Domo, Inc. (DOMO) Q4 2021 Earnings Call Transcript

Domo, Inc. (DOMO 0.27%)
Q4 2021 Earnings Call
Mar 11, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Domo fourth-quarter fiscal-year 2021 earnings call. [Operator instructions] Please be advised that today's conference is being recorded. [Operator instructions] And with that, I will hand the call over to Peter Lowry, Domo's vice president of investor relations.

Peter Lowry -- Vice President, 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 onto the call. Julie?

Julie Kehoe -- Chief Communications Officer

Thanks, Pete. Our press release was issued after the market close and is posted in 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 security 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, the impact of COVID-19 on our business, and our financial condition. These statements are subject to a variety of risks, uncertainties, and assumptions.

For a discussion of these risks and uncertainties, please refer to 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 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 measures. With that, let me hand it over to Josh. Over to you, Josh.

Josh James -- Founder and Chief Executive Office

Well, thank you, Julie, and hello, everyone. Thanks for joining us on the call today. I hope that everyone and their 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 really the decade of work from so many people. Q4 capped the tremendous four quarters from 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 that demand for modern BI has accelerated. And 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. And by the way, we delivered that solution for them in less than 60 days. And these examples are becoming more and more normal.

Just last week, a CIO customer proactively reached out to us to let us know how ecstatic they are with Domo. They're innovating at 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 to numbers, Domo is helping this company bringing together 143 cloud data connections across 17 different salesforce orgs, creating over 7 million rows of data, representing over $170 million in insurance premium. And 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. And building 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. And finally, we've dramatically improved our analyst rankings.

So for instance, Domo moves into the Challenger quadrant in the ever-important 2021 Gartner Magic Quadrant for Analytics and Business Intelligence Platforms. Now, 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 confidence to put data to work at scale in record time across the entire business. Now, this improved ranking in the Gartner Magic Quadrant will certainly have an impact on our business. Given our 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 our sales force productivity have significantly improved, resulting, of course, 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 creating new revenue streams by monetizing data that they already have.

And we have a very strong pipeline of Domo Everywhere deals heading into FY '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 companywide 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 solutions 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 want to run the data, and now, with Domo, 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 omnichannel 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 based on our ability to merge online and off-line sales data across dozens of point-of-sale systems from tens of thousands of franchises to deliver uniform analytics, visibility, and transparency across all of their brands, all of their geographies, and all of their 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. And now that we're in a much better financial position, we are able to think about how to invest for growth.

And let me tell you, I'm very excited to be able 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. We'll do it responsibly.

But it's a mindset shift, and we're very excited about it. We are looking to accelerate our long-term sustainable growth, and 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. Hiring.

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 the sales enablement and customer success initiatives to drive customer satisfaction, force 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 business is managed with modern BI for all. As mentioned earlier, Domo was named a Challenger in the 2021 Gartner Magic Quadrant for Analytics and Business Intelligent 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 the 2020 to 2021 Best Cloud Business Intelligence for Analytics Solution by The Cloud Awards. And as you saw yesterday in our announcement with Snowflake, Frank and I announced the advancements in the Snowflake-Domo partnership, where we've achieved Premier 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 let out on a number of DEI initiatives. And more globally, the ParityPledge that I helped found with Catherine Stickney to achieve gender parity at the highest levels of leadership has now been taken by close to 500 companies that represent more than 1 million employees on six continents. And also of everyone I've recruited to our board, a full 50% of them are women.

This past year, in addition to the ParityPledge for just the senior levels of leadership, we extended that ParityPledge out to every position that we hire in the company, and then we created a second ParityPledge for ethnic diversity and are now interviewing a broader slate of diverse hires for every single position that we hire in Domo. So of course, not by chance, 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. So in closing, I'm thrilled with our Q4 and full-year results. I'm incredibly proud of the progress we've made across the board over the past year, and I'm thrilled to be playing offense.

