Domo stock plunges 36% after revenue miss, going concern warning

Domo's struggles reflect a broader pattern among smaller cloud software firms. Many have seen growth slow as enterprises tighten IT spending and prioritize vendors with proven profitability. Domo has never posted a full-year profit. Its net loss for the first quarter widened to $28.6 million from $25.1 million a year earlier.

The company's customer count stood at 1,250 at the end of the quarter, up just 5% from a year ago. Average revenue per customer was flat. Domo's subscription revenue, which makes up roughly 90% of total revenue, grew 4% year over year, the slowest pace since its IPO.

Domo's board has formed a special committee to evaluate the strategic options. The company did not provide a timeline for a decision. The forbearance agreement with lenders requires Domo to maintain minimum cash levels and restricts new borrowing.

The stock's decline erased roughly $150 million in market value. Domo now trades at about 0.6 times trailing revenue, a steep discount to the median multiple of 3.5 times for publicly traded cloud software companies. The broader stock market analysis has shown a rotation away from unprofitable growth names over the past year, a trend that has weighed on Domo and its peers.

Domo's next earnings report is scheduled for late August. The company said it will provide an update on the strategic review process at that time.