Executive Summary
Domo posted QQ1 2026 revenue of $80.1 million with a non-GAAP gross margin profile that supports a low‑to‑mid teens gross margin under GAAP and an 81.6% non-GAAP subscription gross margin. The company continues to execute its transition to a consumption‑based model anchored by a robust ecosystem and AI agent capabilities. Key profitability indicators improved meaningfully: non-GAAP operating margin reached 1.3% in the quarter and adjusted free cash flow was positive at $1.3 million, marking a notable step toward operating leverage after years of burn. Management framed these results as evidence that the multi‑year transition to a consumption and ecosystem-centric growth engine is delivering higher usage, stronger retention, and longer-duration contracts, setting the stage for sustainable growth and margin expansion in FY2026 and FY2027.
RPO growth accelerated meaningfully: current subscription RPO +5% YoY to $226 million and total subscription RPO +24% YoY to $408 million, with long‑term RPO up 61% YoY. Gross retention stabilized at 86% (up from 85%), while net retention rose to 94% (sequential improvement). Consumption now accounts for roughly 70% of ARR and is expected to approach 90% by year-end, implying a material shift in the revenue base toward higher‑velocity, value-based consumption.
Management provided explicit FY2026–FY2027 guidance, underscoring a gradual path to profitable growth: exit FY2026 with 5% billings growth and 5% operating margin, and exit FY2027 with 10% billings growth and 10% operating margin. The company continues to emphasize AI-driven adoption, expanded partner ecosystem work with CDWs (e.g., Snowflake, Databricks, Oracle, Google), and multiyear contracts as core levers for margin expansion and durable growth.
Key Performance Indicators
QoQ: -17.01% | YoY:33.12%
Key Insights
Revenue: $80.111 million in Q1 FY2026; YoY growth ~0.01%, QoQ growth ~1.70%.
Gross profit: $59.443 million; gross margin 74.20% GAAP. On a non-GAAP subscription basis, gross margin was 81.6%.
Operating performance: GAAP operating loss of $14.346 million; operating margin −17.90% of revenue. Non-GAAP operating margin was 1.3% with non-GAAP net loss of $3.6 million, or per-share basis of −$0.09 using 39.7 million weighted shares.
Cash flow and liquidity: Net cash provided by operating activ...
Financial Highlights
Revenue: $80.111 million in Q1 FY2026; YoY growth ~0.01%, QoQ growth ~1.70%.
Gross profit: $59.443 million; gross margin 74.20% GAAP. On a non-GAAP subscription basis, gross margin was 81.6%.
Operating performance: GAAP operating loss of $14.346 million; operating margin −17.90% of revenue. Non-GAAP operating margin was 1.3% with non-GAAP net loss of $3.6 million, or per-share basis of −$0.09 using 39.7 million weighted shares.
Cash flow and liquidity: Net cash provided by operating activities $3.951 million; capital expenditures $2.927 million; free cash flow $1.024 million; adjusted free cash flow positive at $1.3 million. Cash at end of period $47.18 million; cash balance up from $45.3 million in the prior quarter.
Cash flow and working capital: DSO/working capital nuances are impacted by elevated deferred revenue; total current liabilities $231.372 million; total liabilities $368.382 million; stockholders’ equity is negative at $(178.702) million due to accumulated deficits, with debt noted as total debt $131.944 million and net debt $84.764 million.
RPO and ARR dynamics: Current subscription RPO $226 million; total subscription RPO $408 million; YoY changes +5% and +24% respectively; long-term RPO up 61% YoY. ARR consumption mix now >70%, targeting ~90% by year-end.
Guidance: Q2 billings guidance of $69–$70 million; GAAP revenue guidance of $77.5–$78.5 million; non-GAAP net loss per share guidance of $(0.03) to $(0.07) based on 40.5 million shares. Full-year guidance raised: billings $312–$322 million; GAAP revenue $312–$320 million; non-GAAP net loss per share $(0.18) to $(0.26) based on ~41 million shares.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
80.11M |
0.01% |
1.70% |
| Gross Profit |
59.44M |
7.91% |
1.48% |
| Operating Income |
-14.35M |
33.12% |
-17.01% |
| Net Income |
-18.05M |
30.59% |
-2.12% |
| EPS |
-0.45 |
34.78% |
0.00% |
Management Commentary
Themes from management commentary and investor Q&A:
- AI and agent-centric adoption: Josh James highlighted Agent Catalyst adoption, with customers rapidly building AI agents (texts of examples including automatic invoice processing, notifications, and workflow automation). He noted customers created agents in under 37 minutes and that Agent Catalyst is rapidly shaping consumption growth and stickiness.
- Ecosystem and CDW partnerships: James emphasized the importance of cloud data warehouses (Snowflake, Databricks, Oracle, Google) and the acceleration in partner-sourced deals, with early-stage partner pipeline growing >200% QoQ from a CDW partner. This supports a longer‑term renewal base and larger deal sizes.
- Customer engagement and multiyear commitments: Tod Crane cited stronger retention metrics (gross 86%, net 94%), rising RPO (current +5% YoY; total +24%), and a shift toward consumption-based contracts, reinforcing a durable revenue base.
- Operational leverage and profitability trajectory: The executives stressed that the model is delivering operating leverage, with Q1 marking the first time positive Q1 operating margin was achieved and free cash flow turning positive. They reaffirmed guidance to exit FY2026 with 5% billings growth and 5% operating margin, accelerating to 10%/10% exit in FY2027.
- Customer outcomes and real-world AI value: Quotes from customers and references to Filevine and other adopters illustrate AI-driven decision support and data sharing via Domo Everywhere, strengthening retention and expanding addressable use cases across the enterprise.
We exceeded our Q1 guidance for billings, revenue, and non-GAAP EPS and we're adjusted free cash flow positive. Notably, this marks the first time we've achieved a positive operating margin in a Q1.
— Josh James
Consumption customers now represent over 70% of our ARR, heading toward 90% by the end of the year. The renewal base increasingly shifts toward consumption, and we expect it to be a tailwind to positive retention results.
— Josh James
Forward Guidance
Domo’s forward guidance centers on a measured, profitability-focused growth pivot driven by consumption-based pricing, AI-enabled workflows, and a broad partner ecosystem. Key assumptions include:
- Near-term growth improvement through billings expansion and a return to operating margin expansion as the mix shifts toward consumption and multiyear deals.
- Exit FY2026: 5% billings growth, 5% operating margin; Exit FY2027: 10% billings growth, 10% operating margin. This implies a stepped-up path to profitability aligned with higher ARR exposure from consumption and partner-led deals.
- RPO and retention as reliability anchors: Substantial RPO growth (current +5% YoY; total +24% YoY) supports revenue visibility and, together with gross and net retention improvements (86% and 94%), provides a cushion for margin expansion.
- Risks to monitor: macroeconomic headwinds, ongoing competition in the cloud analytics space, execution risk in scaling partner-led pipelines, and potential pressure on pricing or discounting in some segments.
- Investment thesis: The AI agent capability, ecosystem partnerships, and ability to convert pipeline into billings are pivotal catalysts. If the cadence of partner-sourced deals accelerates as expected and consumption mix remains elevated, the company may outperform the stated exit-2026/2027 targets. Investors should monitor Q2 billings trajectory, RPO progression, and the rate of margin expansion as signals of progress toward the Rule of 40 objectives.