DOMO earnings name for the interval ending December 31, 2024.
Picture supply: The Motley Idiot.
Domo (DOMO -8.80%)
This autumn 2025 Earnings Name
Mar 06, 2025, 5:00 p.m. ET
Contents:
- Ready Remarks
- Questions and Solutions
- Name Individuals
Ready Remarks:
Operator
Greetings, and welcome to Domo fourth quarter fiscal 12 months 2025 earnings name. At the moment, all contributors are in a listen-only mode. A matter-and-answer session will observe the formal presentation. [Operator instructions] As a reminder, this convention name is being recorded.
I’d now like to show the decision over to Peter Lowry, vice chairman of investor relations of Domo. Thanks. Chances are you’ll start.
Peter Lowry — Vice President, Investor Relations
Good afternoon. On the decision immediately, we’ve Josh James, our founder and CEO; and Tod Crane, our chief monetary officer. I will lead off with our protected harbor assertion after which on to the decision. Our press launch was issued after the market closed and is posted on the investor relations part of our web site, the place this name can be being webcast.
Statements made on this name embody forward-looking statements associated to our enterprise underneath federal securities legal guidelines. These statements are topic to a wide range of dangers, uncertainties, and assumptions. These embody, however usually are not restricted to, statements about our future and prospects, our monetary projections and money place, statements concerning the potential of our consumption mannequin, statements about our gross sales crew and know-how, our expectations for brand spanking new enterprise alternatives, transactions, and initiatives. Statements concerning our channel of communication and upcoming occasions, statements concerning the potential of synthetic intelligence and its impression on our enterprise, and statements concerning the impression of macroeconomic and different circumstances on our enterprise.
For a dialogue of those dangers and uncertainties, please seek advice from paperwork we file with the SEC. Particularly, immediately’s press launch, our most just lately filed annual report on Kind 10-Ok and our most just lately filed quarterly report on Kind 10-Q. These paperwork include and determine vital danger elements and different info that will trigger our precise outcomes to vary materially from these contained in our forward-looking statements. As well as, throughout immediately’s name, we are going to focus on non-GAAP monetary measures, which we imagine are helpful as supplemental measures of Domo’s efficiency.
Aside from income, except in any other case acknowledged, we might be discussing our outcomes of operations on a non-GAAP foundation. These non-GAAP measures needs to be thought of along with and never as an alternative choice to or in isolation from our GAAP outcomes. Please seek advice from the tables in our earnings press launch for a reconciliation of our non-GAAP monetary measures to their most instantly comparable GAAP measure, which we’ve posted to the investor relations part of our web site at domoinvestors.com. With that, I will flip it over to Josh.
Josh?
Joshua G. James — Founder, Chief Govt Officer, and Director
Thanks, Pete. Whats up, everybody, and thanks for becoming a member of us on the decision immediately. In This autumn, we exceeded our steering for billings, income, non-GAAP EPS, and adjusted free money move. Now we have additionally turned the nook on money technology and anticipate constructive adjusted free money move for Q1 and for fiscal 12 months ’26.
Our subscription RPO development accelerated to 14% 12 months over 12 months, and our long-term subscription RPO development accelerated to 38% year-over-year. I do not know what number of firms ever have had that large of a niche between billings development and long-term RPO development. It is actually top-of-the-line performances relative to billings development throughout the whole software program panorama that I do know of. RPO was over the $400 million mark for the primary time ever and is an extremely vital metric for our enterprise because it derisks income and signifies future stability.
I am notably enthusiastic about this enchancment in RPO due to what it represents. Previously, there might have been some misinterpretations concerning the energy of our buyer relationships, however as you possibly can see, a lot of our prospects have made long-term bets on the Domo platform and our capacity to evolve and develop with them. The development in RPO can be a constructive due to what it means for our retention fee. Longer-term contracts imply extra alternatives to assist our prospects undertake new use instances and obtain a significant return on their funding in our know-how.
This dramatic enchancment in executing longer contracts was achieved in solely two quarters of the 12 months of targeted effort. We imagine that we are able to proceed to maneuver the needle meaningfully on retention as we get higher and higher in executing on this plan over the following fiscal 12 months. Persevering with on the theme of enhancing retention, there are 4 methods we imagine we are going to meaningfully improve our capacity to retain prospects. Primary, after the macro modified in our retention together with it, we shortly made a change to cease charging for seats, which instantly altered the panorama for us.
Quantity two, we targeted on partnering with CDWs as the shortage of CIO endorsement was the mushy underbelly of the relationships with our prospects previously. Quantity three, we made an aggressive transfer towards shifting all of our prospects to consumption. Since then, we have tracked the well being of our buyer relationships primarily based on metrics reminiscent of person development, logins, and playing cards created. As anticipated, consumption prospects are adopting Domo considerably extra broadly of their organizations in comparison with the cohort of seat-based prospects.
