DOMO (DOMO) risk factors, FY2025 10-K

Risks Related to Our Financial Position and Capital Needs

1. 01We have a history of losses, and we may not be able to generate sufficient revenue to achieve or maintain profitability in the future
2. 02We have been growing and expect to continue to invest in our growth for the foreseeable future. If we fail to manage this growth effectively, our business and operating results will be adversely affected
3. 03These activities will require significant financial resources and allocation of valuable management and employee resources, and growth will continue to place significant demands on management and our operational and financial infrastructure
4. 04Our ability to raise capital in the future may be limited, and if we fail to raise capital when needed in the future, we could be prevented from growing or could be forced to delay or eliminate product development efforts or other operations
5. 05Future operating results and key metrics may fluctuate significantly due to a wide range of factors, which makes our future results difficult to predict
6. 06Because we recognize revenue from subscriptions ratably over the terms of our subscription agreements, near-term changes in sales may not be reflected immediately in our operating results
7. 07The length, cost and uncertainty associated with sales cycles for enterprise customers may result in fluctuations in our operating results and our failure to achieve the expectations of investors
8. 08Increased sales to customers outside the United States or paid for in currency other than the U.S. dollar exposes us to potential currency exchange losses
9. 09Our credit facility contains restrictive and financial covenants that may limit our operating flexibility
10. 10We may be subject to additional obligations to collect and remit sales tax and other taxes, and we may be subject to tax liability for past transactions, which could harm our business
11. 11Changes in tax laws or regulations that are applied adversely to us or our customers could increase the costs of our platform and adversely impact our business
12. 12We are a multinational organization faced with increasingly complex tax issues in many jurisdictions, and we could be obligated to pay additional taxes in various jurisdictions
13. 13Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations
14. 14Adverse events or perceptions affecting the financial services industry could adversely affect our operating results, financial condition and prospects

Risks Related to Our Relationships with Customers and Third Parties

1. 15If we are unable to attract new customers in a manner that is cost-effective, our revenue growth could be slower than we expect and our business may be harmed
2. 16If customers do not renew their contracts with us or reduce their use of our platform, our revenue will decline and our operating results and financial condition may be adversely affected
3. 17If customers do not expand their use of our platform or adopt additional use cases, our growth prospects, operating results and financial condition may be adversely affected
4. 18The loss of one or more of our key customers, or a failure to renew our subscription agreements with one or more of our key customers, could negatively affect our ability to market our platform
5. 19If we are unable to develop and maintain successful relationships with channel partners, our business, operating results, and financial condition could be adversely affected
6. 20Contractual disputes with our customers could be costly, time-consuming and harm our reputation

Risks Related to Our Products and Solutions

1. 21We face intense competition, and we may not be able to compete effectively, which could reduce demand for our platform and adversely affect our business, growth, revenue and market share
2. 22We continue to evolve our subscription and pricing models and changes could adversely affect our operating results
3. 23If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards and changing customer needs or requirements, our solutions may become less competitive
4. 24Because our platform is designed to operate on and with a variety of systems, we will need to continuously modify and enhance our platform to keep pace with changes in technology, and we may fail to do so
5. 25We may not timely and effectively scale our existing technology, including our computing architecture, to meet the performance and other requirements placed on our systems, which could increase expenditures unexpectedly and create risk of outages and other performance and quality of service issues for our customers
6. 26If we fail to meet our service level commitments, our business, results of operations and financial condition could be adversely affected
7. 27If our or our customers' access to data becomes limited, our business, results of operations and financial condition may be adversely affected
8. 28Our business depends on continued and unimpeded access to the internet and mobile networks
9. 29Incorrect or improper implementation or use of our platform could result in customer dissatisfaction and negatively affect our business, results of operations, financial condition, and growth prospects
10. 30Our use of “open source” software could negatively affect our ability to offer our platform and subject us to possible litigation

Risks Related to Our Personnel and Operations

1. 31If we fail to effectively align, develop and expand our sales and marketing capabilities with our new pricing structure and increase sales efficiency, our ability to increase our customer base and increase acceptance of our platform could be harmed
2. 32We may in the future become subject to litigation or claims arising in or outside the ordinary course of business that could negatively affect our business operations and financial condition, including securities class actions and shareholder derivative actions, both of which are typically expensive to defend
3. 33We have experienced changes to our management and board, which creates uncertainties and could harm our business
4. 34If we are unable to attract, integrate and retain additional qualified personnel, including top technical talent, our business could be adversely affected
5. 35If we fail to offer high-quality professional services and support, our business and reputation may suffer
6. 36Catastrophic events may disrupt our business and impair our ability to provide our platform to customers, resulting in costs for remediation, customer dissatisfaction, and other business or financial losses
7. 37Our long-term growth may depend in part on being able to expand internationally on a profitable basis
8. 38Future changes in the regulations and laws of the United States, or those of the international markets in which we do business, could harm our business
9. 39Future acquisitions could disrupt our business and adversely affect our operating results, financial condition and cash flows
10. 40Governmental export or import controls could limit our ability to compete in foreign markets and subject us to liability if we violate them
11. 41Failure to comply with anti-bribery, anti-corruption, and anti-money laundering laws could subject us to penalties and other adverse consequences

Risks Related to Privacy and Cybersecurity

1. 42Real or perceived errors, failures, or bugs in our platform could adversely affect our operating results and growth prospects
2. 43Interruptions or performance problems associated with our technology and infrastructure may adversely affect our business and operating results

Risks Related to Our Intellectual Property

1. 44Our business is highly dependent upon our brand recognition and reputation, and the failure to maintain or enhance our brand recognition or reputation would likely adversely affect our business and operating results
2. 45If our brand promotion activities are not successful, our operating results and growth may be harmed
3. 46Third-party claims that we are infringing or otherwise violating the intellectual property rights of others, whether successful or not, could subject us to costly and time-consuming litigation or require us to obtain expensive licenses, and our business could be harmed
4. 47Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses
5. 48The success of our business depends in part on our ability to protect and enforce our intellectual property rights

Risks Related to Our Corporate Governance

1. 49The dual class structure of our common stock has the effect of concentrating voting control with Joshua G. James, our founder and chief executive officer, which will limit your ability to influence the outcome of important transactions, including a change in control
2. 50We are a "controlled company" within the meaning of Nasdaq rules, and as a result may choose to rely on exemptions from certain corporate governance requirements
3. 51We cannot predict the impact our dual class structure may have on our stock price or our business

Risks Related to Our Financial Reporting and Disclosure

1. 52Our reported financial results may be harmed by changes in the accounting principles generally accepted in the United States
2. 53As a public company, we have incurred and will continue to incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting requirements
3. 54The market price of our Class B common stock may be volatile, and the value of your investment could decline significantly
4. 55If securities or industry analysts do not publish research reports about our business, or if they issue an adverse opinion about our business, our stock price and trading volume could decline
5. 56Future sales of our Class B common stock in the public market could cause our stock price to fall
6. 57Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us difficult, limit attempts by our stockholders to replace or remove our current management and limit our stock price
7. 58Economic uncertainties or downturns could materially adversely affect our business
8. 59between Israel and Hamas) and terrorist attacks, whether in the United States, Europe, the Asia Pacific region or elsewhere, could cause a decrease in business investments, including corporate spending on business intelligence software in general and negatively affect the rate of growth of our business