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Amid slow growth, Josh James back as Domo CEO
With revenue at a standstill over the past three months and little growth projected for the next three, the vendor's founder is back in his old role, with growth as his main goal.
Josh James is once again the CEO of Domo.
In March 2022, in concert with its fiscal fourth quarter and year-end 2021 earnings report, the analytics vendor revealed that James, its founder and CEO, was stepping down after 12 years. John Mellor, who had been Domo's chief strategy officer since 2019, was appointed James' replacement.
Now, nearly a year to the day James stepped down and Mellor took his place -- again on the same day as its fiscal fourth quarter and year-end quarter earnings call -- Domo on Monday disclosed that Mellor stepped down and James is back in his previous leadership role.
In addition, in a further shakeup of Domo's executive suite, David Jolley was named chief financial officer after spending 25 years at Ernst & Young, Jeff Skousen was promoted to chief revenue officer, and Dan Strong and Renee Soto are now part of the vendor's board of directors.
Domo did not respond to a request for comment on Mellor's resignation and the reappointment of James as CEO.
However, in his opening comments during the earnings call after being reintroduced as CEO, James alluded to the company's growth. A recent lack thereof -- along with a sharp decline in Domo's stock price -- may help explain why Mellor decided to step down after just one year and James was tapped to return, according to Doug Henschen, an analyst at Constellation Research.
Doug HenschenAnalyst, Constellation Research
"Mellor took the reins at a tough time," he said. "The economic outlook and stock prices have generally worsened over the last year, and buying cycles have only lengthened."
Domo's fourth-quarter 2023 revenue of $79.6 million was up 14% over the fourth quarter of fiscal 2022, and full-year 2023 revenue of $308.6 million represented a 20% increase over the previous year.
However, an increased year-over-year, fourth-quarter revenue of $79.6 million was essentially the same as third-quarter revenue of $79.0 million. And looking ahead, Domo projects revenue to total $78.5 million to $79.5 million during the first quarter of fiscal 2024, essentially representing zero revenue growth over a six-month period.
In addition, fourth-quarter 2023 billings were down 3% compared with the fourth quarter of 2022.
Not surprisingly, Domo's stock price has struggled amid slow growth. The vendor's stock opened trading on Wednesday at $13.26 per share, down significantly from its 52-week high of $57.41 and barely above its 52-week low of $11.35.
Domo is not alone among tech companies that have seen their stock prices plummet over the past year, but the declines of other publicly traded data and analytics vendors like Alteryx and MicroStrategy have been far less precipitous.
That said, James immediately spoke about growth when taking over Domo's earnings call from Mellor.
During its final year under James' leadership in fiscal 2022, total revenue increased 23%, including identical 23% year-over-year growth during the fourth quarter. In addition, subscription revenue -- key for a cloud-native vendor -- represented 86% of total revenue during James' last year and was up 21% over fiscal 2021.
In addition, in its most recent years with James as CEO, Domo launched platform improvements including new collaborative development capabilities and a streamlined version of its embedded analytics suite of tools.
"As I'm sitting here reflecting on the quarter, I'm looking forward to getting Domo back to being a high-growth company," he said.
And James may have the right personality to restore Domo's growth trajectory, said David Menninger, an analyst at Ventana Research.
James' unique outlook helped Domo differentiate from peers such as Qlik, Sisense and Tibco during his first tenure, and his leadership style could benefit the vendor going forward in a competitive market and amid trying economic times for tech companies.
"James' leadership style is somewhat unconventional, and that may be appropriate for Domo's positioning," Menninger said. "The company is not trying to be like every other business intelligence and analytics company. Having a leader that looks at the market a little differently can help create some unique positioning and differentiation in a crowded market."
James' return a bit of a surprise
Though not with Domo from March 2, 2022 through March 6, 2023, James retained 10% of the company's stock, according to wallstreetzen.com.
As a result of James' continued involvement as a significant owner of Domo, his return as CEO is not completely startling.
"I had not heard any rumblings [about a return], but I'm not at all surprised that James is back," Henschen said. "He has a big stake in the company, both personally and financially."
He added that by leaving Domo for a year and then coming back, James may bring renewed vigor to the role as well as a new perspective.
"There's no doubt that James brings a lot of passion and experience to the role, and he has a vested stake in the company's success," he said. "Sometimes, if you step away for a time you can come back and see things with fresh eyes. That's the whole idea of a sabbatical, and too few individuals and industries build that concept into their career development paths."
Like Henschen, Menninger said he did not know James' return to Domo was imminent.
"I had not heard any rumors," he said. "It was a surprise to me."
However, he noted that while not a common practice, CEOs sometimes leave their company and then return. One prominent example of a founder and CEO who left their company and then returned is Steve Jobs of Apple.
Jobs co-founded the tech giant and helped lead the company from 1976-1985. He then returned in 1997 and remained CEO until his death in 2011.
"Steve Jobs was invited back -- not necessarily quickly -- and I think most would agree his return was quite successful," Menninger said.
Eric Avidon is a senior news writer for TechTarget Editorial and is a journalist with more than 25 years of experience. He covers analytics and data management.