Earnings Call
Domo, Inc. (DOMO)
Earnings Call Transcript - DOMO Q4 2021
Operator, Operator
Ladies and gentlemen, thank you for standing by. And welcome to Domo's Fourth Quarter Fiscal Year 2021 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. Please be advised that today's conference is being recorded. And with that, I'll hand the call over to Peter Lowry, Domo's Vice President of Investor Relations.
Peter Lowry, Vice President of Investor Relations
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 on to the call. Julie?
Julie Kehoe, Chief Communications Officer
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, and the impact of COVID-19 on our business and our financial conditions. 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 the most directly comparable GAAP measure. With that, let me hand it over to Josh. Over to you, Josh.
Josh James, CEO
Well, thank you, Julie. And hello, everyone. Thanks for joining us on the call today. I hope that everyone in the family is in good health. I'm grateful for every member of our team who, over the last 12 months, found the dedication, creativity, and resolve to support our customers and our business, resulting in what was really an outstanding year. I'm optimistic about the macro recovery that's in front of our entire society, as we all focus on getting back to normal. Now to Domo's performance. We really had a breakout quarter and year, and I am so proud of our team and the decade of work from so many people. Q4 capped a tremendous four quarters for Domo. In Q4, we posted 28% billings growth, 26% subscription revenue growth, and 23% total revenue growth. So, over the last four quarters, that's billings growth that started at 13% in Q1, grew to 23% in Q2, 25% in Q3, and now 28% in Q4. I'm excited beyond belief to see that acceleration. And also, we set ourselves up to really execute well as we enter into this new fiscal year. Digital Transformation initiatives remain a top IT spending priority in 2021. And over the year, we've seen that the demand for modern BI has accelerated. It fits squarely into our value proposition of helping customers leverage their existing BI investments, do it at a massive scale in the cloud, and at an unbelievable speed. In many cases, businesses want data faster than ever and are embracing transformation for all parts of their business, from machines to end users. As an example, a cold chain equipment manufacturer needed to closely monitor sensors for temperature-controlled refrigeration units, housing COVID vaccines. This customer is connecting to IoT data compliance, the CDC, and other regulatory data to effectively manage safe vaccine distribution. By the way, we delivered that solution for them in less than 60 days. And these examples are becoming more and more common. Just last week, a CIO customer proactively reached out to us to let us know how ecstatic they are with Domo. They're innovating this company with Domo to create a new service that is the insurance industry's first true aggregated view of the entire insurance experience, between the insurance consumer, insurance agency, and the insurance carrier. All seen, analyzed, and dynamically presented by Domo. To put some of this in numbers, Domo is helping this company bring together 143 cloud data connections across 17 different Salesforce orgs, creating over 7 million rows of data, representing over $170 million in insurance premium. As he said to us, this is only the beginning. We also introduced several new product capabilities to make it easier to put any data to work more effectively. And we've seen a market that is moving in our direction, resulting in better recognition of Domo's unique value. To build on this point, as we've seen with much of the consolidation that's been taking place in our space, Domo was way out in front of building the future model for modern BI. We're now seeing this come to fruition as not only have we been copied by many others, but finally, the market is coming to us and recognizing that leadership and our vision. Finally, we've dramatically improved our analyst rankings. For instance, Domo moved into the challenger quadrant in the ever-important 2021 Gartner Magic Quadrant for analytics and business intelligence platforms. This is due to the recognition of the quality of our products, particularly in the areas of data preparation and manageability, which gives line of business, IT, and data leaders more capability and competence to put data to work at scale, in record time across the entire business. This improved ranking in the Gartner Magic Quadrant will certainly have an impact on our business. Given a reputation for delivering easy-to-use solutions that appeal to line of business executives, we believe our full end-to-end capabilities should really be a tailwind to our sales efforts. On our go-to-market, we're finding that our message of delivering BI leverage at cloud scale in record time continues to resonate. In addition, led by our sales leadership of Ian Tickle, Jeff Skousen, and Jim Kowalski, but also led by many other sales leaders throughout Jeff's and