And this places us in a a lot stronger place that we expect bodes properly for retention and upsell. As proof of this, in fiscal 12 months ’25, our consumption buyer cohort had gross retention of over 90% and internet retention of over 100%. We have made nice progress migrating our buyer base to consumption over the previous 21 months. We have gone from 5% of our ARR on the consumption mannequin roughly two years in the past to 25% on the finish of fiscal 12 months ’24, and now to greater than 65% on the finish of fiscal 12 months ’25.
Excitingly, I can see this approaching 90% by the top of fiscal 12 months ’26. What a dramatic change in such a brief window, and it’s very attributable to the efforts of all Domo sapiens. And eventually, the fourth transfer we have initiated to have an effect on retention is the main target to enhance the satisfaction of our prospects, resulting in for much longer offers for each renewals and new logos. We have had nice success getting increasingly of our buyer base into multi-year agreements.
And in case you simply do the straightforward math, the change in contract size alone ought to contribute no less than 2 share factors of enchancment in our gross retention fee in fiscal 12 months ’26 in comparison with fiscal 12 months ’25. Transferring alongside to our priorities, as a reminder, our main fiscal 12 months ’25 development initiatives have been to construct out our associate community, proceed so as to add AI innovation all through the platform, and shift our prospects to consumption pricing. As for our main focus firstly of the 12 months, we mentioned that this was going to be the 12 months of the ecosystem. All year long, we noticed companions bringing us top quality leads and serving to us shut new ACV.
Accordingly, we’ve reallocated our engineering sources to make Domo work extra seamlessly with our companions’ know-how and redirected our gross sales sources towards associate enablement. Our main associate focus has been with cloud-based knowledge warehouses, or CDWs. Over the previous few years, we have seen main CDWs turn into the middle of gravity in our ecosystem, and we imagine our foundational imaginative and prescient, technique, and platform make us a great associate for them. Domo is an AI and knowledge merchandise platform, and as such, as firms have acknowledged that AI and the digitization of companies have turn into extra vital than ever, they’re counting on Domo.
They acknowledge we’re uniquely positioned to allow superb experiences, hosted on a associate CDW, which advantages them and positions us extraordinarily properly within the knowledge ecosystem. Domo was architected to quickly ingest, retailer, put together, visualize, and analyze huge quantities of knowledge as a contemporary cloud-based platform. And since we are actually uniquely constructed to wrap round a cloud-based knowledge warehouse, or a CDW, a buyer can shortly and effectively implement a contemporary knowledge analytics resolution or leverage new AI alternatives with simply their most popular CDW and Domo, as an alternative of cobbling collectively 4 or 5 completely different options from completely different distributors. We went stay with our first CDW associate in June of 2024, and we have been instantly introduced into many strategic knowledge conversations.
Let me share a couple of of those offers with you, which spotlight the kind of success we’re seeing with our CDW companions. An leisure firm selected Domo as a result of its knowledge was siloed and its legacy BI vendor was not being adopted. The corporate was trying to consolidate its BI know-how stack to offer a greater built-in resolution that had the flexibility to low-code apps. Important to profitable this deal was our seamless integration with our CDW associate, together with our ETL capabilities, which run on high of our CDW associate’s infrastructure.
After evaluating our capabilities, the corporate changed its total legacy BI stack, together with Energy BI, with Domo and our CDW associate. One other win was with an engineering firm that selected Domo and certainly one of our CDW companions to interchange its current methods, which weren’t assembly the wants for its quickly rising variety of new services. After a proof of idea, the corporate selected Domo and our CDW associate primarily based on our superior real-time efficiency and the benefit of creating higher analytics for its new areas. Lastly, a quickly rising retail franchise administration firm was in search of an answer that might present franchise metrics reminiscent of income, membership development, and product stock with a business-friendly entrance finish and a scalable enterprise class backend to assist its speedy development.
The corporate selected Domo and certainly one of our CDW companions primarily based on the energy of our associate’s backend and our easy-to-use options and the general integration. These examples have been all This autumn new emblem wins with our CDW companions and certainly one of their strategic system integrators, or SIs, which is one other vital associate focus for Domo. Main CDW SIs are massively relied on and influential in a lot of our prospects within the broader knowledge panorama. They’re thought of area consultants and supply highly effective buyer suggestions.
The sort of endorsement creates extra lead move and a extra sturdy pipeline for us and the SIs’ involvement helps guarantee a profitable implementation for our mutual prospects. In FY ’25, we really added greater than 10 of those CDW system integrators as Domo companions, a number of of that are top-tier implementers of our CDW companions’ know-how. One other space of alternative for us is leveraging Domo All over the place to associate with our prospects to offer highly effective knowledge options to their prospects in a B2B2B or B2B2C setup. Information is extremely beneficial, however typically firms wrestle with unlocking that worth for his or her prospects and their companions.
Our Domo All over the place options permit prospects to unlock that worth by embedding knowledge and insights into their very own purposes. Partnering with Domo creates aggressive differentiation with out the necessity to construct an information sharing resolution internally, which offers price financial savings and monetization alternatives. Now we have dozens of multi-million greenback contracts from Domo All over the place because it continues to be a strategic and defensible a part of our enterprise. For instance, a cloud-based authorized case administration software program firm has been a Domo buyer for nearly a decade.
