DOMO (DOMO) risk factors, FY2026 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. 05A strategic transaction, whether or not consummated, could have an adverse effect on our business, results of operations and financial conditionNew
6. 06Future operating results and key metrics may fluctuate significantly due to a wide range of factors, which makes our future results difficult to predict
7. 07Because 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
8. 08The 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
9. 09Increased 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
10. 10Our credit facility contains restrictive and financial covenants that may limit our operating flexibility
11. 11We 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
12. 12Changes 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 business43% rewritten
13. 13We 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
14. 14Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations
15. 15Adverse events or perceptions affecting the financial services industry could adversely affect our operating results, financial condition and prospects45% rewritten

Risks Related to Our Relationships with Customers and Third Parties

1. 16If 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 harmed60% rewritten
2. 17result, we may be unable to attract new customers at rates or on terms that would be favorable or comparable to prior periods, which could negatively affect the growth of our revenueNew
3. 18If 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
4. 19If 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
5. 20The 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
6. 21If we are unable to develop and maintain successful relationships with channel partners, our business, operating results, and financial condition could be adversely affected
7. 22Contractual disputes with our customers could be costly, time-consuming and harm our reputation

Risks Related to Our Products, Solutions and Industry

1. 23We 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 share56% rewritten
2. 24pressures. Even if we are successful in acquiring and retaining customers, those customers may continue to use our competitors' products in addition to our productsNew
3. 25We continue to evolve our subscription and pricing models and changes could adversely affect our operating results
4. 26If 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
5. 27Because 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 so58% rewritten
6. 28Artificial Intelligence Policy Act, which, among other things, imposes disclosure requirements on entities using generative artificial intelligence with customers, and other similar regulatory schemes enacted by other states in the United StatesNew
7. 29We 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
8. 30If we fail to meet our service level commitments, our business, results of operations and financial condition could be adversely affected
9. 31If our or our customers' access to data becomes limited, our business, results of operations and financial condition may be adversely affected
10. 32Our business depends on continued and unimpeded access to the internet and mobile networks
11. 33Incorrect 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
12. 34Our 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. 35If we fail to effectively align, develop and expand our sales and marketing capabilities with our pricing structure and increase sales efficiency, our ability to increase our customer base and increase acceptance of our platform could be harmed
2. 36We 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. 37We have experienced and may continue to experience changes to our management and board, which may create uncertainties and could harm our business30% rewritten
4. 38If we are unable to attract, integrate and retain additional qualified personnel, including top technical talent, our business could be adversely affected25% rewritten
5. 39If we fail to offer high-quality professional services and support, our business and reputation may suffer
6. 40Catastrophic 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. 41Our long-term growth may depend in part on being able to expand internationally on a profitable basis
8. 42Future 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. 43Future acquisitions could disrupt our business and adversely affect our operating results, financial condition and cash flows
10. 44Governmental export or import controls could limit our ability to compete in foreign markets and subject us to liability if we violate them
11. 45Failure 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. 46are launched against a target, we and our third-party service providers may be unable to anticipate these techniques or vulnerabilities or implement adequate preventative measures. We and our third-party service providers may also experience security breaches and incidents that remain undetected for an extended periodNew
2. 47Real or perceived errors, failures, or bugs in our platform could adversely affect our operating results and growth prospects
3. 48Interruptions or performance problems associated with our technology and infrastructure may adversely affect our business and operating results68% rewritten
4. 49traffic increases. If our platform is unavailable or if users are unable to access our platform within a reasonable amount of time, or at all, our business will be harmedNew

Risks Related to Our Intellectual Property

1. 50Our 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. 51If our brand promotion activities are not successful, our operating results and growth may be harmed
3. 52Third-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. 53Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses
5. 54The 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. 55The 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. 56We 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. 57We 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. 58Our reported financial results may be harmed by changes in the accounting principles generally accepted in the United States
2. 59As 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. 60The market price of our Class B common stock may be volatile, and the value of your investment could decline significantly
4. 61If 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. 62Future sales of our Class B common stock in the public market could cause our stock price to fall
6. 63Anti-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. 64Economic uncertainties or downturns could materially adversely affect our business88% rewritten