Hey, Josh, we're good to go.
All right, great. Thank you everyone for being here today. Let me start off by saying that I've been purchasing Domo stock, the last few days, and after the market closes, there's gonna be a filing showing the purchase of about 400,000 shares. I'm really excited to get deep back into the stock and obviously believe there's a lot of long-term value here. As I've been saying to a few investors, definitely seems like it's time to back up the truck, if I were an investor, and I am an investor, and that's what I'm doing. I think that Domo's really in a strong position for growth. I couldn't be more excited about and energized about returning as CEO.
It's clearly a challenging macro environment, and the growth we've delivered is not representative of our potential in the market. My number one goal is to get our growth back to where it should be, which we believe we can achieve. What's gonna bring us back to growth is a relentless focus on our customers, of course, and a motivated and aligned sales team and broader organization. Investing in our evolved brand gives us an impactful kickoff to this initiative. I also think there's a lot of potential upside in how we price, which we will talk about today. It's been a constructive month. The moment I hit the ground, I had an earnings call and a few investor conferences, and then immediately was on the road to spend time with some of our most important customers.
Last week, we held our annual user conference, Domopalooza, where we heard from many great customers such as Ford and UHG, TaylorMade, and Sephora. It was fun to hear from Angeline at Sephora, and I especially loved hearing what it's like when 1,800 of their employees come together around a single campaign tracker to make informed decisions across their entire business during big promotions. That's exactly the future we're building towards, and it's exciting to see its impact through our customers who are already embracing. We also heard from Sean, a scrap manager at Constellium, the global leader in aluminum recycling. He asked a simple question, "What if I could shave off a few minutes on every single truckload of aluminum scrap? How would that help the business?" Before Domo, it was just flat out unanswerable.
With just a couple of steps, he was able to light up a few connectors and find anomalies in dataset views. After doing a few more joins in Magic ETL, Sean was off to the races. He built an app that unlocked significant productivity gains for Constellium. Another story that inspires me is about Regional One Health, the oldest health system in Tennessee. They leveraged our data experience platform to remove bottlenecks across complex data systems that weren't even talking to each other. We're talking about legacy data sources, complex permissions, and billions of rows of data. Regional One tapped into the sophistication of our core infrastructure, the Domo Data Foundation, with thousands of connectors, Magic ETL, and our Adrenaline engine that helped make the dream of automation possible for them.
These data experiences helped them boost revenue, transform healthcare, and nurture a culture of curiosity that has reached nearly every corner of the organization. What makes our partnerships with these customers so strong is a shared focus on curating people-centric experiences. That's why we are proud to call Domo a data experience platform. I would say we feel much better positioned entering fiscal year 2024 than entering fiscal year 2023 from a go-to-market perspective. Our business is set up very well to start driving growth numbers we believe are possible through a mix of expansion within existing customers and attracting new ones. Our priority now is to educate. We want businesses to know the benefits of making data actionable across their entire organization.
For everyone, these benefits range from driving growth, to reducing costs, to helping people be more impactful. Our industry has been talking about digital transformation for more than 20- years. Like most of you, I've seen it firsthand. However, we believe digital transformation won't fulfill its promise until people are using data in ways that don't even have to think of it as BI. In fact, traditional BI is not going to solve the adoption challenge that exists inside organizations. If store managers or beauty advisors have to rely on analysts to get data, well, then we've failed. The future is to deliver new data experiences that work the way people do. That's why we love seeing so many of our customers embrace human-first experiences that deliver personalized insights in the context of each person's job.
Connect those insights to other internal systems, you turn passive data consumption into active. With efficiency that lets them multiply their impact faster, well, now you've got success. Beyond the value that customers are getting today, it's been great to see validation from industry analysts on the value that fully integrated stacks like Domo bring to IT teams, freeing them from the rut of technology management that is otherwise required to make well-governed data actionable. It's another example of how we make work more efficient and help everyone do more with less. What I really think points to the future is when I hear industry analysts talk about the rise of the composable enterprise, where modern systems are quickly configured to support a more agile data experience down to the team and individual level.
That is the digital transformation we at Domo are committed to building for our customers. Our App Framework is a prime example of how we're making that future a reality today. With drag and drop functionality, people across the business can compose these experiences through custom apps. The result is an army of citizen developers who can use their knowledge of the business to translate data into confident action, all while relieving the burden that traditional tech teams face. We have the technology we need to make digital transformation a reality, and the hurdle we are working on crushing is adoption. It's not enough to be digital on the outside and analog on the inside. Companies have millions of processes that are not modernized yet. They're slow and inefficient. They are costing organizations money.
As an example, our team recently worked with a group of ski resorts to centralize data about weather forecasts, reservations, lodging, and more into one predictive model that anticipates the number of ski visits by resort, by day, with fresh updates every hour. Making disparate data actionable is such a common business challenge, yet it's so solvable. In a case like this, it could pay off by informing everything from price modeling to advertising investments to staffing decisions. Today, the solution that we set out to create more than 10- years ago is becoming a primary ingredient in business performance, and we see opportunity everywhere for what we do. The barriers to digital transformation and growth are less about technology and more about a human's ability to use that technology in the context of their job.