This buyer initially selected Domo to offer fundamental case administration analytics after which expanded to offer analytics round a wide range of inner use instances, together with gross sales, advertising and marketing, and finance. After having an amazing inner expertise with Domo, the corporate then partnered with us to create an exterior knowledge providing to enhance case administration and operational effectivity for his or her prospects. The corporate has added a whole bunch of shoppers for its new analytics providing, which is powered by Domo, and this not solely offsets their knowledge prices, however really now represents hundreds of thousands of {dollars} of income and margin for our buyer with loads of room to develop. And the fantastic thing about the partnership is that it offers extra publicity to Domo for his or her prospects.
In truth, dozens of their prospects now have turn into direct Domo prospects. With a big upsell in This autumn, this relationship now represents a number of million {dollars} for us that can be driving new environment friendly income as our associate. Whereas it’s nonetheless a difficult software program spending surroundings, one space the place we see firms keen to take a position and rising spend is round AI enablement, and we see AI as one other key development driver for us over the long run. Over the previous 12 months, we’ve seen AI bounce to the highest of everybody’s thoughts, dominating know-how spending and roadmap discussions.
AI options reminiscent of suggestion engines, machine studying, algorithms, and agent-like workflows have been part of the Domo platform lengthy earlier than AI went mainstream. We imagine Domo was constructed to capitalize on this AI second with enterprise-grade entry to knowledge merchandise in a protected, ruled approach. Our platform permits us to innovate quickly as a result of we’ve already constructed the foundational parts crucial for a profitable AI technique. That is the second the place knowledge and intelligence come collectively to drive actual enterprise worth, and we imagine we’re extraordinarily well-positioned.
In truth, Domo AI received a number of trade awards in This autumn, together with the 2025 DEVIES Award within the knowledge analytics and visualization class, the 2024 KMWorld Readers’ Alternative Award for Finest AI, and the Database Developments and Software Journal’s checklist of trend-setting merchandise in knowledge and data administration for 2025. Domo excels at connecting to all the info inside a corporation, one thing knowledge scientists have lengthy struggled with. However we not solely hook up with the info, our platform permits our prospects to remodel the info to make it AI-ready. We additionally acknowledged early on that prospects would need the flexibleness to select from a wide range of new fashions that have been being developed, together with these hosted in main CDWs like Snowflake, Databricks, Oracle, Google, or Amazon.
So, early final 12 months, we launched our AI companies layer, which lets prospects choose the mannequin of their alternative in a well-governed, safe surroundings. Our capacity to entry the proprietary knowledge wanted for AI, to curate it to be AI-ready, to use fashions to achieve insights, and to ship these insights to the road of enterprise is a core Domo competency. What our prospects are demanding is an ROI on AI investments, and Domo’s platform delivers it immediately. Domo’s highly effective instruments, mixed with consumption pricing, permits enterprise customers and knowledge scientists to shortly check out and entry synthetic intelligence capabilities with out having to allocate substantial incremental price range.
We’re listening to constructive buyer suggestions on each the energy of the Domo platform for AI and its low-friction accessibility. Our platform permits our prospects to create AI brokers and AI-driven workflows. These brokers carry out automated duties independently to drive unbelievable efficiencies. We developed workflows years in the past, and people capabilities, mixed with our AI service layer, have allowed us to quickly innovate to create agentic AI options, that are more and more turning into adopted by our prospects.
In abstract, Domo’s AI and knowledge merchandise platform lets individuals channel AI and knowledge into progressive makes use of that ship a measurable impression. Anybody can use Domo to arrange, analyze, visualize, automate, and construct knowledge merchandise supported by and amplified by AI. As we’ve moved to a consumption mannequin, we have seen that it higher aligns pricing with worth delivered, facilitates speedy adoption, and aligns with our companions’ pricing fashions. Consumption drives product-led development, as prospects are sometimes unaware of the huge capabilities of our platform.
With limitless entry to the platform, all of Domo’s capabilities are extra discoverable, which drives adoption, in fact. Consumption can be driving longer-term, extra strategic relationships with our prospects, as evidenced by 38% long-term subscription RPO development. For instance, final quarter, a packaging firm entered right into a five-year, virtually seven-figure settlement to interchange Energy BI with Domo. The corporate selected Domo as a result of we demonstrated a sooner time to worth, we’re higher capable of serve their inner constituents, and may extra successfully consolidate knowledge from acquired firms into their main ERP system.
Our consumption mannequin, which incorporates limitless seats, permits the corporate to broaden with Domo internally and thru acquisitions and gave the corporate confidence in getting into right into a five-year deal. Transferring on to an trade recognition, along with the Domo AI awards we obtained in This autumn, the Domo platform rose above the pack in a number of trade distinctions. This consists of receiving 5 Dresner Advisory Companies Expertise Innovation Awards, our eighth consecutive 12 months as a a number of class winner. Domo is acknowledged as a high vendor within the analytics platform, cloud computing and enterprise intelligence, embedded BI, collective insights and self-service BI knowledge of the crowds, thematic market reviews.
