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DOMO Gears Up to Report Q1 Earnings: What's in the Cards?

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Domo (DOMO - Free Report) is set to report first-quarter fiscal 2022 results on May 27.

For the quarter, Domo expects revenues between $56.5 million and $57.5 million. Non-GAAP net loss is expected between 43 cents and 47 cents per share.

The Zacks Consensus Estimate for first-quarter loss has been steady at 44 cents per share over the past 30 days. The company had reported a loss of 65 cents in the year-ago quarter.

The consensus mark for revenues stands at $57 million, indicating an increase of 17.4% from the year-ago reported figure.
 

Domo, Inc. Price and EPS Surprise

Domo, Inc. Price and EPS Surprise

Domo, Inc. price-eps-surprise | Domo, Inc. Quote

 

Notably, Domo beat the Zacks Consensus Estimate in the past four quarters, delivering an earnings surprise of 25.4%, on average.

Let’s see how things have shaped up for this announcement.

Factors to Watch

Domo’s first-quarter top-line growth is expected to reflect resiliency of its subscription-based business model. Markedly, subscriptions increased 25.7% year over year and accounted for 87.9% of the company’s fourth-quarter revenues. The momentum is expected to have continued in the to-be-reported quarter.

Domo has also benefited from the ongoing digital transformation of businesses and work-from-home wave. Additionally, the company’s expanding service offerings, based on a solid partner base, is a key catalyst. Expanded partnerships with the likes of Snowflake (SNOW - Free Report) and Amazon Web Services (AWS) are noteworthy in this regard.

Markedly, during Domopalooza, Domo announced extensive support for AWS, including Domo for Amazon Redshift. The company also announced fully integrated product listings for more than 3,000 data products from AWS Data Exchange in the Domo Appstore.

Additionally, Domo announced the availability of Domo for Snowflake during the to-be-reported quarter.

Further, Domo’s expanding clientele, particularly enterprise customers, are expected to have driven the top line. Notably, at the end of the fourth quarter, 62% of customers were on multi-year contracts.

However, the bottom line is expected to have been hurt by modest sequential increase in operating expenses, particularly due to the addition in sales headcount and annual conference Domopalooza, in the to-be-reported quarter.

What Our Model Indicates

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Domo has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a couple of companies worth considering as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:

Digital Turbine (APPS - Free Report) has an Earnings ESP of +6.98% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

VMware has an Earnings ESP of +6.88% and is #3 Ranked.

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