Where Domo especially shines is making it as easy as running a business from your phone. The team has put together a great program for you this morning. You'll hear from our CMO Wendy Steinle, who I couldn't be more excited about, who will walk you through an evolution of our brand messaging. You'll hear from Jeff Skousen, our recently promoted Chief Revenue Officer, about the changes we have made in the sales organization. Although he's recently promoted, he's been here almost 13- years. Then you'll hear how fired up he and the sales team are entering fiscal year 2024. Then, of course, Ben Schein will outline some of the new product announcements we had at Domopalooza last week.
Lastly, David Jolley, our CFO, will give you some thoughts around our guidance, financial model, and how we are thinking about the business in terms of balancing our growth opportunity with the target of staying operating margin and operating cash flow positive for the year. Thank you for joining us today. It's been great to reconnect with many of you over the last few weeks, and I look forward to opportunities this year to connect in person. Until then, I'll now pass it over to Wendy.
Hi, everybody. Thank you so much for your time and for choosing to spend it with us today. I am going to share with you a couple of things in our go-to-market strategy, and I'm going to sort of peel back the covers a little, show you a little bit of the sausage making, because I want to start with our marketing strategy. Then I'm going to go into a little bit of a spotlight on the messaging, as Josh mentioned. Also I want to share with you what we've launched for community as well. Let me start first. I think a lot of times when people think of marketing, they think about the events team or digital marketing or just brand focus.
I really peel it much farther back to the boardroom table of that our objective is to drive ACV growth and support retention. Our objectives are exactly the same as the sales team's objectives and what the rest of our e-staff is going for. We're really focused on how do we help gain new customers, and then how do we retain and expand customers, because all of those things feed into growth and success. On the next slide, the stuff that people normally think of as marketing is our how we get that done. We think in terms of this full marketing to sales to satisfied customer journey.
We are full journey marketers here at Domo, meaning we start with the purpose of building brand perception and then feeding the funnel, accelerating the close, driving adoption and advocacy, and then supporting retention. This is a full, journey-focused team, and it's very much a win together effort. You know, marketing is not a standalone organization. We can't do what we do without deep ties and partnerships to the sales organization with, you know, coordination with the ADM team, alignment. You know, Jeff and I have been in tons of meetings on our plan of record. You know, how much does each creator group need to bring in? And, you know, what part of that is marketing, and what are the conversion rates we need and all of that. We have deep ties in order to drive this journey.
The next thing that we think about as we're forming our plan is really, what's the situation? What's the context in which we're operating? We look at what are our challenges. We look at, you know, shifts in the market. We look at what was working and what needs work. This is really what we've distilled for our plan for this year in terms of looking at the journey and what are those key challenges that also give us tremendous opportunity to succeed and get more and more efficient and effective. In the build brand area, it's really about awareness and understanding. We need to make sure that when our sellers are out there making phone calls and someone picks up, they say, "Oh, I've heard of Domo, and I understand what Domo does." That has been a real challenge for us.
The next on feeding the funnel, we recognize that the message and the motion to the corporate segment is different from enterprise segment. Their use cases may be same in terms of, you know, a marketing use case or a finance use case. The enterprise customers operate in a much bigger, you know, IT infrastructure environment in which we need to be a part. The messaging needs to be slightly different. Accelerating the close. You know, when we look back at the past year, we had a slight dip in the conversion rate after the pipeline is created. We have some really great insight into what we can do to help with that.
Especially in the enterprise space, we need to make better friends with IT, we need to talk about coexistence with other platforms and the value that we add on top of that. Driving adoption advocacy, community vibrance is critical here to helping people know how to use Domo, know what's possible with Domo, and really get to that point where they have clear value realization of their investment. Retaining the cross-sell and upsell, that's really about how do you add on and how do you create content and marketing campaigns that are synced with those sales motions.
Out of all of these, the two that I wanna dive into with you today are the market awareness through the messaging, which is the critical foundation, and then I wanna talk to you a little bit about what we just launched with community. Moving on to the next slide. The, before going into those details, let me tell you the anchor that everything hangs off of in terms of our strategy. This is the slide that is the actual strategy slide that the whole marketing team works from. We thought a lot about every one of these words. Reintroduce Domo as the bridge to exponential business impact backed by customer truth. Connect and stand out by making data human.
Part of what we're doing here is making sure the message turns the corner from the what to the why, and that's that impact piece. The making data human is so uniquely Domo because we are focused on really making data actionable for everyone. From a go-to-market perspective, you know, target personas and use cases, breaking down barriers with IT, I talked about. I'm gonna dive into the messaging, and then customers and conversations. We have such great stories and use cases of how our customers bring their mission to life and make it more effective by using Domo that we are lifting all of those things up. In everything we do, we use this lens of for real people, by real people.
That leads you down a thought process of, you know, how do I bring Domo forward as, like, a person that people trust because we believe that people buy from people they trust? How do we bring our engineers and our product managers forward into conversations? Lots of great things flow from this strategy. With that, let me dive into what you're gonna see from messaging. This is the base problem we have had. Domo does so much, it's hard to explain. Domo has been on a journey to try to nail this and really leverage what we do that is beyond traditional BI. You've seen messages in the past like modern BI for all or the business cloud, and lots of great messages to try to articulate that uniqueness.