Domo was additionally ranked within the exemplary quadrant and obtained a number of high distinctions throughout 5 2024 Info Companies Group Analytics and Information Purchaser guides, together with gen AI analytics purchaser information, collaborative analytics purchaser’s information, cell analytics purchaser’s information, embedded analytics purchaser’s information, and analytics and knowledge purchaser’s information. In all, 5 purchaser’s guides, Domo scored an A- within the buyer expertise and TCO ROI classes. Lastly, Nucleus Analysis discovered that Domo prospects report a return of practically $7 for each greenback invested into our AI and knowledge merchandise platform. By the agency’s rigorous ROI evaluation, Domo prospects highlighted constant advantages, together with a 35% enchancment in person productiveness, a 20% know-how price financial savings, and a median 15% improve in income.
We’re, in fact, very excited that we’re as soon as once more internet hosting our annual person convention, Domopalooza, on March 18th to twenty first in Salt Lake Metropolis. You may anticipate to see new product bulletins and plenty of superb buyer tales from firms reminiscent of Samsung, Lenovo, Filevine, U.S. Financial institution, Harvard Enterprise Evaluate, the NBA, A&E Networks, Low cost Tire, TaylorMade, and Sony. I hope to see a lot of you there, and in case you’re coming, please attain out and we’ll join you with as many shoppers as attainable.
In conclusion, I am very happy with our This autumn outcomes. I imagine we’re completely making the fitting strategic strikes to get again to environment friendly development. As we sit up for fiscal 12 months ’26, we stay targeted on additional creating our associate relationships, enhancing our AI capabilities, and migrating the rest of our buyer base to the consumption mannequin. And from a monetary standpoint, I imagine we’ll begin to see the start of development acceleration whereas constantly producing money.
The progress we’ve remodeled the previous 12 months positions us very properly and offers a stable basis for defensible long-term development. And with that, I will hand it over to our esteemed chief monetary officer, Tod Crane.
Tod Crane — Chief Monetary Officer
Thanks, Josh. We exceeded our This autumn steering for billings, income, non-GAAP EPS, and adjusted free money move. Complete income was $78.8 million, with subscription income representing 91% of that quantity. This autumn billings have been $102.6 million.
In Q3, the year-over-year share enchancment in gross sales rep productiveness was the very best we had seen in 4 years. In This autumn, we continued that pattern, and the development in productiveness was even higher. That is crucial for us as an organization and has been a precedence of mine to verify we’re not solely getting again to development however doing so effectively. We ended the quarter with whole subscription RPO of $403.6 million, up 14% 12 months over 12 months, a big acceleration from Q3, and our greatest subscription RPO development end in over two years.
Subscription RPO past 12 months grew 38% 12 months over 12 months, and the typical contract size throughout our total buyer base continued to extend. Gross retention was 85% in This autumn, the third consecutive quarter at 85% or above, which is a pleasant enchancment from the place we have been. In Q1, we anticipate gross retention to stay across the present degree, and for FY ’26 as a complete, primarily based on the progress we have made in key areas, we anticipate no less than a 2 percentage-point enchancment. Our long-term purpose continues to be gross retention of 90% or higher.
Our year-over-year ARR internet retention was up sequentially for the second consecutive quarter. We see consumption as one other potential tailwind to gross and internet retention. In FY ’25, our consumption prospects had gross retention of over 90% and internet retention of over 100%, each of that are meaningfully higher than the cohort of seat-based prospects. In FY ’26, consumption renewals will characterize a bigger share of our renewal base and subsequently have a bigger impression on our retention metrics.
Our adjusted free money move was $6 million in This autumn, a big enchancment from Q3, and our money stability elevated from $40.9 million in Q3 to 45.3 million in This autumn. Trying ahead, we anticipate to be money move constructive in each Q1 and FY ’26. Transferring on to margins and profitability, our subscription gross margin was 81.4%, down sequentially because of timing of capitalized software program amortization. We anticipate this metric to be within the low-80s over the close to to medium time period, after which an expectation of returning to the mid-80s over the long term.
Non-GAAP working margin was 4.1%, and non-GAAP internet loss was 1.8 million. Non-GAAP internet loss per share was $0.05 primarily based on 39.3 million weighted common shares excellent. As a result of we’re in a internet loss place, all share and per share quantities are the identical for fundamental and diluted. As for steering, for the complete 12 months, we anticipate billings of 310 million to 320 million, GAAP income of 310 million to 318 million, and non-GAAP internet loss per share of $0.29 to $0.39, assuming 40.9 million weighted common shares excellent.