This is when things get fun, and I'm so excited about that. I feel great about how we're positioned 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, Domopalooza, at March 24. We'll be virtual again this year, and I look forward to sharing more about our vision of modern BI for all and exciting product news that we'll continue to deliver on this vision.

And with that, I will now turn the time over to the Bruce. Bruce?

Bruce Felt -- Chief Financial Officer

Thank you, Josh. We had a strong Q4, and I'm pleased with our execution throughout fiscal-year '21. I'll review the details behind the 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 count growth, upsells and expansion, and high retention rates, with gross retention approaching 90%, and we continue to invest in retention as our long-term target is 90% or better.

Net retention remained above 100%. At the same time, our billings terms 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 obligation, 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 cost 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 as no adjustment was necessary for an employee stock purchase plan, an improvement of $2.1 million over 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 16% year over year. Note that this guidance is against a tough compare as Q1 of last year included $6 million of billings from three COVID-related state 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, and our experience has shown that hiring at these levels caused this productivity of the onboarded reps to decline. We have modeled in a decline, but if we are able to maintain our productivity rates 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, if 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, and we intend to put even more focus beyond 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 increasing from Q4 levels, primarily as we invest in sales capacity, host our annual user conference, and have 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. This assumes 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 non-GAAP net loss per share, basic and diluted, of $1.53 to $1.63.

This assumes 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. With that, we'll open up the call for questions. Operator?

Questions & Answers:

Operator

[Operator instructions] Our first question comes from Sanjit Singh with Morgan Stanley. Your line is open.

Sanjit Singh -- Morgan Stanley -- Analyst

Thank you for taking the questions and congrats to the entire Domo team. A pretty incredible year, so congrats on that. My question is, I guess, for Bruce. I appreciate the context around the guidance.

I wanted to introduce a couple of elements to help understand the guidance for next year. So one, the sort of impact from like the sort of COVID command center apps, like how much of a tough compare does 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? And then the third element is your view on the spending environment. What's the underlying assumption there? How did that look in Q4? And what's the assumption on the spending environment as we progress throughout the year?

Bruce Felt -- Chief Financial Officer

Sure. So on the COVID-related one and specifically for the comment about Q1, we definitely have headwinds in Q1 just because we had the $6 million of invoicing, $4.5 million recurring, $6 million in the total. That was COVID-driven. that was the three state deals.

So we fully expect that to be zero, but we have to get $6 million more to keep the growth rate going. So that's a tough compare in Q1. On the renewal base -- and it really applies to the whole year when you think about it because we had quite a bit of COVID-specific deals throughout the year. The good news is we actually see some of that continuing.

So that kind of mitigates full-year kind of tough compare. We're able to help people roll out vaccines, for example. On the renewal base, I mean, the base is certainly higher this year. I mean, it's the classic as we're -- beginning ARR, add a new recurring, factor in the churn, then you have your kind of ending renewal base.

But yes, the renewal base is definitely much higher than last year because you're able to add to it the new recurring revenue that was generated this year or, in our case, really the new recurring -- or the new ARR, I guess, we'll call it. So that's true. And then on the spending environment, generally speaking, I mean, the difficulty that -- we still see difficulty for some of our customers who are still in challenged industries and haven't quite churned yet, brick-and-mortar retail, certainly transportation, hospitality, just more generally. We did, however, have some success of those customers simply because they just have to get to the data to understand the vaccination of COVID on their own business.

And because we can move so fast at scale and we can be distributed quickly and in the cloud, we were a preferred vendor. And people aren't just going to wait in line with the old-fashioned way to get data. They really have to cut through that. That's what Domo does.

And obviously, we read the newspapers the same as you that the stimulus plus the vaccinations, we think, will bring optimism to the business community and very much look forward to it. What we hope is a much more robust environment next year. We didn't really factor that into our numbers, I would say. But I mean, everything seems to be pointing that way, and we certainly hope it plays out well.