On the next slide, you know, it's a good problem to have because we are so much more. We do so much more, and we know this because when we look at what our customers are using Domo to achieve, it's so far beyond just dashboards. It's the things that they're doing with us, you know, range into touching customers, touching partners, creating intranets, you know, solving massive challenges by bringing data together in a way that your business users can actually have the flexibility they need to ask really bold questions and get the answers in order to drive their business forward. Great problem to have. When we look at our objectives on the next slide for our update of the messaging, it's really this. Clarify the what of Domo. What is our category? Compel with why.
You know, why should people care? Stand out with the how. When we move forward on the next slide, Josh already declared this, but I want you to understand that we are a data experience platform. Now, we didn't set out to create a new category. We are setting out to explain what we do in a way that creates the space for our customers to think bigger about what's possible and to give us that expansiveness so that as we bring on even more ways to innovate, you know, today apps are kind of the top of that innovation scale. We can bring more things in here because we're focused on those data experiences, and we bring together the entire platform to make those possible.
If we move forward, I'm gonna read to you some of these core messaging that are now in our framework, you know, that we use in order to decide what to put in an ad, what to put on the website, and so on. Why we do what we do. Put data to work for everyone so they can multiply their impact on the business. Then we think about it in terms of these different personas too. Companies can foster a data-driven culture of curiosity that powers business impact. Business professionals can go from occasional data observers to business impact owners, and so IT can better support business needs for agile data access while maintaining security and governance. On the next slide, this is really, you know, our core positioning statement, the long version.
Bear with me, I'm gonna read it to you as well. If you want, just close your eyes and see how it lands with you. "Domo is a cloud-native data experience platform innovator that puts data to work for everyone. With dashboards and apps that go from easy self-service to custom pro code options, Domo delivers intuitive experiences underpinned by data science and a secure data foundation that connects with existing cloud and legacy systems. Domo is the first to finally unify IT's need for security and governance with business users' need for speed, visibility, and action.
With Domo, companies get agile data experiences that spark bold curiosity and power exponential business impact." You can see a lot of that put to work in the website, which was completely updated, and it's all in the Domopalooza content as well, if you haven't had a chance to watch that. What are people saying about this? This is just a snapshot of some of the quotations that came back when we shared the messaging in advance of Domopalooza with our CAB customers. It's also some of the things that the customers that we had on our industry analyst call, they said. As we presented this, the industry analyst said, "We wanna know what your customers think about this." They spoke up and shared these things about it's spot on, it resonates, it's exciting. They like the shift.
It really helps them think differently and describe what they see themselves doing. Getting the words right really helps expand the thinking of what's possible. The next thing that I wanna share with you is the launch of Domo Central. This is a new community hub experience, and the goal is really to bring together a single global customer-centric program where all of our passionate members get the enablement they need, they feel supported. They can also get recognized for their own contributions to the community as they invest and share their Domo skills with others. That was really the aim, is to bring together all of these kind of citizen-led groups that were already happening and give people a place, so that we can magnify the impact of all of those contributors in one place.
On the next slide, what we did launch was Domo Central, again, this unified digital hub. The idea is to bring together all of those different programs that we either have or are building into one unified place, so that people can, you know, self-serve and support each other in their own journey to get the most out of Domo for their own business impact and also their own career growth. What we had before was the Dojo, which was a discussion forum, and we've brought that in with all of these other pieces, the educational certification, access to live streamed events. You know, we had one recently on ChatGPT that was wildly, you know, busy with attendees. We're creating more user-generated content, which we know people wanna see.
We're doing a seed program with universities, and so on. We're really excited about laying the groundwork for building out this full Domo Central community. When we look at the next slide, again, how is this launch being received? It has been tremendous. I mean, to write a percen increase stat that is four digit, you know, almost seems wildly like, is that true? Well, it's absolutely true. The response so far in just one week has just been tremendous. We've really tapped an unmet need. Again, going back to our objective to create vibrancy to help drive that full marketing sales to satisfy customer journey, Domo Central is going to be a really big part of that moving forward. With that, thank you so much for your time to listen to some of this sausage-making, and I will pass it on.
Thank you, Wendy. Let me just say how much I enjoy working with Wendy. As you can see from her presentation, she is a true professional, and gives me so much confidence that she is leading the charge as our Chief Marketing Officer. We are very much aligned on our go-to-market messaging, and strategy, so excited to continue to work with her. For those of you who don't know me, my name is Jeff Skousen, Domo's Chief Revenue Officer. Josh mentioned, I've been here a long time. I've been a sales leader here at Domo since the very beginning, so coming up on 13- years now.
While I'm new to this role, I've been building, mentoring, and leading sales teams for my entire time here at Domo with great success and have the trust, confidence, and hearts of our sales team, which I think is really important. Let me start with an update on our sales force. Last year, we simply had too much disruption in how our sales force was structured, including quotas and our go-to-market strategy. At the same time, I feel the wrong message got out about our enterprise business, which is clearly an important part of our overall strategy and business. All of this led to a much higher attrition last year than we planned for. Sales turnover is an important factor in our model. Through the first two months of this fiscal year, I'm pleased to report that we've only managed out five reps with no regrettable attrition.