Our FY ’26 EPS steering implies a 2% working margin in FY ’26, an growth from breakeven in FY ’25. For Q1, we anticipate billings of 62 million to 63 million, GAAP income of 77.5 million to 78.5 million, and non-GAAP internet loss per share of $0.18 cents to $0.22, assuming 39.7 million weighted common shares excellent. Our Q1 billings steering displays the impression of roughly $5 million of renewals which have shifted out of Q1 to different quarters in FY ’26 because of consumption conversions that occurred in FY ’25. As our full 12 months billings steering signifies, that is only a matter of timing.
For Q2, we anticipate low single digits billings development, and from there, we anticipate a gradual acceleration in billings development for the rest of the 12 months. In conclusion, I’m very happy with the progress that we’ve made at constructing an environment friendly development engine, and primarily based on the actions we’ve taken over the previous 12 months, I imagine we’re well-positioned to enhance each our development and our profitability in FY ’26. With that, we are going to open the decision for questions. Operator?
Questions & Solutions:
Operator
[Operator instructions] Our first query is from Patrick Walravens with Residents JMP. Please proceed.
Patrick Walravens — Analyst
Nice. Thanks, and congratulations on the quarter. Hey, Josh, are you able to remark slightly bit about what you are seeing within the macro and if the entire kind of speedy motion popping out of Washington, D.C. is having any impact in your prospects and their willingness to tug the set off?
Joshua G. James — Founder, Chief Govt Officer, and Director
The final couple of years, which is, you recognize, individuals aren’t doing something that is not well-organized, that hasn’t been considered for a very long time, has a number of authorizations. There is no superfluous actions occurring proper now. So, that mentioned, you recognize, when they’re making a purchase order choice about us, it is one thing that is fairly properly backed with completely different metrics on their facet. And, yeah, it feels similar to the way it’s been.
RJ, do you need to add something to that?
RJ Tracy — Chief Income Officer
Yeah, I agree. I feel, you recognize, we have undoubtedly seen it the final couple of years, however I do not suppose we have seen something within the current time period but, however we’re at all times searching for it.
Patrick Walravens — Analyst
And, Tod, if I might ask two to you, I’d love to grasp slightly bit higher this dynamic between renewals and consumptions and the shift, the $5 million you have been speaking about. After which, secondly, in case you might simply speak about kind of money debt and the way you’re feeling concerning the stability sheet, addressing the stability sheet. Each of these can be actually useful.
Tod Crane — Chief Monetary Officer
Yeah. Thanks, Pat. Admire the questions. So, first on the shift, you recognize, as we labored by consumption conversions over the previous 12 months, lots of occasions when we’ve that dialog with a buyer, we’ll reset their renewal date.
So, usually they may’ve renewed in Q1. Now we have a dialog in the midst of their contract that might be in Q2 by This autumn. And after they resolve to make that conversion, we’ll really reset that renewal date into a brand new quarter. So, simply we had extra of a shift in renewal timing final 12 months than we usually do.
And the web impression of that was a 5 million greenback shift out of Q1 into the opposite quarters. On the opposite query, you recognize, concerning — remind me what the opposite query was, Pat?
Joshua G. James — Founder, Chief Govt Officer, and Director
Steadiness sheet.
Patrick Walravens — Analyst
The stability sheet — you recognize, yeah.
Tod Crane — Chief Monetary Officer
Yeah, on stability sheet and money, so I imply, very pleased with the free money move end in This autumn. Six million was really the very best money free money move outcome we have had in our firm’s historical past. So, joyful to see that money stability go up from about 40 million to 45 million-plus throughout the quarter. Now we have debt of about 120 million, however that is we have four-plus years to sort of cope with that.
So, proper now the main target is on getting again to development and on the identical time producing money and persevering with to bolster that money stability.
Patrick Walravens — Analyst
Nice. Thanks, all.
Tod Crane — Chief Monetary Officer
Thanks, Pat.
Operator
[Operator instructions] Our subsequent query is from Derrick Wooden with TD Securities. Please proceed.
Jared Levine — Analyst
Hello, crew. That is Jared Jungjohann on for Derrick Wooden. I used to be questioning in case you can speak to the partnerships you may have with Snowflake and Databricks. Possibly touch upon how deal exercise with them has been monitoring relative to your expectations.
Joshua G. James — Founder, Chief Govt Officer, and Director
Yeah, so we undoubtedly, you recognize, made a giant deal of internally and externally this final 12 months about we have been going to virtually rearchitect our firm to be targeted on the ecosystem, first, from a product standpoint and from a buyer expertise standpoint, after which secondly, from a go to market standpoint. And we felt like we made great progress there. We made a giant purpose out of it, and I feel we have been very profitable on the exercise that we had round it. The final quarter, I feel we mentioned this, this quarter, we have been hoping to see some knowledge and have the ability to begin to perceive how it should have an effect on our numbers and our development trajectory.
