 sales and cut its full-year sales expectations.
Reason for the Stock Gain
A 20% year-over-year increase in sales for Domo (NASDAQ:DOMO) brought in $75.5 million during their fiscal second quarter. This expansion was primarily due to a rise in subscription revenue, which accounted for $67.4 million of the company’s total revenue and grew by 23% year over year. Sales for fiscal Q2 were $76.4 million; however, this was below analyst expectations. When accounting for adjustments, the company’s loss per share of $0.26 was less than the average loss per share prediction of $0.33.
CEO John Mellor remarked in the company’s fiscal second-quarter earnings release, “We continue to optimize for long-term, sustainable development, as we bring speed-to-value to line-of-business decision makers and support our clients’ success.”
What’s Next?
Domo has significantly lowered its expectation for full-year sales despite management’s optimism about the company. Revenue for the fiscal year 2023 has been revised upward by management to the range of $305 million and $310 million. This is lower than the anticipated range of $315m-$319m in revenue. Furthermore, the revenue forecast falls short of the consensus projection of $316 million among industry experts. However, the company has revised its loss per share projections downward, saying it now anticipates a smaller loss.
Similarly, Domo’s fiscal third-quarter revenue guidance was off the mark, with the middle of the range coming in at around $2.6 million below analysts’ average expectation. The business forecast an adjusted loss per share of $0.27-$0.23, while actual results came in $0.23 higher. Investors should expect an average loss of $0.34 per share; thus, this is a positive figure.
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Author Shariq Khan 