Sanjit Singh -- Morgan Stanley -- Analyst

Great. I appreciate the thoughts there, Bruce. And then, Josh, maybe comment on like partnership, starting with Snowflake. Frank Slootman doesn't endorse a press release for everybody.

And so that was certainly nice to see. Maybe talk about what the team is building with Snowflake. And then to what extent do you think that will help you sort of as an entry point to the 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 road map for Snowflake? And if you want to comment on the broader part of your strategy, feel free to do so as well.

Josh James -- Founder and Chief Executive Office

Yes. I mean, this definitely was a breakout year for us in terms of partners this year. It's been a multi-year 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 basically laid out a blueprint for things that we could do that would be differentiated in the marketplace. And we did some of those things at the very beginning with the sales organization. And it's helped us with our deals, especially where Snowflake is already installed over someone making a Snowflake purchase.

And then there were other things that they asked us to do that truly would be differentiated, and 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. And so 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. It increases the speed, and 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.

So it's been a healthy relationship, and I think Frank appreciated what we've done relative to the strategy that he laid out in that meeting, and so we were certainly appreciative of him being on that press release and helping us go to market. And I think broadly speaking with partners -- in fact, while we were on this call and we prerecord -- with COVID now, being able to be in the same room, we prerecord our prepared remarks. And while those prepared remarks were being read, I got a text message from one of our partners. We just got a big opportunity with the federal deal.

And so having that breakout year that we had where we went from basically 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, but we have great relationships that have brought us new revenue and new logos and certainly want to improve on that this year.

Sanjit Singh -- Morgan Stanley -- Analyst

Appreciate the color. Thank you.

Operator

Our next question comes from Derrick Wood with Cowen. Your line is open.

Derrick Wood -- Cowen and Company -- Analyst

Thanks. Hats off to you guys for just an incredible transformative year and exiting the year with 26% subscription growth, very impressive to see. So, Josh, I'll start with you. And so you 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, and I think you mentioned some on the call, where are you seeing demand for that? Is that more in the commercial and international markets? Do you see enterprise opportunities as well? I mean, how do you balance the opportunities between the capstone approach and the full-platform approach?

Josh James -- Founder and Chief Executive Office

That's a great question. Thank you for asking that. It's something that I've mentioned in a few of the 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 came from big enterprise customers asking for it. But you're right. They don't come to us at the beginning saying, "We want to a full-stack purchase. Let's rip and replace 19 different things that we have here." That's not how the relationship works, and that's why I think it's important that we keep on repeating the messaging that we are BI leverage at cloud scale in record time.

And that leverage, to your point, if it's a small commercial company customer, yes, it can be the full stack. If it's a large enterprise customer, basically what we can go to them and say is, "We can evolve and grow with you. We can be your data platform." And we have many customers that will come back to us and be like, "I thought it was just purchasing some visualization for some executives that we needed to get information to. And 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." And that's when they see this evolution with their organization and how they just trust us more and more, they really start to look beyond just that initial capstone or that initial contract, and that's where we see more and more upsells.

And so we're going to continue to go straight down the middle, straight up the middle. We'll keep going there. 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 a 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 get it in people's fingertips. We can turn it mobile for all the data that you have in your organization.

We can help you connect to things that you're not connected to right now because we have 1,000 connectors. So it's really something that we can get in there and get started in a variety of ways, and then you evolve with that customer over time.

Derrick Wood -- Cowen and Company -- 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? And then I know it may be early, but like when you look at the strength in new customer activity, are they going -- they start small, and they're going to expand bigger in the upcoming year. 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 -- Chief Financial Officer

Yeah. In terms of the first part of the question, this is just a strong new logo here. I mean, we added an incredible number -- or more customers than I've seen, well, certainly since we've been public and before that. So that was very promising.