We are entering this fiscal year in a significantly more stable place than last year. We have aligned the sales force very closely to how we were structured when we were executing consistently well in FY 2021 and FY 2022. For example, we held our revenue kickoff meeting in early February, more than a month ahead of last year, and we rolled out territories and quotas six weeks ahead of last year. I can tell you the sales force is incredibly motivated to go execute against the targets we have assigned them this year. Another miss last year was that our model accounted for a significant portion of our new business coming from reps we plan to hire during the year, which presented risk. This year we have much less reliance on new reps in our model and more coming from ramping or fully ramped reps.
Overall, I feel much better about how we are positioned with the salesforce entering this year than I did last year, and I think the limited and planned attrition we have seen at the beginning of this year supports this. Another thing I'm really excited about is that I feel we have tighter alignment between sales and marketing than we've ever had. Our business depends on product-productive lead generation, particularly for our new corporate customers, and Wendy has been a great business partner. The top of funnel continues to expand and although deals are taking longer in this environment, we are generally not losing the deals, they are just taking longer. From a competitive standpoint, we continue to see mostly Power BI and Tableau, although I would definitely say we are seeing less Tableau over the past year.
We continue to be extremely differentiated in the market, and we win by solving problems our competitors simply can't. Let me talk a little bit about what I think would be what would be a great long-term and maybe relatively near short-term opportunity, which is the ability to provide access to Domo on a consumption pricing basis. We have over 100 customers that are currently on a consumption pricing model, which is about 5% of our customer base. We have been able to save many legacy-based licensing customers who were planning to cancel because they felt they weren't getting the value out of Domo. On the other hand, they feel the consumption pricing has a direct correlation between the price they are paying and the value they are receiving through adoption usage.
Our consumption-based pricing also makes expansion easier because the customer can start using all aspects of the Domo platform immediately, which is product-led growth, which is really exciting. Because everyone in the organization has a license, organic adoption happens without the need to directly sell all the individual features. This allows everyone in an organization, from the C-suite to IT, to the frontline worker, to have a unique data experience. We've been very deliberate and careful about how we've been rolling out consumption pricing. With almost a year's worth of data to evaluate, the results look very promising.
For example, we are seeing that with our consumption pricing, customers are expanding in areas like data science, whereas before they didn't even try data science because they either didn't know it existed in our platform or they weren't willing to pay for it up front before they tried it. In closing, last year was a challenging year for the business. We saw a lot of attrition and had to replace a lot of reps due to a misalignment in our sales strategy, comp plans, and go-to-market. This year we have rectified those issues. We have also put the proper management in place, so our rep-to-manager ratios are much better than they were a year ago, which we think could lead to faster ramped reps, more productivity for reps, and improved conversion ratios.
Lastly, sales are very aligned to product and marketing, the changes that we have made in those organizations. I'm very excited about this year and to lead the team to successfully meet our goals. With that, I'll turn it over to Ben to give a product update.
Thanks, Jeff. I'm really happy to be here. Again, Ben Schein, I'm SVP of Product, and Data Curiosity, which is what I've been doing mostly the last five years, was in a more of a thought leader and evangelist role. Now in January, took over as head of product, including product strategy, product management, UX, and a number of other functions. I also feel honored to work with Wendy and Jeff to take some of the vision of where we're going as a company and what our messaging is, as well as the signal we hear from community, and from Jeff and his fields teams to build a better product. I come to this as a practitioner.
I was a user and a creator of content and insight in Domo, when I worked at Target, and in the last five years up until this morning, I continue to generate, new content and use our product, and so that's some of the lens that I bring here. Just wanted to take a little bit of time to share, where we're going from a roadmap perspective, as well as highlight some of what we announced last week, and where we're taking the product.
If I think about that framing that Wendy had around this mission we have to make data work for everyone, to create these data experiences and ultimately to allow people to have impact on their business, a lot of how I look at our product and what I'm turning over to our customers is how do I reduce the friction, remove the friction from allowing that exponential impact to happen? Not just a little bit of impact, but exponential impact. The way that we think about our roadmap and what we're working on right now is around reducing friction in these five areas. Number one is how do we unlock new data? How do we create content with that data and enrich that data? How do we drive action from that content?
How do we make it easy to find and use that content? How do we allow our customers to easily, with little friction, expand that impact? If we think about how that translates into some of our core features on the next slide, some of this will come through with the press releases and the announcements we made last week. A really big investment around unlocking new data for us has been the introduction of Domo Cloud Amplifier, which is our multi-cloud solution. Just last week we announced GA with Snowflake and Twilio, as well as an open beta for customers with Google BigQuery, Databricks and Redshift.
Again, if we think about removing the friction, we know a lot of our customers, especially on that enterprise side, which Jeff mentioned, have existing cloud investments, might have multiple clouds whether they wanted it or not. Our ability to have a native integration, which unlocks all the power of Domo, including automated alerts, our low-code Magic ETL, the ability to write data back. All of that full goodness that we've seen in Domo, but still natively integrated with those cloud platforms, is a big investment and a big unlock in that new data area. In terms of creating content, you heard us talk about our new low-code app development tool, App Studio, which is in development and going to beta this summer, which really will continue to expand what are those data experiences?