Jim's U.S. organizations, and also led by our sales leaders in Europe and Asia. Our sales rigor and sales force productivity have significantly improved, resulting in better new business cadence throughout the year. I’m really proud that we achieved our strong top-line performance while driving operating expenses down year-over-year. This has also put us in a much better position financially. We reached the adjusted operating cash flow positive milestone in Q3, and in fact, we were free cash flow positive in Q3 and Q4. We also ended the year with more than $200 million of ARR across more than 2,000 customers and more than $90 million of cash in the bank. We’ve also made strong progress with our Domo Everywhere solution. Now, this is our offering that helps customers extend the value of their data outside their organizations to their customers, partners, and suppliers. Domo Everywhere isn't just embedded analytics; it also allows a full Domo experience to our customers' customers, helping them deliver new data experiences and create new revenue streams by monetizing data that they already have. We have a very strong pipeline of Domo Everywhere deals heading into fiscal year '22. Last year, in fact, we closed more than 200 deals with Domo Everywhere, with over 10 of them north of $100,000, and two of them that were seven-figure contracts. So now let me talk about some of the Q4 business highlights. Q4 was driven by continued strong customer count growth, significant new wins, and continued expansion with existing customers. One highlight was a seven-figure upsell at a global health enterprise for company-wide analytics to help improve the patient experience. We won this deal because we were able to solve their data integration issues and get the right data to the right people across the organization better and faster than any other solution they looked at. Before Domo, this process of getting the right data together and making it actionable used to take them weeks every time they wanted to run the data. Now with Domo, it takes seconds. Another highlight was a seven-figure deal with a partner that is bringing next-generation health products to market with Domo's intelligent apps. Additionally, in the public sector, we also signed a state expansion worth more than $500,000 to provide analytics around vaccine distribution. We're proud of the value we've delivered to state governments, which has also resulted in expansions outside of COVID use cases. We had significant new logo wins as well. We won a new $500,000 plus ACV deal with a leading omni-channel retailer. Domo was chosen after a POC to support their CEO's goal of creating a more data-driven and action-oriented culture. Domo won because we demonstrated the record speed at which we could deliver self-service insights to decision makers across their entire company, to support a more agile business. Additionally, we won a new logo deal with a Fortune 500 restaurant corporation. We won this deal online and offline sales data across dozens of point of sale systems, from tens of thousands of franchises, to deliver uniform analytics, visibility, and transparency across all their brands, geographies, and segments. We won this contract with the support of a C-level executive's prior experience with Domo at one of the nation's largest media groups. Now let me talk about some of our plans for the upcoming year. We've executed well over the last 12 months. Now that we're in a much better financial position, we're able to think about how to invest for growth. Let me tell you, I'm very excited to finally start playing offense. We've been playing defense for the last few years, and now we get to really focus on playing offense. We'll do it diligently and responsibly, but it's a mindset shift, and we're very excited about it. We are looking to accelerate our long-term sustainable growth. The progress we've made across the board over the past year gives me confidence in the investments we're making. So let me share with you some of these investments. We've been hiring salespeople over the past several months and plan to increase our sales capacity to support at least 20% longer-term growth just to start. As we've been growing faster and we have aspirations to grow much faster than that, we are also investing in sales enablement and customer success initiatives to drive customer satisfaction, retention, renewals, and new business. We've also made some key leadership hires we believe will help us accelerate some very important initiatives for us this year. First, Vita Shannon joins us from KPMG and Oracle to lead our partnership and ecosystem efforts. Also, Shelley Morrison has joined us to run our demand center, bringing her expertise in leading global demand programs for companies such as Adobe, Amazon, and SAP while she was at Accenture Interactive. I'll close with some of our recent industry recognition and company progress, as I think they speak to our relevance and our commitment to our mission of transforming the way businesses manage with modern BI for all. As mentioned earlier, Domo was named a challenger