And we like it because almost every customer, even small ones, somewhat have an endless -- it's almost an endless opportunity for us to provide solutions to them where they just keep generating business for us. I mean, the one thing I'll point out is we basically focus more on getting new customers and less on the dollars. So the average deal size went down, but I don't think that really is -- but that's not a reflection of -- the opportunity still exists, and it's going to go down by much. So every one of these customers is usually -- well, now almost all of them, just by the way we sell our product, is pretty much set up for an upsell on day 1.

And we've been tweaking our pricing. We've been tweaking our messaging.

Josh James -- Founder and Chief Executive Office

And, Bruce, I would add that that's one of the things that we've seen with -- because we've been evolving these relationships with our customers, we will have other very large companies in the ecosystem approach us and say, "Hey, with this large company that we're really involved with, 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. And so that's interesting in terms of you build these relationships out. You start getting brought in from new customers that were customers of yours before that and are able to increase new logos. And then it's kind of funny, but that's also how acquisition conversations certainly start.

And we get overtures all the time. And I always welcome the overtures, and I'm always open to a conversation. But you're not going to get a real strong acquisition premium unless you're building relationships with big companies because those things don't just happen overnight in places where there's no relationship, at least not if you want to get the right price for your shareholders. So I think that's a really important component of all these conversations as well, is just making sure that people know you're open to building out your ecosystem and your relationships because you never know what's going to happen over the long haul.

And I think that's been -- I guess it's fun to be recognized as an important part of the ecosystem with some of these really big customers that we have because it shows you that the big companies are hearing our name, and they're being told if they wanted to be more successful at that customer, then they need to integrate well with us. And so we're seeing a little bit of the power changing to our side as well, which is a great reward for us.

Derrick Wood -- Cowen and Company -- Analyst

Yeah. Well, it sounds like you had a big breakthrough in market awareness this past year. So thanks for the color. Well done.

Josh James -- Founder and Chief Executive Office

Thanks.

Operator

Our next question comes from Pat Walravens with JMP. Your line is open.

Pat Walravens -- JMP Securities -- Analyst

Great. And let me add my congratulations. It's great how the billings kept accelerating. All right.

Josh, you opened the door, so I'm going to step through it. Under what circumstances would this business be sold?

Josh James -- Founder and Chief Executive Office

I don't think it's -- nothing has changed in terms of -- I tried to say it many times, but it's just -- anytime you get an offer where someone's willing to pay you for your future efforts, then that's something that you have to evaluate and bring to your board and have conversations about what's the right thing for the shareholders. So I didn't want to sell Omniture, but I got an offer that felt like it was the right thing for the shareholders, and it was the right value relative to the risk/reward that we were presented with at that point in time. And I think the same things here. Of course, I'd love to do this for a long time.

It's fun. But the most important thing to me is winning, for sure, by far. Like I do not really want to play second place and be stuck there for a while. That sounds stupid.

So we want to keep on trying to win. If someone's willing to pay for those future out years, then great. That's a real conversation to have. If it feels like that's a way to accelerate things and make sure that you're winning, your people, they have great experiences with great customers, then that's something I think you have responsibility to.

But we're not looking to sell. It's not for sale, but I'm definitely always open to having conversations.

Pat Walravens -- JMP Securities -- Analyst

All right great. Thank you.

Operator

Our next question comes from Jennifer Lowe with UBS. Your line is open.

Jennifer Lowe -- UBS -- Analyst

Great. Thank you and I'll echo the congratulations on the quarter and the strong finish to the year. Maybe just starting with some of the investments and the shift into offense mode. It sounds like you're -- 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 kind of identified candidates at this point? Or people have actually come onboard? Or is it still sort of in the recruiting process? And two, let's say six months down the road, everything is going as well as hoped, if not better, the inclination in revenues are coming in ahead, billings are coming in ahead, would the inclination be to kind of continue to hire at that pace or let it sort of digest for a bit? I know it's hard to know what the future holds, but how would you think about a scenario like that? Is it put more money in or kind of let it jell before taking the next plug?

