What Happened?
Shares of data visualization and business intelligence company Domo (NASDAQ: DOMO) jumped 31.1% in the afternoon session after the company reported an impressive "beat and raise" quarter. First quarter 2025 results blew past analysts' EBITDA and earnings estimates while sales were in line.
However, full year sales outlook was slightly lifted. Notably, operating margin turned positive, and the company maintained positive free cash flows during the quarter. Investors may also take note of the 24% rise in remaining performance obligations, a sign that demand is not just holding up but strengthening. Zooming out, we think this quarter featured some important positives.
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What The Market Is Telling Us
Domo’s shares are very volatile and have had 26 moves greater than 5% over the last year. But moves this big are rare even for Domo and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 28 days ago when the stock gained 5.8% on the news that stocks extended their rebound, led by strong gains in the technology sector, as renewed optimism surrounding U.S.–China trade negotiations lifted investor sentiment.
Contributing to the bullish tone was a standout earnings report from enterprise software leader ServiceNow, which topped Wall Street's expectations on RPO, profit and earnings. More importantly, the company's remaining performance obligations (RPO), a key forward-looking metric for future revenue, gave investors confidence that enterprise customers were not pulling back spending amidst uncertain macro.
This optimism was further reinforced by solid results from Texas Instruments and Lam Research. Their performance was especially encouraging for semiconductor stocks, which had been under pressure due to their exposure to global trade tensions. These earnings results suggested that, despite macroeconomic uncertainties, demand in key tech verticals remained resilient.
Domo is up 57.8% since the beginning of the year, and at $11.19 per share, has set a new 52-week high. Investors who bought $1,000 worth of Domo’s shares 5 years ago would now be looking at an investment worth $447.22.
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