in the 2021 Gartner Magic Quadrant for analytics and business intelligence platforms. We feel this signals a strong product market fit for our solution and validates the investments we've made to deliver end-to-end BI capabilities that help companies accelerate their digital transformation initiatives. Domo was also named a multiple category winner in the Dresner Advisory Services 2020 Technology Innovation Awards for being a top-ranked solution in multiple market reports throughout the year. Domo was also honored as a 2020 to 2021 best cloud business intelligence for analytics solution by the cloud awards. As you saw yesterday in our announcement with Snowflake, Frank and I announced the advancements in the Snowflake-Domo partnership, where we've achieved Premiere status in Snowflake's Partner Connect program, and on the product front, a native integration that allows Snowflake customers to better leverage their data that's in Snowflake. You'll hear more product news like this at Domopalooza later this month. On another front, we are very proud to be a strong corporate citizen in our community. Locally, we've led out on a number of DEI initiatives, and more globally, the parity pledge that I helped found with Cathrin Stickney to achieve gender parity at the highest levels of leadership has now been taken by close to 500 companies, representing more than 1 million employees on six continents. Of everyone I've recruited to our board, a full 50% of them are women. This past year, in addition to the parity pledge for just the senior levels of leadership, we extended that pledge to every position that we hire in the company. We created a second parity pledge for ethnic diversity and are now interviewing a broader slate of diverse hires for every single position that we hire in Domo. With great effort and also with great pride in the second half of the year, women and underrepresented minorities represented almost 40% of our new hires. In closing, I'm thrilled with our Q4 and full year results, and incredibly proud of the progress we've made across the board over the past year. I'm thrilled to be playing offense. This is where things get fun, and I'm excited about that. I feel great about our position heading into fiscal year '22, and I certainly look forward to updating you as we execute against our plan. We're hosting our Annual User Conference Domo Domopalooza, March 24. We will be virtual again this year. I look forward to sharing more about our vision of modern BI for all, and exciting product news that will continue to deliver on this vision. And with that, I will now turn the time over to Bruce. Bruce?
Bruce Felt, CFO
Thank you, Josh. We had a strong Q4, and I'm pleased with our execution throughout fiscal year '21. I'll review the detailed financial performance and then discuss first quarter and fiscal 2022 full year guidance. Our Q4 billings of $82.8 million, a year-over-year increase of 28%, was driven by strong new customer account growth, upsells and expansion, and high retention rate, with gross retention approaching 90%. We continue to invest in retention, as a long-term target is 90% or better. Net retention remained above 100%. At the same time, our billing term strengthened even against the backdrop of pandemic-driven challenges in some segments of our customer base. We have 62% of our customers under multi-year contracts at the end of Q4. Our remaining performance obligations or RPO grew 21% compared to the same quarter last year. Current RPO, or RPO expected to be recognized as revenue over the next 12 months, grew 23% year-over-year. Q4 total revenue was $56.8 million, a year-over-year increase of 23%. Subscription revenue grew 26% year-over-year and represented 88% of total revenue as we continue to focus on our recurring revenue. International revenue in the quarter represented 24% of total revenue, consistent with Q3. Our subscription gross margin was 82%, up more than 5 percentage points from 77% in Q4 of last year, and up over 1 percentage point from last quarter. We continue to be successful managing our data center costs, even as volumes increase. In Q4, operating expenses decreased by 5% from last year, even though revenue increased by 23%. The net effect of increased revenue while managing costs was an improvement in our operating margin of 33 percentage points from the same quarter last year. Our net loss was $9.8 million, and our net loss per share was $0.32. This is based on 30.2 million weighted average shares outstanding, basic and diluted. In Q4, we reported cash flow from operations of $3.5 million. No adjustment was necessary for an employee stock purchase plan, an improvement of $2.1 million over the last quarter. In fact, we generated $2.1 million of free cash flow this quarter. This performance contributed to our cash balance increasing by $7 million this quarter to approximately $91 million. Now to discuss what we expect in Q1 and the full-year, FY '22. For Q1, we're expecting billings of about $54 million, up to 16% year-over-year. Note that this guidance is facing a tough comparison, as Q1 of last year