Domo delivered rocky second quarter earnings on Thursday and the stock was shellacked on Friday falling about 36%. The gist of the drubbing was that second quarter billings missed expectations and Domo struggled to land large enterprise deals. Joshua James, CEO of Domo, said the analytics space remains hot, but large companies aren't in a hurry to buy when strategic vendors are merging.
The enterprise deals just didn't close when we wanted them to close. We still think that many of them are going to close, but they just pushed. And that -- all those acquisitions taking place at the same time in a matter of weeks didn't help in terms of having a clean environment and definitely caused some questions and conversations that needed to be had. But I do think that over the midterm, over the short term even, over the next few quarters, it is going to be a positive impact for us because not everyone feels the same about Google as they might have felt about Looker independently. And I'm sure Google can get some business because they have Looker as well for some people that are hard-core Google.
But there are just a lot more pieces to the ecosystem and a lot more people that were partners with Looker and partners with Tableau that don't feel strongly about Google and Salesforce. And so I think there's a real opportunity for us to jump in there, and we're already seeing that. We've already seen transactions with new partners that we've signed over the last quarter where we're influencing deals for them. They're influencing deals for us.
In other words, Domo can do fine as a Switzerland neutral party analytics play, but it can be caught in the wake of large players. Domo has suites available for retail, marketing, IoT, media and data science.
Domo reported second quarter non-GAAP earnings of 96 cents a share on revenue of $41.7 million, up 22% from a year ago. Billings were $38.8 million, up 9%. Domo has partnered with Amazon Web Services and Zendesk in the quarter.
For the third quarter, Domo projected revenue of $41.5 million to $42.5 million with a non-GAAP loss of $1 to $1.04 a share. For fiscal 2020, revenue will be in the range of $168 million to $169 million with a non-GAAP loss of $4 a share to $4.10 a share. Both projections missed expectations. For instance, Wall Street was expecting fiscal 2020 revenue of $173.6 million.
JMP Securities analyst Patrick Walravens summed up the Domo conundrum.
While Domo is struggling to define its place in the rapidly changing analytics world, we maintain our rating because we think: 1) it has a beautifully designed, cloud based, mobile-first business analytics solution; 2) it has a deep moat in terms of its 500+ connectors that are akin to a MuleSoft offering; 3) the acquisition of Tableau for nearly 10x revenue and Looker at ~20x revenue illustrates the value of assets in this space; 4) despite a big billings miss, the company is maintaining reasonable expense control; and 5) the valuation and expectations remain relatively low.
What remains to be seen is whether Domo has a sales process that scales into the future. Domo has been chasing large enterprise deals, but that turned out to be a distraction with landing smaller companies. Domo is now shifting sales focus to smaller companies that have a shorter selling cycle.