Domo's Excitement and Innovation in the AI Market
2023-09-08
Domo, a technology company, held its second quarter fiscal year 2024 earnings call, featuring remarks from Founder and CEO Josh James and Chief Financial Officer David Jolley. The meeting focused on the company's financial performance, strategies for AI offerings, and sales force retention.
During the call, one of the most important topics discussed was Domo's excitement about the future and the opportunities in the marketplace, particularly in relation to artificial intelligence (AI). CEO Josh James expressed enthusiasm for ChatGPT, an AI model that allows for data analysis through prompts rather than traditional methods like SQL. This highlights the company's commitment to innovation and staying ahead of the curve in the AI space. Domo's ability to automate the entire AI process within their platform, as well as integrate any AI model from Hugging Face into their business data sets, sets them apart from competitors. This end-to-end AI solution capability positions the company for success in the rapidly evolving AI market.
The company sees AI as a significant opportunity for growth and believes it will play a crucial role in their future success. They plan to leverage AI technology and automation within their product/service offerings, specifically mentioning ChatGPT. By applying AI models to their platform and automating the process of integrating AI models into data sets, Domo aims to distribute the benefits of AI within organizations. They also emphasized their commitment to building great products and maintaining a positive operating margin while adapting to changing market consumption patterns.
In terms of the market outlook, Domo remains positive and focused on competing effectively while implementing cost-saving measures. They expressed confidence in achieving their margin targets and have not received indications from most of their large renewals about not renewing. However, the company is aware of a few renewals with low renewal rates due to vendor consolidation. They are being conservative in their forecast and hedging the right amount to account for these situations. The impact of these renewals is believed to be limited and does not pose a systemic problem. Domo is also facing challenges related to IT consolidation in some big enterprises.
Although specific Key Performance Indicators (KPIs) were not explicitly mentioned, it can be inferred that the capacity and ramping percentage of the sales force, as well as productivity levels, are likely important metrics for the company. CEO Josh James mentioned the loss of 30% of overall capacity, indicating the significance of sales force capacity as a metric. He also highlighted the need to rebuild the headcount and get them ramped, suggesting that the ramping percentage of the sales force is another important KPI. Additionally, the CEO mentioned that productivity levels have not been as high as they historically were, indicating that productivity is likely a key metric for the company.
Looking ahead, Domo provided an outlook for the third quarter of fiscal year 2024. They expect GAAP revenue to be in the range of $78.5 million to $79.5 million, with a non-GAAP net loss per share of $0.10 to $0.14. For the full year of fiscal year 2024, the company anticipates GAAP revenue in the range of $316 million to $320 million, representing year-over-year growth of 2% to 4%. They also expect a non-GAAP net loss per share of $0.39 to $0.47. Domo aims to maintain a positive operating margin for the year and near cash flow breakeven.
Overall, Domo's second quarter fiscal year 2024 earnings call highlighted their excitement about the future and the opportunities in the AI market. Their focus on innovation, automation, and leveraging AI technology within their platform positions them for success. Despite challenges in the market, the company remains positive and confident in achieving their financial targets. With a strong commitment to building great products and maintaining a positive operating margin, Domo is poised to navigate the evolving market landscape and capitalize on the potential of AI.