included $6 million of billings from three COVID-related data deals we closed. For the current fiscal year, we expect billings growth of about 16% year-over-year. Now, let me explain some of the thought process behind the 16% growth guidance. As mentioned in the previous quarter, we have been building our sales capacity and we are continuing to build our sales capacity going into fiscal year '22. The goal is to build enough capacity to support sustainable 20% plus longer-term growth. We have aggressive short-term hiring goals. Our experience has shown that hiring at these levels can cause productivity of the onboarded reps to decline. We have modeled in a decline. But if we are able to maintain our productivity rate through the onboarding process, we have upside to the guidance. Similarly, we don't factor in a large contribution from new reps in our model, as it takes time to hire, onboard, and ramp new reps. However, we have early hiring and onboarding success that could provide upside as well. Partnerships is another area of focus and possible upside. As Josh mentioned, we have hired a new head of partnership. We had meaningful help on new business from partners in fiscal year '21. We intend to put even more focus behind this effort in fiscal year '22, as we view this as a significant longer-term growth driver. On expenses, we're planning for Q1 operating expenses to increase from Q4 levels, primarily due to the investment in sales capacity, hosting our annual user conference, and higher payroll-related expenses in Q1. For the year, we're also expecting operating expenses to increase, with the largest increase in sales and marketing as we invest in our growth initiatives. We expect Q1 and full-year adjusted net cash provided by operations to be slightly positive throughout the year. Now the formal guidance: for the first quarter of fiscal '22, we expect GAAP revenue to be in the range of $56.5 million to $57.5 million. We expect non-GAAP net loss per share basic and diluted of $0.43 to $0.47. That's the same as 31.1 million weighted average shares outstanding, basic and diluted. For the full year of fiscal '22, we expect GAAP revenue to be in the range of $240 million to $245 million, representing year-over-year growth of 14% to 17%. We expect a non-GAAP net loss per share basic and diluted of $1.53 to $1.63, it's the same 32.2 million weighted average shares outstanding, basic and diluted. In closing, we're pleased with our execution in Q4 and are optimistic about our financial position and growth opportunities ahead of us.
Operator, Operator
Our first question comes from Sanjit Singh with Morgan Stanley. Your line is open.
Sanjit Singh, Analyst
Thank you for taking the questions, and congrats to the entire Domo team. A pretty incredible year, so congrats. My question is, I guess for Bruce, I appreciate that the context around the guidance. I wanted to introduce a couple of elements to help understand the guidance for next year. So, one, the soft impact from like the sort of COVID, command center; how much of a tough compare to that represent? Two, if you could comment on the renewal base next year. Is the renewal base larger going into next year versus last year on a year-over-year basis? The third element is your view on the spending environment. What's the underlying assumption there? How about looking Q4? And what's the assumption on the spending environment as we progress throughout the year?
Bruce Felt, CFO
Sure. Regarding the impact of COVID on our Q1, we definitely face a challenge due to $6 million in invoices and $2.5 million in recurring revenue, which totals $6 million that was driven by COVID, linked to three significant deals. We fully expect to achieve those figures, but we need to secure an additional $6 million to maintain our growth rate. This creates a comparison point for Q1. As for the renewal base, it is indeed higher this year. This reflects the typical SaaS model where annual recurring revenue is generated, additional recurring revenue is added, churn is considered, and the renewal base is established. The renewal base has certainly increased compared to last year thanks to the new recurring revenue generated this year. In terms of the spending environment, we still observe challenges from some of our customers in the affected industries, particularly brick-and-mortar retail, transportation, and hospitality. However, we've had some success with these customers because they needed data to understand how COVID affected their businesses. Our ability to scale quickly and distribute data via the cloud made us a preferred vendor, as customers could not afford to wait for data in traditional ways. This is where Domo excels. We keep an eye on market trends and believe that the combination of stimulus measures and vaccinations will foster optimism within the business community. I'm looking forward to what we hope will be a much more favorable business environment next year. We did not incorporate this optimism into our projections, but the indicators seem to suggest positive developments ahead, and we hope it unfolds as expected.