Josh James -- Founder and Chief Executive Office

Yeah. That's a great question, and that's definitely what we're focused on. And I appreciate the nice comments at the beginning, Jennifer, and hopefully, they make them to the report as well. I'm waiting for that massive overweight from Jennifer now I know we've reached mecca.

But I think the call about the question of hiring, that's definitely right on, and we have been really successful so far. We really challenged the team, especially as it looked like we were doing well at the end of last year. Like let's get these recruits onboard. Let's get them on board ASAP because if we want them to have a chance at really adding value and adding revenue this quarter -- I mean, sorry, this year, then we've got to get them on in Q1.

And that doesn't mean they're going to have an impact, but it means they have a chance. And so we've already identified and hired a couple of dozen. And so that's been something that we're really excited about and really proud of that management team in sales. They're just all doing a fantastic job in HR and everyone that's been -- it's kind of Student Body Right.

Here's a new thing we need to focus on. And like I've been saying, it's offense, and that's so much more fun than who do we need to stack rank and figure out that maybe shouldn't be here. It's just so much more interesting and so much more fun. You're excited when you wake up.

And so I think we're making some good success there. I don't know, Bruce, if you want to add any color.

Bruce Felt -- Chief Financial Officer

Well, I'll just add -- first off, I'll reiterate your comment about Jennifer. But I'll also add that if we do see success in the first batch, we're going to keep going. And what's nice about now being cash flow positive, we feel like we can afford it. And we have not been in that position since we went public.

So we don't know that for sure. We want to see how this first batch of hiring goes. But I would love to just keep it going and, therefore, kind of set up a nice growth profile for next year.

Jennifer Lowe -- UBS -- 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 sort of evenly distributed across those cohorts? Or is there a particular focus in where the sales are going to go? Just anything there would be great. Thank you.

Bruce Felt -- Chief Financial Officer

Yes, it's a process --

Josh James -- Founder and Chief Executive Office

What I was going to add is just that one area that we haven't been as successful is that -- it doesn't make sense to us, so we haven't been successful there, have been the companies kind of in that $1 billion to $5 billion revenue range. We have plenty of customers over $5 billion, and we have plenty of customers under $1 billion. And that $1 billion to $5 billion, we've taken some of our better reps and have them focus on that section starting with last year and started to make some good progress there. So hopefully, we'll be able to continue that progress and then double down because there's a lot of companies in that space that need our products.

And we've been successful at servicing customers of that size. So we think that's an opportunity. But certainly, more in the corporate and enterprise business, more in strategic. We had a little bit of a pause in Asia Pac for a while, but now we're ramping that back up, and we're starting to see the performance metrics that we need to see.

I mean, performance metrics last year were really strong. We don't need stronger performance on a program basis. I'm sure we'll increase their quotas, but we don't need stronger performance on a per-rep basis. So I think there's still a lot of opportunity in Europe.

We've closed some really big deals over there. So we've got great lighthouse customers. And same holds true for Japan. I mean, Japan, geez, you can go look at the top couple of hundred companies, and the penetration that we have there is dramatically outsized relative to the size of business that we have.

So there's a huge opportunity there for us as well.

Jennifer Lowe -- UBS -- Analyst

Great. Thank you.

Operator

Our next question comes from Jack Andrews with Needham. Your line is open.

Jack Andrews -- Needham & Company -- 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 the product side of things.

Josh James -- Founder and Chief Executive Office

Yeah, for sure. And really, I mean, it's across everything. When you think about HR and what everyone in HR is doing this year compared to what they were doing in Q1 and Q2 of last year, I mean, we went through -- the most important task that I gave HR last year was everyone that we had to let go of, making sure that we're doing everything that we can to help them get jobs into -- we paid recruiters to place them, and that's what we were focused on. That's not helping drive the business.

It was the right thing to do, but it's not helping to drive our business. So it's defense. And now HR is trying to figure out like who are the top-performing people, what kind of training can we get them, where are the opportunities to promote additional people that are here, how can we improve our diversity so that we are even more qualified to talk to customers. And then from a product perspective, you look at, OK, we've kind of settled with a product that customers do not complain about.