How do I connect to action? As well as continuing to invest in our developer ecosystem and Brand Kit, so that if you have more advanced pro code resources, they can build on their own. App Studio comes along there with more of a low-code approach. With Brand Kit letting our users in our large... Our companies small and large stay aligned to their brand, to their colors, to their logos. Once we have that, again, we're very focused on driving action.
Part of App Studio is the low-code environment to be able to connect to action, collect data, push information to other systems, and some of that is run on our new Workflows engine, which also just entered a public beta last week, which really will both control actions internally within Domo, but also with external systems, and allow pro code resources to develop code snippets in code in our code engine to drive actions, based upon what's going on in the workflows, wait for things to complete and wait for people to finish a task so we can go on to that next task. We're often fond of saying that the best app is really the app you never see.
If there's things that can just be automated, we'd much rather empower our customers to automate those. The last two buckets are a little bit more future thinking, I'm pushing the team a lot right now. The first is this idea of now that I've had all this great content, and we've been very successful in making it easier and more democratized, and certainly when I was at Target and we see with other large customers, people using data in new ways. Once we have that, we do have the challenge, how do we ensure that we're smart about it? How do we make a re-imagination of our navigation and a customized, personalized discovery of content? How do we think about semantic layers and data model as a way to make that easier?
Lastly, how do we think about the emerging technologies, around natural language query, around GPT and other large language models, to integrate within our system, to allow us to empower our users to use this kind of technology to make it easier to find and use and get insight, while also balancing principles around flexibility and security. Making sure that we're not locked into a single model, making sure that our customers can use their own models that they train, use different third parties as the landscape continues to change. Again, all that to me is how do we make it easier to find and use and get value out of the data that's there? The last bucket is really around expanding our impact. That includes continued investment in our app store.
We're testing now, automated payments for some of our partners if they develop apps and they wanna be able to charge, which goes very nicely with the consumption pricing, which Jeff mentioned. Continued investment in our Domo everywhere embedded analytics . We know that there is a lot of success in terms of being able to share data with your customers, embedding content within your products, and that's definitely a motion we invest heavily in on. The last one is a commitment in the coming year to focus on, what I call advanced quick starts or really Domo data recipes.
Making sure that it's ever easier, less and less friction to share content across Domo, within our community, within your own instances of Domo, you know, from us to our customers, from our customers to each other, and really do that. Again, a commitment to how do we make all these experiences frictionless, and continue to drive value and ultimately, you know, towards that goal of making the data work for everyone, in an organization. If we quickly, we could go in Q&A deeper. This is a snapshot of what we announced last week. You know, the press releases are out there as well as a lot of information on our website, as you need it. Couple highlights.
We did go to GA with our new suite of Microsoft Office Add-ins, which work across operating systems, Mac, online, Windows. Even in the last week, we've seen a 2x increase in the number of customers using them now that they're GA. We really believe that that's another way to access these unique data experiences in Domo. As well as a number of new chart types. Looking at the Cloud Amplifier, which I mentioned already. Continued improvements to our Jupyter Workspaces. Partnership around NLQ technology and leaning into governance. If you look sort of in coming soon, some of the next evolution of Cloud Amplifier, including better OAuth integrations, more direct query and processing of data flows, as well as right back to Redshift.
The big one we talked about is our new low-code App Studio, which we have both some videos of that and really our engineers, you know, hands on keyboard, working on getting that to customers soon so we can get more feedback and drive that evolution. I'm certainly very excited where we're taking it as a user of the product and also as what we can see there. With that, I'll hand it off to David here to close us up.
Thanks, Ben. I'm David Jolley. I'm Domo's new chief financial officer. It's been great to meet many of you over the past several weeks, and hope to meet many more of you in the time to come. Since I'm a bit new to some of you, let me just give you a group... Excuse me. Let me give you a brief background on myself. I spent almost 31- years in public accounting, most of that with Ernst & Young, working with high-growth, entrepreneurial companies, generally that were less than $3 billion in revenue. I was the office managing partner for Ernst & Young in Salt Lake City for about a decade, working with a lot of companies, including Josh's previous company, Omniture, where I got to know Josh.
Then moved to Silicon Valley, where I worked with a lot of, you know, the big name tech companies, and guiding and directing them and helping to manage Ernst & Young's business. I later moved to New York and oversaw the Ernst & Young Entrepreneur Of The Year program. Again, working with a lot of the notable high-growth companies in the U.S. It's been a fast start here at Domo, so let me share a few observations that I've got. First, I came to Domo because I thought it's a great team, phenomenal product, and a really exciting opportunity. Like I said, I've known Josh for a long time, I can definitely say that his return back to Domo has brought a lot of energy to the company.
The four things I want to talk about today. First, our guidance and some of the assumptions behind that guidance. Second, how we see our sales capacity playing out for the remainder of the year. Why we see such great potential with our enterprise customers. I'll share some key performance metrics since our IPO. Let me start with a refresh of our guidance as of March 6th. We guided to fiscal 2024 billings growth of 4%-9%, and to revenue growth of 5%-7%. While in Q1, we said that we'd have a negative GAAP operating margin, we expect that to be positive for the year, and we expect to be slightly operating cash flow positive for the year.
