Greetings. Welcome to Domo's Fourth Quarter Fiscal 2026 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Cory Edwards, Vice President of Corporate Communications. Thank you. You may begin.

Good afternoon. On the call today, we are joined by Josh James, our Founder and CEO; and Tod Crane, our Chief Financial Officer. I'll begin with our safe harbor statement. Our press release was issued after the market close and is available on the Investor Relations section of our website. Please note that today's call contains forward-looking statements about our business as defined under federal securities laws. These statements involve risks, uncertainties and assumptions, including, but not limited to, statements and projections about our future financial performance, growth prospects, cash position, sales efforts, technology developments, new business opportunities, transactions and initiatives, the potential impact of artificial intelligence and macroeconomic factors on our business. For a detailed discussion of these risks and uncertainties, please refer to our public filings, including today's press release, our most recent annual report on Form 10-K and our quarterly report on Form 10-Q, all available on the SEC website. These documents outline important risk factors that may cause actual results to differ materially from our forward-looking statements. We will also discuss non-GAAP financial measures during the call, which we use as supplemental indicators of Domo's performance. Unless otherwise stated, all results discussed today other than revenue are on a non-GAAP basis. These measures should be viewed as complements to, not substitutes for our GAAP results. A reconciliation of our non-GAAP results to the most directly comparable GAAP measures can be found in today's earnings release and on our Investor Relations website at domoinvestors.com. With that, I'll turn it over to Josh. Josh?

Thank you, Cory. Hello, everyone, and thank you for joining us on the call today. As we close out the year, I want to begin by highlighting some important achievements for the fourth quarter. We achieved record quarterly billings, delivered the strongest gross retention in 3 years, posted the highest operating margin and best EPS in company history and recorded our best ever full year free cash flow result. Now let me get into the details behind these accomplishments. We achieved our highest quarterly billings ever, totaling $111.2 million, which represents 8% year-over-year growth, the strongest we've seen in 3 years and also exceeding our billing guidance for the quarter. This performance was driven by higher retention, accelerating adoption of our consumption model and expanding partner ecosystem activity. Increasingly, customers are using Domo not just for analytics, but as the operational layer that powers data products and AI-driven workflows across their organizations, which naturally expands consumption over time. We also achieved our highest gross retention rate in over 3 years, coming in at over 88%, underscoring the durability of our customer relationships, particularly as multiyear consumption contracts continue to deepen. Net retention also improved by over 4 percentage points year-over-year and is now over 96%, making the sixth straight quarter of sequential improvement in this metric. Notably, the cohort of customers who started on consumption contracts, representing over $24 million in ARR, achieved an impressive net revenue retention of 111% in Q4, highlighting the value our customers are getting from our consumption model. Our operating margin for the quarter was over 10%, reflecting disciplined execution and efficiency improvements that lay the groundwork for durable profitability. Importantly, this translated into an all-time high for quarterly earnings per share. At the heart of Domo's opportunity is an innovative cloud-native platform, which is…

Thanks, Josh, and thanks, everyone, for joining us today. We delivered strong financial results in Q4, exceeding our billings guidance with our highest ever result of $111.2 million, representing year-over-year growth of 8%, the highest we've seen in 3 years. For the full fiscal year, we achieved billings of $318.7 million, representing a 3% increase over the prior year, marking our first full year billings growth since fiscal '23. Our gross retention rate improved to over 88%, marking the highest level in 12 quarters and reflects the strength of our customer relationships as well as the progress we've made on moving to a consumption pricing model, expanding our ecosystem partnerships and landing more multiyear contracts. ARR net retention was over 96%, up sequentially for the sixth straight quarter and a year-over-year improvement of over 4 percentage points. One of the key factors contributing to this improvement is the retention profile of customers on the consumption model, which continues to be well above that of our seat-based customers. ARR net retention for the customer cohort that began on consumption continues to be well above 100%, coming in at 111% in Q4. One of our most significant achievements in the past few years has been the monumental effort of moving from a traditional seat-based model to a consumption-based model. We ended fiscal '26 with 84% of our annual recurring revenue on consumption pricing, a major accomplishment. Now that we have the vast majority of our ARR on consumption, we will no longer be providing regular updates on this metric. Our operating margin for the quarter was a record high 10%, which contributed to the highest full year operating margin in company history at over 6%. We also achieved our best ever EPS result, which was the third consecutive quarter of positive EPS…

[Operator Instructions] Our first question is from Derrick Wood with TD Cowen.

This is Cole Erskine on for Derrick. Josh, I'll start with you. Can you just talk about what you're seeing out there in the competitive environment and if there's been any changes in win rates versus competitors?

