Ladies and gentlemen, thank you for standing by, and welcome to the Domo Q1 Fiscal Year 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers presentation there will be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Peter Lowry, Vice President of Investor Relations. Please go ahead.

Good afternoon, and welcome. On the call today, we have Josh James, our Founder and CEO; Bruce Felt, our CFO; and Julie Kehoe, our Chief Communications Officer. Julie will lead off with our safe harbor statement and then onto the call. Julie?

Thanks, Pete. Our press release was issued after the market close and is posted on the Investor Relations section of our website, where this call is also being webcast. Statements made on this call include forward-looking statements related to our business under federal securities laws, including statements about financial projections, the plans and expectations for our go-to-market strategy, our expectations for our sales and new business initiatives, the impact of COVID-19 on our business and our financial condition. These statements are subject to a variety of risks, uncertainties and assumptions. For a discussion of these risks and uncertainties, please refer to the documents we file with the SEC, in particular, today's press release, our most recently filed annual report on Form 10-K and our most recently filed quarterly report on Form 10-Q. These documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements. In addition, during today's call, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of Domo's performance. Other than revenue, unless otherwise stated, we will be discussing our results of operations on a non-GAAP basis. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. Please refer to the tables in our earnings press release for a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measure. With that, let me hand it over to Josh. Josh?

Thank you, Julie. Hello, everyone. Thanks for joining us on the call. I hope everyone is certainly in good health. And what I've done today, it's going to be extremely difficult for the Bruce to not if use bullishness. You'll see us raise guidance today, and we see potential upside in our future. In Q1, we got off to a great start to our fiscal year 2022. We had a record Q1 across many important metrics, including new business and retention. We posted 25% billings growth, 23% subscription revenue growth, and 24% total revenue growth, with a 90% plus retention rate across both the enterprise and corporate segments of our business and in every geography. Now with a full recognition, it has been a humbling process and a ton of hard work from our people to create this great company and even get to this spot. I read all the reports, and despite the performance that we've been putting up, see how some people have characterized our growth profile. Now for those of you who know me, you know that I'm not generally known as an infinitely patient, unendingly understanding, not-demanding kind of guy. So, you appreciate that it's very hard to be patient long enough to wait for all the characterizations to catch up with the reality. And obviously, I'm saying that a bit in just, but with what we have consistently been producing, I think it's important to do some math that calls out how strong and consistent our performance has actually been. Over the last four quarters, we've seen 23%, 25%, 28% and now 25% growth in billings. I know everyone on the phone call is exceptionally good at math, and that sounds to me like billings have consistently grown each quarter by an average of 25%.…

Thank you, Josh. And yes, you could make it a little difficult for Bruce be, Bruce. But I think that I'll be a little Bruce anyway. We had another strong Q1, driven by a number of record key metrics, as Josh has highlighted. I'll review the details behind our performance, provide an update on some of our recent financial analyst session commentary, and then discuss second quarter and fiscal 2022 full year guidance. We delivered Q1 billings to $58.2 million, a strong year-over-year increase of 25%, driven once again by new customer count growth, upsells and expansions, record Q1 retention rates, strength across all geographies and improving sales force productivity. I am particularly pleased with our billings growth against a tough compare due to the $6 million of total billings reported for state deals in Q1 of last year. Net retention remained above 100% and ticked up a bit from Q4. What is promising on net retention is the amount of growth we just experienced in new ACV from existing customers, providing the visibility to expect higher net retention rates as the revenue is recognized. We now have 61% of our customers on a dollar-weighted basis under multiyear contracts at the end of Q1, up from 54% a year ago. Our remaining performance obligations, or RPO, grew 24% compared to the same quarter last year. Current RPO or RPO expected to be recognized as revenue over the next 12 months grew 22% year-over-year. Q1 total revenue was $60.1 million, a year-over-year increase of 24%. Subscription revenue grew 23% year-over-year and represented 87% of total revenue. International revenue in the quarter represented 23% of total revenue. Our subscription gross margin was a record 83%, up more than 4 percentage points from 79% in Q1 of last year and up over 1…

[Operator Instructions] Your first question will come from Sanjit Singh of Morgan Stanley. Please go ahead.

Congrats to a really strong start to the year. Josh, just to start with you. Let's talk about this expansion deal, which hopefully is a harbinger of things to come. Could you talk to us a little bit about, one, the potential size of this deal, either from a dollar basis? Or if you can't talk about dollars, users would be great. But then more importantly, how long did it take to win this deal? What were the sort of the key factors to get this deal over the line? And was it competitive in terms of this upsell? Because I know it was an existing customer, maybe, strike that.