Like, there's hardly any -- I would say there hasn't been any, but there's hardly any, if any at all, customers that have quit paying us and didn't renew because of a product issue. We're blessed with a fantastic team, and that doesn't happen. And so being able to take that team focused on offense and say, "Hey, what are other things that we can do to increase revenue, to increase cross-sells, to increase upsells? What are new products that we can bring to bear that leverage the platform that we have?" Because one thing that is very unique about us, I don't think there's another company in the world that has as much data at any of the customers that we're at, where that company knows what all of data is. And our machines know what that data is, too.

So we know what their sales are. We know how many employees they have. We know what is converting well. All of that data is sitting there just ready to have AI and predictive applied to it or another app that pulls that information out and presents it in a way that helps them run their business more efficiently and effectively.

I was talking to a customer yesterday who said that they just spent a bunch of money on diversity and inclusion, and they were challenged -- they were going to pay a couple of million bucks to solve the problem. And our customer raised his hand and said, "I think I can do this with Domo." And everything that that customer needed that they pay -- they literally were going to pay. They were about to close a $2 million deal. Everything that they needed, he was able to do in two weeks, two weeks with Domo.

And that's without us having a diversity and inclusion offering because we're already connected to the data. And that's what he said. He said, "I think Domo has all the connectors that we need for all of those Oracle things that we're going to query. Let me see what I can put together and if I can build the app that you guys want to see." And so we built a really rudimentary app in two weeks and saved them $2 million.

So what if we went to market with the diversity and inclusion app because we know it connects to everything, and we brought some best practices to bear. Should we do that? I don't know. There's lots of opportunities like that, but we haven't been able to even think about that. But if we have, and all my salespeople are armed with an additional product to go to market with that they can go and sell as an upgrade for $100,000, $200,000 a year, who wouldn't buy that? So there's a lot of opportunities like that that we just continue to evaluate.

We've had several of them that have been in beta internally at Domo that we are just getting ready to bring to the market, and we hope that we're able to do that this year.

Jack Andrews -- Needham & Company -- Analyst

Thanks. Really appreciate the commentary around that. Just as a quick follow-up question for Bruce. I just wanted to make sure we get maybe an update in terms of your view of multi-year contracts.

I think you mentioned you reached the 62% threshold now. Are you actively looking to steer customers toward more multi-year contracts, or are you effectively agnostic on that front?

Bruce Felt -- Chief Financial Officer

No, we very much like multi-year contracts. The average has been 18 months, 20 months. We'd like to get it to 36 months. We think it's good for us and we think it's good for the customer.

I mean, particularly the larger customers and the ones that are betting on us, they tend to want to go ahead and lock in price. But we incentivize our sales force to get multi-year contracts. We've been making that evolution for the last couple of years, and we want to keep doing that. It's just good for the business, and I think it's good for our customers, too.

Jack Andrews -- Needham & Company -- Analyst

Thanks and congrats again.

Bruce Felt -- Chief Financial Officer

Yeah, thanks a lot.

Operator

Thank you. [Operator instructions] Our next question comes from Kamil Mielczarek from William Blair. Your line is open.

Kamil Mielczarek -- William Blair & Company -- Analyst

Hi. Thanks for taking my question and congratulations on the great end of the year. I just wanted to start by touching on competition. Because Domo addresses so many layers of the stack, I mean, it's somewhat unique in its ability to provide this comprehensive end-to-end solution.

Can you maybe tell us on who are some of the companies that you see as your biggest threats over the coming years? And in recent months, have you seen any changes to the competitive environment?

Josh James -- Founder and Chief Executive Office

I mean, we certainly hear Tableau has always been there. Power BI has always been there. I'm sure both of them will continue to be there. I think ThoughtSpot and Sisense have done a really nice job building their businesses and being relevant in their own unique ways.