Yes. I think the biggest thing that we're seeing is just how much our customers are talking to us about AI and agentic opportunities. I think it's gone from vibe coding is cool to how do we implement actual solutions inside the organization that are governed, that have the security that we need and that can be distributed in a responsible manner. And that highlights the platform that we have. So that's probably the biggest thing that we've seen. In addition to that, definitely, we continue to be embraced by the ecosystem. So I would say all of our ecosystem partners, we have a better relationship, substantially better relationship with them than we did 6 months ago even. Their field sales are getting to know us. We've got a better brand with those sales organizations and we're getting more introductions to their customers. Just recently with a big Snowflake customer, they were trying to figure out how to roll out an agentic solution and they were struggling to get it done in the speed that they wanted to, and they came to us and actually, Snowflake came to us, and we went in jointly, and now we're developing a solution for them on the Domo platform in a very rapid pace. So it's just exciting to be embraced by the ecosystem, and we think that we're set up to finally start to see some of these investments that we've made into the ecosystem start to pay off this year.

Super helpful. And then, Tod, just a follow-up. I know you guys aren't guiding for next year, but would love a little bit of color on where gross retention and NRR could go by the end of the year, some solid progress this year, but just wondering how that shapes out next year?

Yes. Thanks for the question, Cole. Yes, as we look ahead, really encouraged by the net retention rate we saw with our consumption customers this quarter. And as that -- we continue to get further and further into that customer base, and we have more time for them to be part of our adoption motion and get more technical people in front of them. We expect that things are going to gravitate upward towards that level. So it's that -- it's consumption, it's adoption. It's also as we go in more hand-in-hand with the CDW partners going in the front door with the CIO and being part of the global data strategy for the company, that continues to really help and bolster our efforts with our customers and being -- having much stickier implementations with those customers. And then the multiyear contracts as well, right? We've continued to make a lot of progress there. And as we continue to work on extending those contracts out, that's going to all contribute towards things being up and to the right with retention.

Our next question is from Brett Huff with Stephens.

I'm sorry about that. Can you guys hear me now?

Yes.

Congrats on a nice quarter. Two quick questions for me. Josh, you talked a lot about some of the things that differentiate what you all are doing versus competitors. And it sounded like one of those -- a big one was time to value and another big one was your ability maybe leaning on your ETL routes to sort of be already a central data hub. In the data right and difficulty sort of getting these tools to produce an actual real result has been a big kind of stoppage in AI. Are you seeing and hearing that? Is that why you're winning? What is the dialogue around that?

Yes, that is why we're winning. The fact that it is a platform. People are -- they are vibe coding or they're coming up with these ideas that they think may be achievable now. But the implementation of those ideas is where the rubber hits the road, and that's where Domo really excels. So whether it's hydrating somebody's cloud data warehouse for our partners or stitching together data that they already have, being able to do that in an environment where they also can pull in any LLM model that they want and then having all the workflow capabilities that we had before AI became a thing. Just having all that functionality in one platform is something that does help us stand apart because the time to value, as you pointed out, is dramatically different than elsewhere. And so we're seeing that with our CDW partners, their customers were being brought into those deals and their customers see us as a way to be able to implement and create these agentic solutions that deliver the value that they've always been trying to get out of all the investments they've made into storing their data and organizing their data, putting it in an environment where it could actually be utilized. And this is the win that you get out of all that work. And we're seeing that with even a top 5 customer of ours for a long time had been resistant to looking at some of our pro-code apps and literally, over the weekend, one of our representatives that was working with them finally convinced them to let him go and create something over the weekend that they would take a look at. And literally, over the weekend, he created something that for several million dollar account for us. They looked at it on Monday. We're so ecstatic about it that they started rolling out many pro-code apps and agentic solutions that have made it all the way up to the CEO in that organization, dramatically changing our relationship in a place where we already had a good relationship, but it's just dramatically heightened at this point. So it's really fun to see the time to value. It's fun to create all these solutions. These solutions, we don't go and charge for the creation of the app. We go and it's a consumption business. So as these customers become familiar with the agentic solutions they can build and that we can build for them and that our partners can build for them and that they can build themselves, as they go and make one, they end up making 10, 20. And each one of those drives consumption of our products. So we're excited to see the lift that comes over the next 24 months as our customers roll these things out and become more and more familiar with what our platform can do for them.

That's super helpful. And then, Tod, maybe one for you. Last quarter, you mentioned that the sales cycles were getting longer, and I don't think we were surprised by that just given there's more hoops to jump through now that you're talking to more C-suite folks in a much larger sort of use case. Can you talk about that dynamic? Maybe it's still occurring, but are you getting some value maybe quicker as well? Or tell us the pros and cons of the puts and takes on that trend.

Yes. As we discussed last quarter, we had some deals sort of elongate a little bit and had some timing where we fell a little bit short of our billings guidance last quarter. But as we talked about, those closed early in this quarter, which gave us a nice leg up, and we were glad to see that momentum continue throughout the quarter and be able to deliver a nice billings beat. But in terms of the overall trend with these partner deals, it's a mix, right? There's some that are taking longer because we're part of that global data conversation, and it's a good thing in the end, but there's also deals that are coming through really quickly. And we've got -- actually got RJ here, our CRO, and he's got some other thoughts that he can add here.

