Shares of Domo (DOMO 4.60%) surged as much as 24.8% higher on Friday morning following the cloud-based business intelligence specialist's first earnings report as a public company. After hitting that high around 10:40 a.m. EDT, Domo's stock cooled down to a 7% gain near noon.
In the second quarter of Domo's fiscal year 2019, sales rose 32% year over year to land at $34.3 million. Adjusted net losses stopped at $3.44 per share, compared to a $25.77 loss per share in the same period of last year.
Your average analyst would have settled for a loss of $3.95 per share on revenue near $32 million, so Domo beat Wall Street on both counts.
Looking ahead, Domo's management expects third-quarter revenue in the neighborhood of $35 million and a net loss of roughly $1.38 per share. The current analyst view calls for a loss of approximately $1.45 per share on top-line revenue around $33 million.
Domo CEO Josh James has an ambitious view of his company's addressable market.
"Because Domo can digitally connect any organization and empower each of its employees, we believe our market potential is every working person with a mobile device," he said in a prepared statement. "The IPO has given us the capital needed to successfully execute our business plan."
That being said, Domo is a very young stock with the usual battery of volatility boosters: Investors and analysts don't really know the company yet, its sales tend to be lumpy, and it's hard to pin a fair value on a company with negative earnings and cash flows. It's probably best to watch Domo from the sidelines until the wild swings start to settle down.