Domo (NASDAQ:DOMO) said it is in advanced negotiations regarding a potential strategic transaction after a board-led review of alternatives, as executives highlighted improving retention metrics, near break-even adjusted free cash flow and continued customer adoption of AI-powered data applications during the company’s first-quarter fiscal 2027 earnings call.
Founder and CEO Josh James said the company’s board concluded that pursuing a strategic transaction “represents the best path forward” after engaging with multiple parties and considering a range of possible outcomes with outside financial and legal advisers.
Because of the status of those discussions, Domo did not provide financial guidance and did not hold a question-and-answer session on the call.
Debt Classified as Current After Covenant Miss
Chief Financial Officer Tod Crane addressed Domo’s balance sheet directly, noting that the company’s Form 10-Q disclosed that its existing debt facility is classified as current as of the first quarter. Crane said the classification reflects that Domo did not meet the minimum ARR covenant under the facility for the quarter, requiring the debt to be classified as current under GAAP.
Crane said Domo has entered into a signed forbearance agreement with its existing lender. Under that agreement, the lender has agreed to refrain from exercising rights to accelerate repayment or pursue other remedies under the facility while Domo works toward completing the potential strategic transaction.
“We are in a cooperative and constructive relationship with our lender and appreciate their partnership through this process,” Crane said.
Revenue Declines Slightly as Retention Improves
Domo reported total revenue of $79.4 million for the first quarter. Subscription revenue was $69.8 million, down 2% from the prior year, which Crane attributed primarily to variability in overage-related revenue recognition. Professional services revenue rose to $9.6 million from $8.7 million a year earlier, reflecting increased deployment activity and sponsorship revenue tied to Domo’s annual user conference.
Billings were $60.4 million, compared with $63.9 million in the prior-year quarter. Crane said the decline was mainly a timing issue, as the fourth quarter of fiscal 2026 included renewals that historically would have closed in the first quarter.
“We generated a similar amount of new ACV as Q1 last year, and the underlying renewal activity is healthy,” Crane said.
Domo reported gross retention of 86.7%, up 240 basis points year-over-year, and net revenue retention of 95.5%, up 150 basis points. Crane said the improvement reflected progress tied to consumption-based pricing, multi-year contracts and the company’s forward-deployed engineering model.
Customers that began on Domo’s consumption model continued to outperform the broader base, with gross retention of 92% and net retention of 108% for the quarter, Crane said.
Current subscription remaining performance obligations were $222.2 million, while total subscription RPO was $412.9 million. Crane said the RPO base reflects committed future revenue supported by multi-year contracts and consumption agreements.
Adjusted free cash flow was close to break even, and cash flow from operations was positive $5.2 million. Domo ended the quarter with $39.1 million in cash.
Subscription gross margin was 81.5%, while total gross margin was 75.3%, reflecting a higher mix of services revenue. Non-GAAP operating income was approximately $4.4 million, representing a 5.6% operating margin. Non-GAAP net loss per share was $0.02 on about 43.4 million weighted average diluted shares.
CEO Says AI Is Increasing the Importance of Data Infrastructure
James framed Domo’s strategic value around what he described as a major shift in how companies use data and artificial intelligence. He said enterprise customers have moved beyond experimentation and are now asking how to deploy AI reliably, securely and at scale.
“AI is only as effective as the data environment beneath it,” James said. “You can’t successfully deploy AI-powered apps, agents, and workflows against fragmented or ungoverned data.”
James said that reality is making governed data infrastructure more important as organizations seek to connect data, activate intelligence through applications and agents, and distribute those tools into workflows. He said Domo has expanded its forward-deployed engineering team to work directly with customers to build applications, agents and workflows on top of governed data, sometimes creating and deploying solutions in 24 to 48 hours.
The company cited several customer use cases, including a major media and entertainment company using Domo AI agents to monitor live-streaming performance, network health and fan support data in 15-minute intervals during live events. James also discussed a global commodities trading organization using a Domo-powered conversational AI assistant to analyze exposures, contracts, shipments, financing and cash flow.
Other examples included a sports and media organization using AI applications for live-event customer support, a healthcare marketing agency deploying an AI-powered compliance review assistant for pharmaceutical marketing materials, and a transportation and logistics company using Domo to identify disruptions across an intermodal network. James said one logistics deployment reduced investigation times from 30 to 60 minutes to near real-time.
Partner Ecosystem Remains a Focus
James said Domo continues to see momentum through partnerships with companies such as Snowflake, Google Cloud and Databricks. He said customers are increasingly selecting Domo alongside those platforms as part of broader efforts to connect data, operationalize AI and deliver business value more quickly.
Domo highlighted multiple joint wins with Snowflake, including a payments provider replacing a legacy analytics environment, a nonprofit workforce development organization modernizing its enterprise data environment and a loyalty and engagement solutions provider supporting an AI-driven data strategy.
James also pointed to recent industry recognition, saying Nucleus Research named Domo a leader in its 2026 BI and analytics technology value matrix. He said Dresner Advisory Services recognized Domo in several BI market studies, including naming it the top self-service BI vendor for the seventh consecutive year and the top cloud BI vendor for the 10th consecutive year.
In closing, James said the quarter reflected improving underlying metrics, including better gross retention and net retention, improved operating margin and earnings per share, and growth in RPO. He said Domo remains positioned around what he described as a shift from dashboards and analytics to applications, automation and AI agents.
About Domo (NASDAQ:DOMO)
Domo, Inc (NASDAQ: DOMO) is a cloud-based software company that specializes in business intelligence and data analytics. The company’s flagship product, the Domo Business Cloud, provides organizations with an end-to-end platform to integrate, visualize and analyze data from a wide array of sources. By unifying disparate data feeds into interactive dashboards and custom applications, Domo enables real-time insights that inform decision-making across all levels of an enterprise.
Founded in 2010 by Josh James, Domo is headquartered in American Fork, Utah, and operates offices across North America, Europe and Asia Pacific.