Yes. And we're making good progress on just figuring out these deals with the different ecosystem partners. And early on, we were focused more on new logo deals. They were a lot more willing to bring us into some of the new logo opportunities. And we were figuring out our motion there, and they still have to buy the warehouse partner and they've got to buy Domo. And so those deals do take a little bit longer. And now we're starting to see more introductions into their current customer base as well, and those deals seem to happen quite a bit faster. So I think we'll see, hopefully, that mix overall come down. And overall, making really good progress, and we're excited about what we're seeing with the different ecosystem partners that we're selling with them.

Our next question is from Patrick Walravens with Citizens Bank.

This is Kimson on for Patrick. So it's my understanding that if a customer has committed spend with one of your partners, they can spend those credits on Domo through that partner's marketplace. Josh, you mentioned a few customers that you guys won this quarter. I'd love for a little color on if any of those use that sort of mechanism or what you're seeing broadly across your customer wins in relation to that metric?

Yes, I'm going to let RJ take this one.

Yes. So we saw in Q4, probably one of our largest quarters of customers using those MCD funds to purchase Domo. And it's a really good spot to be in. We've had customers even in the last couple of months where in talking with them, they're like, "Hey, we may only renew 1 year with you guys. And we get into the discussion further and it's because, oh, we're a Google shop or we're an Amazon shop or we're a Snowflake shop. And now being able to come to the table with those partnerships, we had 2 in particular that were pretty large opportunities for us. And instead of doing a 1-year renewal and potentially leaving us after a year, it turned into -- both of them turned into 3-year renewals with upsells, and we're now growing those accounts because we're part of the overall data strategy. It's budget that's already been spent. These customers don't have to go get the new budget. They don't have to go find more funds. They can just pay for the Domo contract, we upload it to the marketplace and then we get paid from the vendor. And so it's been an awesome motion for us. And I know there's a lot of deals out there in the past that we've lost strictly because they couldn't use those MCD funds to purchase, and it was a much easier effort to just use those funds with other vendors. And now we're part of those purchasing decisions. So...

Our next question is from Lucky Schreiner with D.A. Davidson.

Great. Congrats on the quarter. I wanted to ask on the improvement in consumption customer net retention that was quite significant in the quarter. Can you maybe provide a little more detail into what drove that rise in usage? And should we expect this metric to remain pretty volatile moving forward?

Yes. I mean we continue to expand our adoption efforts with these customers. And every quarter that goes by, we get more time under our belt, kind of refining the model and refining the interface that we have with those accounts. So I'd say just generally across the Board, we're working to get technical resources in front of these customers, help them solve problems, help them stand up new use cases. We're working on getting more of our Agentic AI capabilities front and center with customers as well and getting some of those stood up. So it's really a combination of factors. And then just the ability for customers on the consumption model to be able to go and explore different components of the platform. They don't have to commit to a big upfront spend to go try some of our premium functionality. They can go and stand up a couple of workflows or stand up a couple of AI models and try some of our sentiment analysis, summarization that's really easy for nontechnical users to do inside the platform. And if they like it, they can lean in and do even more. So yes, no, as we continue to expand these motions, we expect that there's upside to those numbers that we've been reporting for that cohort.

Got it. Makes a lot of sense. Last question for me then. It sounds like the business is trending really well. You had strong billings growth and retention is improving. But you still expect GAAP revenue to remain flat. So maybe can you help us understand some of the assumptions going into that outlook for the year?

Yes. The way that our consumption contracts are structured, we still recognize revenue evenly over the contract period. So that makes revenue more of a lagging indicator. So it's kind of -- it roughly follows the trend in the previous year billings. It just takes a little bit longer for that revenue number to move.

Our next question is from Max Michaelis with Lake Street Capital Markets.

Just one for me. I want to go back to the consumption model and some of the customers on that. I'm not sure when the renewal cycle for the first customer contract is up, but I was wondering if you can give us an idea on some of the volume that these customers are using and maybe they're increasing their usage with Domo and maybe percentages around customers that have increased the consumption that they began on and now where they're at now, that they've increased that [indiscernible]?

Yes. I think the net revenue retention numbers we reported the last few quarters for that cohort that started on consumption is a really good indication of that level of expansion, right? We were well over 110% this quarter. Yes. So I mean, as we continue to -- again, as we continue to work on our motion there, I think there's upside to that. The other metrics that we talked about last quarter, we gave some usage metrics. We continue to see monthly active users up pretty significantly over the last couple of years. We look at that trend with across our data set, our ingestion capabilities, our ETL capabilities, our AI capabilities and across the Board, it's up and to the right in terms of the number of users that are using our functionality. So it's just great to see that our thesis with the consumption model and enabling our customers to more easily go explore the platform is playing out like we expected it to.

With no further questions, we would like to just give final chance to re-prompt [Operator Instructions] We will just pause for a brief moment to see if there's any final questions.