There were strong underwriters behind this deal, including Morgan Stanley, Credit Suisse, UBS, and Allen & Co, which helped its cause. Furthermore, the float is light at just 9.2 mln shares, so there wasn't a huge amount of supply for investors to soak up. This could be a positive factor for when the stock opens for trading later this morning on the Nasdaq.
Domo connects data from different departments of a business and provides real-time data insights so that the CEO can manage the company from their phone. Through Domo's platform, data from across the business is collected, stored, prepared, organized, analyzed, visualized, and shared.
The real-time connections are facilitated by connectors called DomoBots and visualization tools. Domo also created an artificial intelligence and machine learning engine that is able to find correlations within the data and invites users to action. Domo also built an app store with pre-built applications as well as the tools for users to build their own applications.
Domo derives revenue primarily from subscriptions and professional services. Subscription revenue consists primarily of fees to provide customers with access to its cloud-based platform, which includes online customer support at no additional cost. Professional service fees include implementation services, optimization services, and training. Subscription revenue accounts for about 80% of revenue.
Looking at its recent results, FY17 revenue came in at $74.5 mln then it rose 46% to $108.5 mln in FY18. In 1Q19 (Apr) revenue rose 32% year/year to $31.9 mln. In terms of margins, they are far away from operating profits. However, gross margin has been improving: 55.5% in FY17 then 58.6% in FY18. In 1Q19 (Apr), gross margin eclipsed the 60% mark at 63.8%, up from 59.8% in the prior year period.