And there is a few items of knowledge that we noticed that is actually encouraging. To begin with, once we generate a lead traditionally, in case you take a look at the conversion fee of that in comparison with a lead that we generate from our ecosystem, our ecosystem converts at a few 5x improve in conversion fee. So, one lead from the ecosystem is value 5 leads that we generated independently. Secondly, in case you take a look at as soon as that lead turns into a stage three lead for us, which is mainly the place it is within the pipe and the gross sales reps are liable for closing it, we’ve a 2x to 3x improve in shut charges from the ecosystem than we do from usually generated leads.
So, we’re beginning to see lots of actually constructive exercise throughout not simply the CDWs, however our total ecosystem. And there is dozens and dozens of companions that we added final 12 months. Some are CDWs, some are the SIs for the CDWs, and plenty of of them are additionally companions which have come by Domo All over the place. And it is actually thrilling to see, you recognize, the large distinction in conversion charges.
And so now, it is all about constructing that pipeline. And we began simply final quarter to sort of add at a significant fee. And I feel, you recognize, as we glance to Q3 and This autumn, hoping to see some significant acceleration in precise offers which are closed. And hopefully, that may have an effect on billings in a approach that we’re not guiding to.
We expect that by the top of this quarter and thru subsequent quarter, we’re hoping to get some excellent news that may permit us to have the ability to elevate steering for the Q3 and This autumn numbers primarily based on what we’re seeing within the associate community. However, you recognize, that is been actually thrilling to see. And I feel from — so there’s the rise in closed charges. And there was one other piece that we have been going to say.
Do you keep in mind?
Tod Crane — Chief Monetary Officer
Yeah. One factor to bear in mind, whereas it could not have a big impact on our general billings quantity, it’s a significant share of our new enterprise.
Joshua G. James — Founder, Chief Govt Officer, and Director
Effectively, that is proper. Yeah. I knew there was one other piece. So, even this 12 months, it ought to have a fabric impression on the share of income that is derived from new logos, the share of billings that is derived from new logos.
We expect that our channel, our ecosystem goes to make up a really significant portion of that. I do not know if it will be a majority, however it’ll be a really substantial portion of that. And the factor that is thrilling about that, that is inside this fiscal 12 months. If that occurs inside this fiscal 12 months, then it should give us a ton of confidence about substantial acceleration the 12 months after that.
So, a number of nice indicators, a number of nice indicators, not sufficient for Tod and I to have the ability to say, “Hey, we’re working a public firm, let’s improve steering for it,” but. However we’re hoping by Q1 and Q2, we begin getting sufficient significant info there. And if these closed charges, these huge variations in closed charges maintain true, we expect they are going to as a result of we have a considerable sufficient pattern measurement already that we imagine that is correct. However assuming that is the case and assuming that pipe fills with the actions that we have already got occurring, we simply must proceed to do the identical factor that we’re doing.
And hopefully by, you recognize, finish of Q2, we’re capable of speak about steering Q3, This autumn that is going to be impacted by this channel. So, a number of nice progress there.
Jared Levine — Analyst
Thanks. Admire all the colour on that. After which, final one for me, clearly, you have completed lots of work on go-to-market movement to this point. However heading into the following 12 months, do you intend on making any further tweaks? After which, possibly simply touch upon gross sales hiring expectations as properly.
Thanks.
Joshua G. James — Founder, Chief Govt Officer, and Director
Any further tweaks to go-to-market? The channel and the channel go-to-market, is that what you are speaking about?
Jared Levine — Analyst
Simply go-to-market extra broadly.
Joshua G. James — Founder, Chief Govt Officer, and Director
I feel, you recognize, we’ll simply proceed to do extra of the identical. We have been shifting increasingly to the ecosystem. So, as we get good main indicators from that funding, and it’ll proceed to shift increasingly {dollars} there, the kind of profile of those who we’re hiring, discovering those who have expertise with the ecosystem or in any of these CDWs, we’ll undoubtedly proceed to look to rent that sort of a profile. After which, the one different distinction or change that I’d speak about is simply our deal with adoption.
As you progress over to consumption-oriented firm, you are not promoting concepts and aspirational use instances that you simply hope a buyer can signal as much as. You are really simply serving to the client use the product and discover satisfaction and discover ROI. And as they try this, their consumption will increase. So, it is a completely different movement.
It is a extra satisfying movement. The purchasers prefer it. It is simpler to stroll right into a buyer and say, “Hey, we simply need to present you the right way to use the product higher.” And so they’re excited to try this as a result of it does not include a giant upfront price. They will incrementally strive it.
In the event that they get a return, then they do extra of it. However that requires a special sort of ability set as properly. So, you recognize, we’ll proceed to shift increasingly technical by way of the profile of those who we’ve on the group.
Operator
Our subsequent query is from Yi Fu Lee with Cantor Fitzgerald. Please proceed.
Yi Fu Lee — Cantor Fitzgerald — Analyst
Thanks for taking my questions, and congrats on the robust end to fiscal ’25. Good afternoon, Josh and Tod. So, a pair for Josh after which a pair for Tod as properly. So, sticking with our associate ecosystem replace, as this can be a large a part of our thesis, I used to be questioning in case you might give us extra replace on the acceleration from the transition to the consumption to the partnership mannequin the place, you recognize, we’ve the CDW companions, the ISV companions, hyperscalers.