Yes, you bet. And thank you for calling us out in your in your reports as your number one choice for software in mid-market, we certainly appreciate that. And on this deal, it's a really exciting deal. It is the biggest upsell. It's almost the biggest deal that we've ever done. It's one of our -- certainly, one of our 5 largest customers now. It's a transformational deal because of how it's happening, too. It's not little bite-sized pieces. It was several POCs across the org and proving what we could do and how quickly and rapidly we can do it and what scale we can do it at. It's that -- really, it's that whole stack that we built, being able to provide all that BI leverage in the record time that we did, is really what gave them the confidence. And so there was a bunch of business leaders that were able to validate what the CIO wanted to do and gave the CIO the confidence to say this is the global standard. And we think there's a -- even though this contract is a good contract as it is, there's a ton of upside for us with this customer. And we think that this is where a lot of our customers are going to head. We don't have very many large-scale enterprise customers where we have complete site-wide distribution. In fact, we only have just a couple. And so to know that the vast majority of all of our enterprise customers have this kind of potential, and then finally seeing that potential come through is really exciting. And so the deal is already done. We're already working on the installations in multiple places. They're going really well and there's a ton upside here for a lot of reasons. But the thing that I'm the most excited about is now even though we can't talk about, who they are yet, over time, I suspect that we will. And we'll certainly talk about them with our potential customers and other current customers. And that's just going to give a lot of people confidence to move all their chips in on Domo, because they can see what we can do for them. And that's the tipping point that I was talking about. Because it did happen in my last company. You get to a point, and everybody asked about, look, here's my list of 12 concerns, and you just keep repeating blue-chip customers that are willing to talk to get rid of each one of those concerns that they have, and it gives them that confidence. And that's I think what just happened here.

Well, congrats on that and looking forward to see how that evolves for the broader opportunity at Domo, I guess my next question to -- and this is probably for Bruce, but Josh, feel free to chime in as well, which is really around the question around growth rates. So three numbers. We have billings growth of 25%, RPO growth of 21%, current RPO growth of 22%. And then if you look at your bookings growth, sort of revenue plus change in RPO, that was like, I think, by my calculations, a big, big number at 38%. So Bruce, when I put the 18% billings growth in terms of the full year guide, which of those numbers that I just laid out, do you think that represents the trajectory of the business as you see it?

Yes. Well, first, thanks for the question. I don't quite get your last number, but we can just talk about that separately. Maybe I just don't understand that size of a number. But yes, I mean, as Josh pointed out, you see directionally where we're headed. We posted, on average, 25% growth. We really do like the play for that. We've had things come together during the quarter that have allowed us to achieve that, even if we didn't see all of that at the beginning of the quarter. I'll say the same thing is true now. We have visibility that allows us to give 20% guidance, but as I mentioned, we have a lot in the hopper that makes us feel very good about the 20%. And as things bounce the way we hope they do, we'll do better than that. So -- and we also think of this as a long game. I mean, we're trying to set up just strings of these in not just any one quarter. So they're all representative of what's possible, and I think we've been able to like move the numbers up into a much better Zip code than we ever had before. And as you can tell by our posture here, we still think that we have more room to bring these numbers up, as our execution -- as the machine kind of really gets cranked up here. So I think that gives you a good idea of our thinking. So I'll just stop there.

Our next question will come from Derek Wood of Cowen. Please go ahead.

My congratulations, great start to the year. I'll start with you, Josh. One of the things we keep hearing about is how differentiated your low-code, no-code capabilities are around building analytic apps and doing it quickly. Are you kind of seeing more of these platform use cases? And just kind of how does that platform approach get you into new budgets and new users? And how is that creating market differentiation against other BI vendors?

I think it really demonstrates how we can evolve with our customers. Most of our customers, including the one we talked about today, the big deal that we -- the big upsell that we had, most of them have everything under the sun already installed somewhere in the organization. When we have this low-code no-code ability to create applications that are very specific business intelligence applications or applications that no one would consider to be business intelligence, but really, there's a function inside the organization, they're trying to do in a very specific way that they would have to go out to an outside vendor at great expense and impossibility to be able to continue to manage. Instead, they come to us. We have all of the data, all the connectors. We have the ability to create this great BI leverage, and that includes building these low-code no-code apps. And so they see us relative to the other technologies they're using, and they see how much more effectively we can evolve with them by building these low-code no-code apps. And that's exactly what happened with this upsell as well. We put together a couple of apps as part of the POC, and there's nothing else like it in the marketplace, period. So I think that is something that is -- we're going to talk a lot more about over the coming years because we're certainly seeing it in hundreds of our customers.