Sanjit Singh, Analyst
Great. No, I appreciate the thoughts there, Bruce. And then Josh for you, maybe comment on like, partnership. Starting with Snowflake, for instance, and it doesn't endorse a press release for anybody. That was certainly nice to see that. Maybe talk about what the team is building with Snowflake? And to what extent do you think that will help you serve as an entry point to what's a pretty fast-growing Snowflake customer base to help serve out some of their data to those business users and those customers? What's sort of the roadmap for Snowflake? And if you want to comment on the broader partner strategy, feel free to do so as well.
Josh James, CEO
Yes. This definitely was a breakout year for us in terms of partnerships. It's been a multiyear effort in trying to find the right relationships and how we fit into the ecosystem most effectively with the other players. Snowflake has been a really healthy relationship. We sat down with them early on, I sat down with Frank, and he laid out a blueprint for things that we could do that would be differentiated in the marketplace. We did some of those things at the very beginning gates with the sales organization, and it's helped us with our deals, especially where Snowflake is already installed, or someone's making a Snowflake purchase. There were other things they asked us to do that would truly be differentiated. Some of that relates to being able to take that data that's in Snowflake, but then also take our entire back end and have it run on Snowflake. It's all still in the cloud, but it's all in Snowflake. Our entire back end can be in Snowflake, and that's something that really helps the relationship that they have with their customers and increases the speed. It certainly increases the reliance that those customers have on both us and Snowflake, in a world where CIOs are trying to figure out how to make sense of the 10 partners that want to be their data platform. It's been a healthy relationship, and I think Frank appreciates what we've done relative to the strategy that he laid out in that meeting. We are appreciative of him for being on that press release and helping us go to market. I think broadly speaking with partners, while we were on this call and we pre-recorded with COVID, being able to be in the same room, we pre-record our prepared remarks. While those prepared remarks were being read, I got a text message from one of our partners who just got a big opportunity with a federal deal. Having that breakout year that we had, we went from essentially zero in partnerships to having about $10 million or so in new deals that came through partners this year, and hoping to see what that turns into next year. We have really great relationships that have brought us new revenue and new logos and certainly want to improve on that this year.
Sanjit Singh, Analyst
Great. I appreciate the thoughts, Josh, and congrats for the year.
Operator, Operator
Our next question comes from Derrick Wood with Cowen. Your line is open.
Derrick Wood, Analyst
Thanks. Hats off to you guys for just an incredible transformative year and exiting the year with 26% subscription growth. Pretty impressive to see.
Josh James, CEO
Thank you.
Derrick Wood, Analyst
So Josh, I'll start with you. And so you've made this pivot to be more interoperable with the analytics ecosystem, like what you're doing with Snowflake and cloud data warehousing. But I'm curious when it comes to selling your whole platform and kind of giving companies a single vendor serving many analytic needs. Where are you seeing demand for that? Is that more on the commercial and international markets? Do you see enterprise opportunities as well? How do you balance the opportunities between the capstone approach and the full platform approach?
Josh James, CEO
That's a great question. Thank you for asking that. It's something that I've mentioned it a few other investor conferences, and I think it's really important that our investors understand. We have a full end-to-end full stack because our enterprise customers have asked us for it. Almost every feature that we have come from big enterprise customers asking for it. They don't come to us at the beginning, saying, we want a full stack purchase; let's rip and replace 19 different things here. That's not how the relationship works. It's important that we keep repeating the messaging that we are BI leverage at cloud scale, in record time. That leverage, if it's a small commercial company, yes, it can be the full stack. If it's a large enterprise customer, we can evolve and grow with you. Many customers come back to us and say, I thought I was purchasing some visualization for some executives that we needed to get information to. Here we are a year later, and we have more data in Domo than we do in our own data warehouse, more than we do in our data lake. They see this evolution within their organization and how they just trust us more, and more. They start to look beyond just that initial capstone or initial contract. We see more and more upsells. We're going to continue to go straight up the middle. We'll keep offering the full stack. But these new logo relationships, where we'll go in with one solution, we'll go in with part of the stack. We're more than happy to do that. It's BI leverage; whatever you have, we can help make it faster. We can help get you a lot more data; we can turn it mobile for all the data you have in your organization; and we can help you connect to things you're not connected to right now because we have 1,000 connectors. A lot of opportunities and we can get in there and get started in a variety of ways and then evolve with that customer over time.