And now, like immediately, Josh, you talked about SIs. Are you able to give slightly bit extra shade on how this channel is managing the SI? And, maybe, converse slightly bit extra about that five-year, seven-figure deal you are speaking about. Is it like a wall-to-wall adoption?
Joshua G. James — Founder, Chief Govt Officer, and Director
Yeah. Nice. Thanks. Undoubtedly nuances to all of the several types of companions.
And, RJ, be at liberty to leap in if you wish to add any shade. However several types of nuances with every associate. The CDWs, you recognize, we’re seeing nearly all of exercise from the CDWs. But it surely’s not essentially the CDWs.
It’s the CDWs plus the SIs. And in lots of instances, it is simply the SI that is facilitating that relationship. And with the SIs, particularly in that CDW world, in case you go take a look at the highest — in case you go take a look at these high CDWs and take a look at their high 5 SIs, we’ve relationships with nearly all of these SIs and with the very best SIs. And, you recognize, I feel it is honest to say a lot of them are fawning over us.
And so they’re saying issues like, you recognize, “We used to go to market with 4 or 5 completely different distributors each time we bought concerned. But it surely’s a lot simpler to work simply with you guys.” Or we did an analysis of all of the distributors within the area, and one SI mentioned, “We evaluated you and listed you on the high,” and mentioned there was an enormous hole, after which there was everyone else. So, we’re getting actually constructive suggestions from the SIs. And that is been very encouraging as properly.
And we’re simply beginning to scratch the floor on how that is going to impression our enterprise. However once more, nothing however actually constructive suggestions there. After which from the Domo All over the place sort prospects, we have been — we have closed some nice offers. Now we have some nice prospects already.
I feel we have been woke up slightly bit this final quarter to the chance that is there. And likewise to some of the blockers that will have existed in our product, and so with the ability to deal with that slightly bit extra. We had a few prospects actually spotlight for us a couple of areas the place if we enhance, it might actually transfer the dial. And since we now have this associate movement, we’re capable of go and actually assist these prospects mine their buyer bases and assist them generate income.
So, it truly is a win-win as a result of we’re making it sooner and faster for them to have the ability to go to market, make their prospects happier as a result of they’re offering them knowledge. And it is consistent with the opposite info that and the opposite software program that they are promoting to them. After which, we’re serving to them enhance and improve their income by promoting this analytics add-on. So, they’re capable of offset the price they have been paying for Domo within the first place and, in some instances, make substantial income and revenue margin out of it.
After which on the identical trip the again finish comes good offers for us, in some instances, multi-million greenback offers. So, it is a actually good enterprise for us as properly. And undoubtedly proceed to be excited concerning the ecosystem. Nothing however constructive indicators proper now from each portion of the ecosystem.
Yi Fu Lee — Cantor Fitzgerald — Analyst
Josh, are you able to speak concerning the Databricks? I think about for this quarter you added Databricks to the combo. So, I perceive you are in all probability working with Snowflake, Databricks. So, how does that add to the combo by way of including like, you recognize, an excellent stable CDW to the combo?
Joshua G. James — Founder, Chief Govt Officer, and Director
Yeah. So, it has been — actually, we did not carry everyone on on the identical time. And in case you take a look at all of the CDWs, we’ve extra momentum with a few of them than we do with the others. However there’s 5 CDWs that we’ve fairly substantial relationships with, you recognize, the place we have sort of been by the chief course of.
Now we have government relationships. They’ve kicked the tires. We have completed the due diligence. They’ve completed the due diligence.
We have gone to some joint prospects collectively. We have talked about joint merchandise collectively. We have developed to their technical specs to verify all of the APIs and our merchandise work properly inside the framework that they need their prospects to have an expertise in. And so, now, we won’t put all of our efforts to all of them on the identical time.
So, like I discussed earlier than, those which are leaning into us is the place we’re leaning again first. I feel the problem proper now could be they’re all leaning in towards us much more intensely than we’ve the sources to lean again. However, yeah, Databricks is certainly, you recognize, a CDW that is approaching fairly shortly, and we’re having lots of nice experiences with them and with their SIs. After which, you recognize, we have a number of others, some earlier than and a few after, amongst that checklist of Google and Oracle and IBM.
And I will let RJ speak slightly bit extra about, you recognize, a number of the different actions we’re having with a few of these newer CDWs that we’re working with.
RJ Tracy — Chief Income Officer
Yeah. And one of many issues I am enthusiastic about is, finally, we’re eradicating friction out of the gross sales cycle. And that friction that we’re eradicating was unintentional within the first place. We have been by no means attempting to compete.
However eradicating the friction is actually good for Domo. It is good for patrons. It is good for the CDWs, for SIs, as a result of it offers prospects alternative. It permits us to associate and let the CDWs do what they do properly.