That's great to hear. And maybe for Bruce or maybe Josh as well. But so nice marquee win, large sounds like multimillion-dollar deal. As you look forward and you look at your pipelines and you think about transactional deal flow and large deal flow. And we -- it sounds like you've been working on this for a while. Are there other large deals that you've been working on and are maturing? And how do you think about the growth motion between the transactional deals and the large deals as you look over the rest of the year?

Yes. Actually, I'm going to have Ian Tickle, our Chief Revenue Officer, he's here with us. So, I'll have him answer that question, great question.

Derek, thanks for the question. We've seen really good progress in making sure we have a nice blend of the opportunities that we're working towards in the pipeline. So doing a lot of great work with John Meller in marketing to make sure that we have a good mix of new logo across multiple revenue bands, also building out our upsell engine as well, which is going very well for us. And likewise, continuing from last quarter and Josh's comments with regards to strong partner network and contribution as well. So overall, we've got a very nice mix across recurring and nonrecurring as well. So good traction across all sectors at this moment.

You next question will come from Bhavan Suri of William Blair. Please go ahead.

Great, and a really solid job there across the board. I guess I want to touch on 2 slides. So let's touch on partnerships first. And we've discussed this a lot. You sort of said you know maybe by fiscal '25, partnerships contributing 50%, but as you see these platform deals as expansions, partners provide a huge flywheel, right? Because they've got to put consultants to work, strategy to work. How are you seeing traction with partners? I ask this question, I think, almost every quarter, but I'd love to get an update on how that's playing out. And is that side will start to play out? I think it’s really interested to say, hey, this Domo thing, I know we have a bunch of people extension doing this, but maybe we should be focusing on this domain because this is driving growth and will drive more growth for us. How do you see that playing out now? And how are we towards on that 15%?

Yes. I think the work that we're doing together with John and marketing is creating really nice traction for us. I'm very excited about the way we're positioning the offerings that we have. I think Domopalooza was a great showcase of how we're starting to resonate the message with the market space and moving forward with the opportunities that we have as well as creating market momentum.

Yes, Ian. This is John Mellor. I think there's also this virtuous cycle when you get these big customers, that the big customers that creates the priority with the large ecosystem partners, whether those are tech or whether those are systems integrators and whether conversations go pretty smooth at that point. So I think we're excited to continue to open doors there and push those were there’s big opportunity.

I think, Ian, it's probably worth sharing without any names, but worth sharing the conversation. We just have the installation of the big customer that we assigned.

Yes. With regard to the -- so I mean, the SI side to it is really moving in a nice direction. So we've had, as I mentioned, partner ecosystems building out as we look at the new logos and the cross-sell logos, we deal with these organizations who have preferred partners and with the preferred partners sometimes the rules move together where we've got great traction. You have a great new opportunity that comes in as well. And the 2 come together and we really start to expand. And one of the exciting things about the go-to-market from system integrators and partners and just the entire ecosystem there is that as we build out the messaging and the value proposition to the users, people recognize that this isn't just about technical capability. This is about business adoption and business adoption helps drive and enable digital transformation. And that's something that we're super excited about. And as you can imagine, SIs are also excited. And we're getting lots of introductions into lots of new places, which also is very, very interesting for us as well.

And I guess one other one for me. It's probably a little technical, but I'd love to walk through it. So one of the value adds of Domo was, if you think about it as a platform, I can bring data in, spend a lot of time building ingestion, connectors, ETL, whatever. I've got the data stores. I've got all sorts of AI embedded in there. I've got all kind of Mr. Robot, et cetera, and then I've got kind of the storyboard, the ability to build these applications until a story. As technologies evolve, you couldn't do that with the old BI guys, and you can't do with just visualization. But as APIs become more streamlined as things -- the rest APIs become more standardized, is there a risk that people start putting this together themselves, because the data movement, the data flow is more normalized? Or is the complexity still so high in that we've got long ways to go before you get a full integrated environment, hence the value of something like Domo? Just help me think through some of the improvements in sort of data movement, data management, et cetera, that are happening as standardization the industry? And sort of is that really a risk?

