Domo's third quarter results were met with a negative market reaction, as the company reported flat year-over-year sales alongside revenue that aligned with Wall Street expectations. Management pointed to the increased length and complexity of partner-driven sales cycles as a primary factor affecting billings, emphasizing that larger, multi-stakeholder deals now require more time to close. CEO Josh James highlighted that these ecosystem-focused transactions involve higher-level decision makers, leading to longer but ultimately more durable customer relationships. The transition to a consumption-based pricing model was also a key theme, with management noting accelerating adoption and its impact on user engagement.

Is now the time to buy DOMO? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Domo’s Q3 Earnings Call

• Derrick Wood (TD Cowen) asked about the drivers behind the negative billings surprise and how management plans to regain momentum. CEO Josh James pointed to longer sales cycles in partner-led deals, but emphasized confidence in achieving Q4 billings growth targets, stating, “We didn’t lose any deals, just timing shifted.”
• Brett Huff (Stephens) questioned whether the company’s focus on composability and profitability limited its ability to accelerate growth. James explained that while cost discipline remains a priority, the team is identifying opportunities where additional investment could drive faster expansion, but is committed to maintaining financial guardrails.
• Brett Huff (Stephens) also inquired about Domo’s AI strategy and customer conversations around AI integration. CTO Daren Thayne responded that customers prioritize data governance when adopting AI, and Domo’s platform offers the necessary controls to enable secure, scalable AI adoption.
• Kincaid LaCorte (Citizens) sought clarification on the leverage gained from new partner relationships, referencing learnings from the Snowflake partnership. James responded that experience with one partner accelerates onboarding with others, particularly in go-to-market strategies, but each requires tailored integration.
• Eric Martinuzzi (Lake Street Capital Markets) asked if the billings shortfall was due to a few large deals or several mid-sized ones. CFO Tod Crane clarified it was multiple medium-sized deals delayed by more complex, stakeholder-rich sales cycles.

Catalysts in Upcoming Quarters

In the quarters ahead, our analysts will closely monitor (1) the pace and consistency of billings growth as delayed partner-led deals are recognized, (2) improvements in gross and net retention driven by the ongoing shift to consumption pricing and multiyear contracts, and (3) further progress in customer adoption of AI-driven features. Execution in these areas will be key to validating Domo’s strategic priorities and operational discipline.

Domo currently trades at $8.67, down from $11.57 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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