And completely different CDWs have completely different strengths. And this permits prospects to buy their knowledge basis and permits us to have a symbiotic relationship the place our objectives are aligned. We would like prospects to get worth out of their knowledge. And Domo’s actually good at serving to to hydrate these clouds, at offering ETL capabilities to those clouds, offering a option to disseminate that info out, AI brokers.
, we have a complete AI technique that every one these clouds are actually enthusiastic about as a result of it leverages all of the cool issues they’re doing with LLMs and the entire infrastructure that they’ve in place and permits us to be the automobile that will get it out to everyone. So, I am actually enthusiastic about it.
Yi Fu Lee — Cantor Fitzgerald — Analyst
Thanks for that.
RJ Tracy — Chief Income Officer
Yup.
Yi Fu Lee — Cantor Fitzgerald — Analyst
Thanks for that, RJ. Thanks for that, Josh. Can I simply squeeze in yet another, Josh, earlier than I ask Tod on the monetary questions? We have seen IBM acquisition of DataStax. I do know it is an space inside Information Cloud.
And Snowflake eyeing Redpanda, you recognize, coming from the media. I used to be questioning, has this elevated the dialog by way of M&A on this area? Only a transient tackle it, Josh, earlier than I’m going on to the monetary questions.
Joshua G. James — Founder, Chief Govt Officer, and Director
Yeah, I feel, you recognize, that is one of many issues that we mentioned we have been open to, in fact. And, you recognize, we mentioned to be able to maximize the worth that does exist right here at Domo, we want relationships with a number of CDWs. We have to present the worth that we offer to the ecosystem. As RJ talked about, we weren’t attempting particularly to chop ourselves out of these relationships and people conversations.
However there was notion that we have been aggressive with each CDW on the market. And fixing that has, I feel, actually opened the eyes of the entire CDWs. We had one CDW only recently say, “, our No. 1 competitor within the CDW area, we have at all times struggled competing with them as a result of their ease of use is extra substantial than our ease of use.
However us plus Domo, we really feel like that neutralizes the benefit of use immediately. After which the client will get extra of the complexity that we provide.” So, we’re — and that is the CDW telling us this. So, we’re beginning to see, you recognize, them actually acknowledge there is not any different firm like ours. We’re unbiased.
We’re not owned by any of their opponents. And we’re not only one piece of six, we’re all of them. And the combination really helps. Oh, and by the best way, if you wish to construct an AI product, if you wish to construct some sort of agentic performance on high of that, you are going to need that enterprise class.
You are going to need to have it ruled. You are going to need to have it safe. You are not going to need to have it go between 5 or 6 completely different distributors. And right here we’re simply sitting right here.
We simply actually wanted to repair this piece to unlock it. And it should take us by the top of the 12 months earlier than all of the know-how is working as easily as we wish it to for all of those CDWs. However I really suppose we’ve a extremely good path for a very long time as an unbiased supplier to all of those of us as a result of they do not really feel threatened by us. And if alongside the best way, hastily there’s consolidation for our area, then we expect we will be in a major place with a number of events on the desk as a result of they’re recognizing the worth we’re offering to their prospects.
Yi Fu Lee — Cantor Fitzgerald — Analyst
Received it. Thanks for that, Josh. And, Tod, I will offer you one fast one on the monetary facet. I perceive the steering, and I recognize that the primary time it sounds such as you guys are going to construct a pipe for a greater third quarter and fourth quarter.
This fashion you might, maybe, alter the steering later. However the good factor is you are going to free money deposits for the whole fiscal ’26. I used to be questioning, what are a number of the issues that, Tod, you might see that might probably offer you extra confidence to information larger as we go alongside the 12 months?
Tod Crane — Chief Monetary Officer
Yeah, there’s a few issues there. As we have talked about, the leads proceed to come back in steadily on the associate entrance, which we’re actually, actually glad to see. The conversion charges are multiples larger for associate offers than they’re for nonpartner offers. The piece of it that we’re nonetheless ready to get slightly extra predictability and consistency on is the quantity of these leads.
So, as soon as we really feel like we’ve a superb beat on that quantity, I feel that is going to offer us the arrogance we have to bump up that steering for the again half.
Yi Fu Lee — Cantor Fitzgerald — Analyst
Received it. Thanks for that, Tod. And thanks very a lot, Josh.
Joshua G. James — Founder, Chief Govt Officer, and Director
Thanks. See you quickly. See you quickly.
Operator
Thanks. With no additional questions, it will conclude immediately’s convention. [Operator signoff]
Period: 0 minutes
Name contributors:
Peter Lowry — Vice President, Investor Relations
Joshua G. James — Founder, Chief Govt Officer, and Director
Tod Crane — Chief Monetary Officer
Patrick Walravens — Analyst
Josh James — Founder, Chief Govt Officer, and Director
RJ Tracy — Chief Income Officer
Pat Walravens — Analyst
Jared Levine — Analyst
Jared Jungjohann — Analyst
Yi Fu Lee — Cantor Fitzgerald — Analyst