Yes. I don't think there's going to be any standardization for decades. I mean, these customers are all so complex. That's why we use the word BI leverage. They have everything under the sun, and sure they're trying to take components of data stores that they have and trying to allow other people they work with, do not have to move the data every single time they want to do something or every single time they want to interact with the new application to accomplish something. And so there'll certainly be more connectors, more APIS, more standard frameworks. And the nice thing is we sit on top of all of that. We facilitate that. We provide that BI leverage whatever it is the customer wants to do. And if someone like Snowflake plate comes along, it starts getting a lot of traction, great, we work with Snowflake. If they're doing something more with AWS, great, we have a great partnership with them as well. And I think we've been evolving spaces before, this space is going to continue to evolve, but the ability to create things like those low-code, no-code apps to take the data, put it into the fingertips of thousands of people across an organization, we are unparalleled and unmatched in the way that we do those things. And so I think that's still, at the end of the day, the value comes when there's something that's in the fingertips of the managers and the people that are making decisions and running the businesses. And that is truly where we sit. Everything else is just facilitating that experience. And we do that ourselves, and we do it with partners.

[Operator Instructions] Your next question will come from Jack Andrews of Needham. Please go ahead.

I'll echo my congratulations on the results. I wanted to ask about your -- the nice uptick in retention. Could you just provide some more detail in terms of -- is this uptick in retention just happening organically among customers that are driving more value from Domo? Or are there specific tactics that you're using to drive that higher?

Yes. It's -- I mean it's a lot of things. It's been a multiyear effort and most importantly, it's been the responsibility of the -- a big chunk of the folks at our company that are responsible for our customers and their happiness. And their efforts have really led to the increases that we've seen over the last few years. So first and foremost, it's been them. And I sent an e-mail out today to all actually. They just said the client services, hey, there's a specific acknowledgment we all need to provide here that you guys are kicking ass, end of message. And that's really truly what's been taking place. Just great people at our company, great people in Utah. They love making their customers happy. They love getting upsells, and it's really fun to see those -- see that have a meaningful impact on our numbers. And then I'll let Ian touch a little bit more on some of the specifics, but first and foremost, this has been an awesome effort from our people.

Yes, I totally agree with Josh. I think the team has been absolutely fantastic in the way that not only in the environment where they were also used to visiting clients and having that face-to-face relationship. They've had to remove themselves from us and going to a remote working environment. And I think it's a testament to either relationships to our client success team and everybody who helps support them with our support team, our education team, the training team, work together and the relationships that they build. We've also seen that over the last 12 to 18 months, people have doubled down on their use on Domo, and they recognize the fact that we can return information far quicker than maybe some of the other providers that they might have at this point in time. Tie that into the work we've been doing to try to help educate and develop and show the business value and deliver results, really, really impressive performance across the globe of our client success support and education team there.

Just as a follow-up question. Josh, going back to the marquee customer you've been speaking about. You mentioned that you found the right people to partner with internally. I was just wondering if you could maybe expand on that comment. Is there sort of a recipe now that you feel is perhaps replicable across other large upsell opportunities that you think you've sort of track the code on how to win these deals?

Yes. I mean, first and foremost, it has to the pass the sniffer test, right? You got to have the CIO, look at it like, yes, this thing makes sense. So let me have my people check into it. They check into it. They all come back. Yes, this looks like we work great. What's next? What's the next step? And so you got to get buy-in from a lot of different departments, because eventually, these different departments have to pay for it. CIO doesn't want to -- no CIO, and I know, wants to have every part of the budget come out of their budget. Right? So there's going to be an allocation. That means you need to have business leaders stand up and say, yes, I'm going to get value out of this. I'm going to get a return on this. And then the other piece is being able to say, okay, all makes sense. Now how can we get the confidence this is going to work here. Where else have you done this at this scale, at this size. And we have plenty of customers where we've done this at this scale, at this size. But most of them kind of was one upsell here, another upsell there, another upsell here. It ended up in the right spot, but we want customers to be able to move more quickly, adopt more quickly. And that's what I think we're seeing here, because of all the work that we've done over the last several years. Because of the happy customers that we have, we now can get new -- relatively new customers that can come in and say, "Oh, I want to replicate what those people who have done over there". And so it was -- these big complex deals, they're big and complex, and it's finding all the right people internally to support the CIO's decision, and that's what we did, and it was not only on their side, but on our side as well. And it was just exciting to see kind of how that all came together.

And we have no further questions at this time. This will now conclude today's conference call. Thank you all very much for joining. You may now disconnect.