Now, those top-line growth numbers that I just said, they're not too much to get excited about, and definitely they're not the numbers that we're playing for. As Josh mentioned, our number one objective this year is to get our new business growth model back on track, and that means getting back to 20% plus billings and revenue growth over time. Now, before I talk about how we get there, let me talk about some of the assumptions underlying our guidance. First, let me just say that when Josh came back, it was on a Friday, and he and I locked ourselves in a conference room at Domo for the weekend, along with our finance team and some other of our leaders here, and really poured through the numbers.
What the team saw in FY 2023, namely the sales attrition, reduced productivity, and a slightly higher churn, those were the numbers that went in to shape the model for FY 2024. For the FY 2024, there was modeled 30% sales churn, sales rep churn, and we had a slightly higher attrition model as well that was built into the FY 2024 projections. If we can manage to better than 30% churn, and I think Jeff talked a little bit about where we are year to date, which is much lower, and we can model better retention of our clients or achieve better retention of our clients, that should give us some upside.
Let me provide an update on our sales capacity and how we see that playing out for the remainder of the year. Sales capacity is a key driver in our business, as we saw last year. If we can experience sales force attrition that's lower than what we've modeled in the 30%, there's potential upside. We look at sales capacity primarily as the number of ramped reps that we have currently. It generally takes about three to six months to ramp a corporate rep and about nine to 12 months to ramp an enterprise rep. This slide shows the number of ramp reps for fiscal 2023 and fiscal 2024 by quarter.
In fiscal 2023, we started off the year in reasonably good shape with over 100 ramped reps in the first quarter, which was up 20% year-over-year. In part due to the attrition we saw, we didn't grow our ramp sales capacity nearly enough throughout the remainder of the year to support the growth that we were looking for. While we continue to be sales capacity constrained in the near term, we start to see or start to have better growth in Q2, in Q3 and Q4, we expect to see more meaningful growth as our ramped reps, and you can see in that chart, as our ramped reps continue to grow in the back half of the year.
Like I said, our objective is to bring our growth rate back up to what we above what we expect this year. Let me talk about how we do that. One is a tight go-to-market alignment between sales and marketing that Wendy and Jeff have talked about. Another is that we need our salespeople to feel supported, confident in their targets, and motivated to hit their numbers. That definitely includes our enterprise team, which is such an important part of our business. As Josh mentioned, a relentless focus on our customers is really key. Let me talk for a minute about our enterprise customers and those that serve them at Domo. Enterprise is an incredibly important part of our business. Last year, revenue from our corporate customers increased by 30%, while revenue from our enterprise customers increased 11%.
We'd expect to continue to see corporate new business outpace our enterprise new business in the near term because of the investments that we'd shifted last year in that direction. That said, we firmly believe that we have an outstanding opportunity in enterprise, and let me discuss why. First, our enterprise performance last year resulted largely from some go-to-market missteps. As Jeff talked about, we feel like we've taken the strong action to correct those missteps, and we enter this fiscal year in a much better position with our sales force. Let me share some data points on the enterprise, which highlight some of the ways we think about the opportunity here. This slide shows some enterprise customer metrics. 19 of our 20 largest customers are enterprise customers.
On average, the ARR from our largest customers have expanded from over 5x to well over 10x on average since the initial contracts, depending on the cohort. 50% of our ARR today comes from our enterprise customers. We also have 27 customers paying us over $1 million a year, which is up 30% year-over-year. Acquiring new enterprise customers has often been more expensive than acquiring new corporate customers. However, over time, we've seen some incredibly efficient growth and expansion with some of our largest customers, representing incredibly high potential long-term value. The next few slides can help illustrate that opportunity. This chart shows the ARR from the 27 customers paying us more than $1 million a year.
The average deal size at initial signing for these customers was about $350,000, and now sits at about $2 million of ARR, over a 5 x increase. These numbers include deals we've signed in the last year. It includes deals where we haven't had a lot of time to upsell yet. For our largest customers that have been with us more than a few years, the average expansion is well over 10x . While we don't have significant customer concentration, our largest customer represents about 2% of ARR. Collectively, this cohort of customers represents an important part of our business. They also represent some great brands, including well-known Fortune 500 companies. We think we're nowhere near reaching our full potential with these accounts.
While I'm on the top-topic of large customers, let me just say that I'm happy to say that we've already renewed our largest renewal in Q1 with one of these customers that you'd all recognize the name of. This slide is a deeper dive into the expansion with one of these customers. First, I acknowledge that this is not a representative example, as it's our largest customer, but it does show the art of the possible with these large enterprise customers and why we think it's an opportunity absolutely worth pursuing. We initially signed this deal in 2015, and it represented a little less than a $300 thousand deal. As the chart goes to the right, it shows the recurring ACV or annual recurring revenue for this customer as it grows each year through upsells.
