Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended July 31, 2026 for Domo, Inc. (Nasdaq: DOMO). The Company provides a cloud-based AI and data products platform. The reporting period is defined by a definitive Asset Purchase Agreement entered into on July 22, 2026, with Progress Software Corporation. Progress agreed to acquire substantially all of Domo's assets and employees for $400 million in cash, excluding net operating loss (NOL) carryforwards. Upon closing, Domo expects to repay its credit facility, change its name, and remain a publicly listed entity focused on monetizing its NOLs.
Key Financial Metrics
| Metric | Three Months Ended July 31, 2026 | Six Months Ended July 31, 2026 | Balance Sheet (July 31, 2026) |
|---|---|---|---|
| Total Revenue | $76.8 million | $156.2 million | - |
| Gross Profit | $59.2 million | $117.8 million | - |
| Gross Margin | 77% | 75% | - |
| Net Loss | $(9.6) million | $(23.8) million | - |
| Operating Cash Flow | - | $(1.2) million (Used) | - |
| Cash and Equivalents | - | - | $25.1 million |
| Total Debt (Current) | - | - | $137.2 million |
| Stockholders' Deficit | - | - | $(187.3) million |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 4% year-over-year for the quarter and 2% for the six-month period. Subscription revenue declined primarily due to a net decrease from existing customers, partially offset by new customer growth. Total customer count decreased.
- Expense Reduction: Sales and marketing expenses decreased 18% ($6.4 million) and Research and Development expenses decreased 6% ($1.2 million) for the quarter, driven by lower headcount and stock-based compensation.
- Increased G&A: General and administrative expenses increased 19% ($2.3 million) for the quarter, primarily due to $5.0 million in transaction-related costs associated with the Asset Sale.
- Debt Classification: Due to non-compliance with the minimum annualized recurring revenue covenant, the Company's term loan (principal of $138.3 million) was reclassified as a current liability.
- Warrant Liability: The remeasurement of warrant liability resulted in a $10.2 million gain (reduction of expense) for the quarter, compared to a $10.4 million loss in the prior year quarter.
Outlook, Risks, and Contingencies
- Going Concern: The filing states there is substantial doubt about the Company's ability to continue as a going concern. Cash on hand ($25.1 million) is insufficient to repay the accelerated debt ($137.2 million) if the Asset Sale fails.
- Forbearance Agreement: Lenders have agreed to a forbearance agreement contingent on the completion of the Asset Sale by November 30, 2026. Failure to close by this date could trigger immediate acceleration of debt.
- Transaction Risks: The $400 million purchase price is subject to downward adjustment if cash acquired is less than $25.0 million. A termination fee of $13.5 million may be payable to Progress under specific circumstances.
- Post-Closing Strategy: Following the sale, Domo will retain NOLs and cash proceeds. The Board intends to use proceeds to identify opportunities to monetize NOLs and potentially return capital to shareholders.
Investor Verification Checklist
- Asset Sale Closing: Verify the status of the Progress Software acquisition and whether the November 30, 2026 deadline is being met.
- Debt Covenant Compliance: Confirm that the forbearance agreement remains in effect and that no acceleration of the $137.2 million debt has occurred.
- Cash Position: Monitor the $25.1 million cash balance to ensure it remains sufficient for working capital until the transaction closes.
- Termination Fees: Assess the risk of the $13.5 million termination fee if the transaction is terminated due to a breach or competing proposal.
- NOL Utilization: Evaluate the Company's plan to monetize retained Net Operating Losses post-transaction, as this will be the primary value driver for the remaining shell entity.