And so those are the companies that we see, but it's not usually in head-to-head situations necessarily, just other people that are making noise in contracts. I mean, I'm sure the majority of our customers have purchased stuff from everybody. So it just shows kind of the real opportunity that we have. And I think one of the things that's exciting is the apps that we have, and that's where we don't compete with anybody.

We're in an account and we're just sitting there, talking to them about a solution, we like to call them the apps that fill in the gaps. So when they have a need and they don't know where to get it and they have to go outside, they have someone do that for them to have some kind of consulting relationship or they're getting custom software. And we can put together an app in a couple of weeks, charge 10% or 20% or 30% of the contract in services and then get a renewable $100,000, $200,000 contract for an app that we just configured. That's really exciting.

And it's fun because I got a notification on Domo last night, and I looked at it, and it was this enterprise customer that continues to buy apps from us. And they bought another one last night. So I texted our Head of Enterprise and Jim Kowalski. And I said, "Who are these guys? Like what are they doing? They keep buying more apps." He's like, "Oh, yes, they've already bought five, and they're going to buy two more." And those are places -- those are things that we're doing that it's not competitive in the slightest, and we're offering a great value to our customer and making great money off of it.

So it's truly a win-win, and it's just leveraging this amazing platform that our people have built.

Kamil Mielczarek -- William Blair & Company -- Analyst

That's great color, Josh. Thank you. And just as a quick follow-up, how much of your recent margin improvements are attributable to factors like working from home and travel? And as we look out for the next one to two years and specifically in fiscal '22 as you try to continue to expand margins while growing revenue, how much of a headwind will that return in G&A expense would be to investments back into the business as we get to a more normalized environment? Thanks.

Josh James -- Founder and Chief Executive Office

Well, we didn't save any money on T&E because Bruce already made us all pay for travel out of our own pockets. So that was just kind of a company policy that he instituted, right, Bruce?

Bruce Felt -- Chief Financial Officer

Yeah. And I think we're going to keep it because it's working.

Josh James -- Founder and Chief Executive Office

Now for the real answer, Bruce?

Bruce Felt -- Chief Financial Officer

Yeah. Well, I don't know that we really have a lot of -- it's really T&E savings, and I'm not sure we can just jump back to normal anytime soon. So I don't really see a headwind there. And I think we just overall still have a lot of leverage opportunities within our cost structure.

If we can keep growing the business at our goal of 20% plus, we don't have that expenses grow at the same way. And I don't see a step function just because we'll get back to normal.

Josh James -- Founder and Chief Executive Office

Gross margin is just one area, right, Bruce? I mean, gross margin, I had a conversation with Bruce in three, four years ago when we were talking about what gross margins you get to. And I was definitely wrong, and he was definitely right. I didn't imagine it getting to these levels. So it's an awesome thing to see what the team has done there, just finding more and more efficiencies, what the finance team has done with really driving the right kind of relationships with our vendors.

But yes, there's definitely more opportunities to squeeze and get more juice out of this thing, for sure, from a cost perspective and efficiency perspective.

Kamil Mielczarek -- William Blair & Company -- Analyst

That's great to hear. And thanks again and congrats.

Josh James -- Founder and Chief Executive Office

Thank you.

Operator

There are no further questions at this time. [Operator signoff]

Bruce Felt -- Chief Financial Officer

Great. Thank you, everybody.

Duration: 58 minutes

Call participants:

Peter Lowry -- Vice President, Investor Relations

Julie Kehoe -- Chief Communications Officer

Josh James -- Founder and Chief Executive Office

Bruce Felt -- Chief Financial Officer

Sanjit Singh -- Morgan Stanley -- Analyst

Derrick Wood -- Cowen and Company -- Analyst

Pat Walravens -- JMP Securities -- Analyst

Jennifer Lowe -- UBS -- Analyst

Jack Andrews -- Needham & Company -- Analyst

Kamil Mielczarek -- William Blair & Company -- Analyst

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