Derrick Wood, Analyst
That's great. Maybe one for Bruce. It sounds like it was another strong quarter of customer generation. Last quarter, you called out 50% growth. Anything to call out this quarter in Q4? I know it may be early, but when you look at the strength in new customer activity. Are they going small and expanding bigger in the upcoming year? Or do they look more like they went big out of the gate and so less expansion? Just curious how you're thinking about that cohort and how meaningful they could be in terms of expansion next year.
Bruce Felt, CFO
Yes. In terms of the first part of the question, this has just been a strong new logo year. We had an incredible number of new customers, more than I've seen certainly since we've been public and before then. That was very promising. Almost every customer, even small ones, almost have an endless opportunity for us to provide solutions to them where they could just keep generating business for us. The one thing I'll point out is we basically focused more on getting new customers and less on the dollars. So, the average deal size went down. But that's not a reflection of the opportunity. Every one of these customers is typically set up for an upsell on day one.
Josh James, CEO
I would add that, that's one of the things we’ve seen with relationships with our customers. We will have other very large companies in the ecosystem approach us and say we should partner together and bring a joint solution and jointly try to be their data architecture of record that they can evolve with for the long haul. It's interesting because we built these relationships out, we start getting brought into new customers that weren't ours before, and you're able to increase your new logos. That's also how acquisition conversations certainly start. I'm always open to conversation but don't expect a strong acquisition premium unless you're building relationships with big companies. That’s a really important component of all these conversations.
Derrick Wood, Analyst
Well, it sounds like you had a big breakthrough in market awareness this past year. So thanks for the color. Well done.
Bruce Felt, CFO
Thanks.
Operator, Operator
Our next question comes from Pat Walravens with JMP. Your line is open.
Pat Walravens, Analyst
Oh, great. Let me add my congratulations. How great the billings kept accelerating. Alright, Josh, you opened the door, so I’m going to step through it. Under what circumstances would this business be sold?
Josh James, CEO
I don't think anything has changed in terms of my perspective. Whenever you receive an offer where someone is prepared to pay for your future efforts, it's essential to evaluate it and discuss it with your board to determine what's best for the shareholders. I didn't intend to sell Omniture, but the offer I received seemed to be in the best interest of the shareholders. The same applies here; while I would enjoy doing this for a long time, my priority is winning. I definitely do not want to settle for second place. If someone is willing to pay for the future potential, that's a worthwhile discussion. If that seems like a path to accelerate progress and ensure that our team and customers have positive experiences, then it's something we need to consider. However, we're not actively looking to sell, and the business is not for sale, but I'm open to discussions.
Pat Walravens, Analyst
Alright, great. Thank you.
Operator, Operator
Our next question comes from Jennifer Lowe with UBS. Your line is open.
Jennifer Lowe, Analyst
Great. Thank you. I’ll echo the congratulations on the quarter and a strong finish to the year. Maybe just starting with some of the investments and the shift into offense mode. It sounds like in terms of getting the sales capacity up, you're looking to be front-loaded on that. So maybe two questions. One, is it reasonable to think that you've identified candidates at this point? Or are you still in the recruiting process? Two, let's say, six months down the road, everything is going as well as hoped, if not better, as the inclination and revenues are ahead, with inclination to continue to hire at that pace, or let it digest for a bit? How would you think about a scenario like that?