The last bar on the chart shows where the company currently stands, which is ARR of over $5 million and over a 20 times expansion from the initial deal size. This customer has told us that they have achieved an over 10x return on their investment using Domo. We average over $800,000 of new business with this customer each year, or we have averaged over $800,000 of new business with this customer each year after the initial contract. The point I want to make is that while it costs a lot to acquire a new enterprise logo, the deal sizes in the subsequent years can be much larger, and the cost to expand within a customer such as this is significantly lower than it is to get the new logo.
Now I want to update you on some key metrics since our IPO. The main point of this slide is that despite a challenging last few quarters, we have significantly improved our top and bottom-line metrics since our IPO. We have, on average, grown our top-line metric, such as billings, revenue, and subscription revenue, and ARR over 20% on average. This has resulted in a base RRR that is almost three times the size of our ARR when we went public. It is such an important underpinning of our business. At the same time, we've kept costs under control to drive significantly improved operating margin and cash flow, including a 100 percentage point increase in our operating margin. To close, our goal is to get the top line re-accelerated to get to a little bigger scale.
With our 85% plus subscription margin, we believe we're well-positioned to deliver more meaningful operating profit and cash flow over time. With that, I'll open it up to questions. If you want to ask a question, you can just submit it in the chat section of the webinar.
Just in case not everyone's on the commentary, the webinar chat, one of the questions that we did get asked earlier is if I would be filing a Form 4 in relation to the stock purchases that I've been making. The answer is yes. Today after market close, you'll see that filing.
Here's a question, I think, for you, Josh, which is from Pat Walravens at JMP, which is, his infamous question: How's business?
Well, I would just refer back to the swagger that we just saw from our CFO talking about our enterprise business. I'm really excited that we're talking about the enterprise business this way. I do think it is a great business. I think there is a there there, if you will, on the upside in enterprise accounts. It's really easy to look at a spreadsheet and say, we shouldn't go after the enterprise new logos because it's so much easier to get corporate new logos. Yeah, it's true. If you're only doing an LTV based on that initial contract or based on your first five years of experience with enterprise, then it's really easy to come to the conclusion, throw more money, more money, more money after corporate, which we will, because it's great business for us.
You know, it's similar in retention as our enterprise business, but it's not similar in the upsells. I think if you look by cohort, there's definitely some interesting cohorts that we've had over the years from our enterprise business. I think there's gonna continue to be a great opportunity there. The other thing that I think's worth talking about is this, the shift to consumption. I don't wanna over-index on that. It's interesting. You know, in order for us to hit 30% growth, which we were at 12- months ago, we just have to do more of what we were doing. Now, there's upside to that. I think you see that messaging that we got from Wendy today, it's...
She has the benefit of not having been here through all of the pain, when we were trying to figure it out. You know, we kept getting closer. Gosh, what a breath of fresh air to have Wendy come in with that big brain of hers and all the experience, listen to us, listen to our customers, be respectful of the past, but at the same time, be like, "Here's a new path to the future. Do you want to come with me?" "Yes, please." That's been so invigorating and exciting. I think the consumption, like Jeff said, it does present an opportunity. There's some customers that map their value more to the amount of data that's being processed, their CIOs. Everything else they're paying for has a data component.
Us switching to a data component for customers like that, I think is a real opportunity. I do think there's a lot of upside over the next few years there, but it's upside to what we were doing 12- months ago. We can get back to 30% growth without reinventing anything. I think Wendy's messaging is upside. I think Jeff's leadership style is going to be upside. I think it's the right style for what we need at this current place that we're at. You know, you see guys like people like Ben come in who've been at... I mean, we always told everybody Ben was our smartest customer for a long time.
I don't know who has that mantle now, that title now, but it was always so fun to be like, "Oh, we got a really good customer over here. Oh, Ben. See if you can have a conversation with him." Or we'd be like, "You know, if we could just get 10 more Bens and stick them in 10 of our biggest customers, can you imagine what would happen to our ARR?" Lots of really good stuff going on. There's a bunch of questions here that I'll start to go through and answer. Cost of sale for enterprise versus corporate. Joel, are you up to speed enough to answer that one?
Yeah. Yeah. it's about for a new logo-.
Joel, remember, we don't have to answer everything. You don't have to give all the details. Pat Walravens will definitely kinda catch you.
Got it. Okay. Yeah. For a new logo in enterprise, it's about 35% higher cost and higher acquisition cost than it is for a corporate logo. You know, not like a 2x or 3x. I mean, it's a little higher, but not dramatically.
You know, a lot of times it's just different types of events too, right? It's, it's, you know, get a box to the Vikings game and invite three customers and invite three prospects and, have the three prospects sit there and watch a game. It's, you know, on a spreadsheet, it's hard to make sense of that. You watch those conversations evolve and, it's, you know, then you get people like UHG talking with Target, and, you know, I saw that happen and saw great business come out of that. I think it's really interesting. Let's see. What % of enterprise accounts are truly addressable, meaning the IT department is open to new tools like Domo? Oh, I would say, if they're... We don't have that issue as much anymore.
We had that issue, I'd say five years ago. You know, at the time, we didn't recognize that IT would, you know, kill us off if we didn't go in and make friends with them. We learned our lesson. The second we get a deal that's with the business, a line of business, we are knocking on IT's door, making sure that we're complying with all of the requirements they have, making sure that we're their friends. I would say they're all open to new tools like Domo. We need to get better at creating adoption teams, that's something that we're very excited about. We think there's a real opportunity there. When you think about...