Josh James, CEO
Yes, that's a great question, and that's definitely what we're focused on. I appreciate the nice comments at the beginning. I hope they make it into the report as well. We’ve been really successful so far. We challenged the team, especially as it looked like we were doing well at the end of last year, to get these recruits on board as soon as possible. We need them to have a chance to add value this year. We’ve already identified and hired a couple dozen. We’re excited about it. The management team in sales is doing a fantastic job. It’s way more interesting and fun to be focused on offense than to figure out who needs to be stacked ranked.
Bruce Felt, CFO
We want to see how this first batch of hiring goes. But if we do see success, we're going to keep going. Now being cash flow-positive, we feel we can afford it. We have not been in that position since we went public. We don’t know yet for sure. I would love to set up a nice growth profile for next year.
Jennifer Lowe, Analyst
Great. And maybe just one more for me. If you look at where those investments are going specifically, you've got this great enterprise sales motion; you've also had a lot of flow business on the corporate side. Is it going to be evenly distributed across those cohorts? Or is there a particular focus in where the sales are going to go?
Bruce Felt, CFO
I would say it's across the board.
Josh James, CEO
Absolutely, we haven’t been especially successful in the $1 billion to $5 billion revenue range. We have plenty of customers over $5 billion, and plenty of customers under $1 billion. We’ve taken some of our better reps and focused on that segment starting last year, and have started to make progress there. We think there's an opportunity because there are a lot of companies in that space that need our product. We've been successful at servicing customers that size. We think that's an opportunity. But certainly, more in the corporate and enterprise business and more strategic. We had a little bit of pause in Asia-PAC, but now we’re ramping that back up, and we’re starting to see the performance metrics we need to see.
Jennifer Lowe, Analyst
Great. Thank you.
Operator, Operator
Our next question comes from Jack Andrews with Needham. Your line is open.
Jack Andrews, Analyst
Thanks for taking the questions. And I'll add my congratulations on all the progress you've achieved thus far. Just continuing with the theme of moving to offense. Josh, you talked a lot about what's happening on the sales side. I was wondering if you could just talk about maybe some of the product advancements that you're looking to make to your portfolio, as you think about offense on more of the product side of things.
Josh James, CEO
Yes, for sure. It’s across everything. It's across HR and what everyone in HR is doing this year compared to what they were doing last year. We went through a critical task last year, making sure that we did our due diligence in helping those we had to let go. HR is focused on figuring out who our top performers are, what kind of training can we get them, where are the opportunities to promote additional people, and how can we improve our diversity. From a product perspective, we’ve settled with a product that customers do not complain about. There aren’t any complaints that I can think of. We've been blessed with a fantastic team. From the perspective of growth, we will continue to evaluate opportunities that could drive more revenue and cross-sell opportunities. We just haven’t been able to even think about that as much. If we had all of our salespeople armed with additional products with a value of $100,000 or $200,000 a year, who wouldn't buy that? There are a lot of opportunities like that that we’re evaluating. We have several been in beta internally at Domo that we are just getting ready to bring to market this year.
Jack Andrews, Analyst
Thanks. I appreciate the commentary on that. Just as a quick follow-up question for Bruce. I just want to ensure we get maybe an update in terms of your view of multiyear contracts. I think you've mentioned you've reached the 62% threshold now. Are you actively looking to steer customers towards more multiyear contracts? Or are you effectively agnostic on that front?
Bruce Felt, CFO
No, we very much like multiyear contracts. The average has been 18 to 20 months. We'd like to get it to 36 months. It's good for us and the customer. The larger customers tend to want to lock in price. We incentivize our sales force to get multiyear contracts. We’ve been making that evolution for the past couple of years, and we want to keep doing that.
Jack Andrews, Analyst
Got it. Thanks and congrats again.
Bruce Felt, CFO
Great. Thank you, everybody.
Operator, Operator
There are no further questions at this time. This concludes today's conference. You may now disconnect.