Jolley mentioned it, when you think about the cost of a new $1 of ARR, new versus upsell is much cheaper. We could do a lot more on the upsell side, to, you know, put people like Ben Schein inside our customers and go sit there for three months or for one year, depending on the size of the customer. We think there's a lot of upside in things like that. Programs. Mohammed Aaser is helping us a lot with adoption. He was over at McKinsey consulting on this exact topic, and we think there's a lot of upside with the, with the way that he can help our customers and his team. Any new products specifically aimed at new logo versus installed base? Ben, do you wanna answer that?
Yeah. I mean, I think a lot of it, I wouldn't say anything is specific. A lot of that comes in our partnership with Wendy and her product marketing team. I do think, in terms of our ability to get new people on board and the friction, the Cloud Amplifier, is very big for us, both in terms of how quickly we can access that, but also with the manner in which we can partner with Snowflake, Redshift, Dremio, Databricks, all of those companies which already have their own go-to-market and sometimes existing customer base.
I think more of those where we can leverage and integrate into that ecosystem, certainly at some of the big customers as people are asking, I think that's sort of a game shift in our ability to bring new people on quickly. Plenty of customers who have sort of used our traditional model in the past, and we see value for them there as well. I think in terms of the messaging and how we frame some of those, that's going to be a big shift for us.
Yeah. I'd add to that just that definitely ecosystem is a focus. You know, we think we can play much more effectively in the ecosystem over time. We're very, very focused on that. Jeff, question from Derrick Wood: Can you double-click on how you plan to drive faster sales rep ramp cycles, higher productivity, and better conversion rates?
Yeah, you bet. Thanks for the question, Derrick. There's a couple things I would point out, one I mentioned a little bit earlier, and that is aligning our manager-to-rep ratios. That frontline manager-to-rep ratio is pretty tight right now. Last year we were like a 10 to one, and we're closer to a seven to eight to one. What that means is that these frontline managers can spend more time in the deals and helping reps come up to speed more quickly, whereas before, you know, they were focused on their top producers, which totally makes sense. I think that's one thing that really helps. The other thing is just at bats. The way we structured things last year, we had segmented some of our best sellers to not get inbound leads, which is kind of stupid.
We've changed that this year. At bats, help us get reps up to speed quicker 'cause they, you know, they're in those. They're having more conversations. We've aligned the teams this year to give the frontline managers ability to spread those leads out a little bit better that do come in. Obviously, we tell everybody, "Hey, go cook your own dinner. Make sure you go create your own leads." Wendy and her team, they create a ton of leads for us, and those are the leads that close the quickest and are the easiest. By getting those distributed properly, our newer reps get more at bats, which helps them come up to speed a bit quicker. That leads to, you know, just momentum that builds, you know, more productivity.
I'm doing a lot right now as well on conversion rates. Some of the stuff I've mentioned helps with conversion rates, but a lot of the stuff we put in place and the things I'm looking at and myopically looking at is it will help us increase those conversion rates as we go forward, some of the vertical stuff we've done and things. Those are the main things that will help us drive faster sales rep ramping and higher productivity.
I think, Wendy, do you wanna talk a little about the funnel?
Yes. We are seeing incredible strength at the top of the funnel. You know, I've got a great Domo dashboard, of course. We are up, I'm almost embarrassed to say this because it's really true, 56% year-over-year on our SAL creation or sales accepted leads. You know, I scanned every single segment, region, and creator group, and we are up in all of those. Corporate being our biggest segment, that one in particular is up 37%. With all of the others being up as well, it combines, gets us to 56%. When we see that kind of strength, that says there is demand, that says that what we're doing resonates, that people have a need.
That gives us into this great process that Jeff has created with more focus on the conversion rates and getting those extremely strong. We are extremely optimistic, you know, when we look at top of the funnel and the handoff to the lower part of the funnel.
Yeah. I would. That's true. It's awesome. I'd temper it a little bit in just the sense that the macro is still the macro. You know, I think that's why we mentioned that, you know, some of the conversion rates aren't following through the way that we've seen them historically. We're not going to, you know, closing it out lost to another competitor. They're just not doing anything is something that we are seeing. You know, our guidance still remains our guidance, but we are seeing some, you know, nice signs of things that make us feel like when the macro is, you know, stable long term, we're feeling in a much better position.
Another question we got is how much of your ARR is COVID deals, and what's the level of risk that more of those churn out? We don't have too much of our business. There were really only four or five deals that we had that were COVID related. They were all meaningful in size. We've had down sales from most of them. We were proud of just the fact that we retained most of them as customers, which really was the goal. It was like, "Hey, we'll take the cash right now 'cause it's COVID." Please, yes, we'll take the cash. We'll do some great work. It kept us busy. It was exciting. We were helping out.
The long-term plan was just let's make sure we can try to turn these people into real long-term customers, which we did for the most part. There's one customer left that we haven't had any downsells from, but we've been doing a lot of other business with them. You know, it's a couple million bucks at most, I think would be at risk over the long haul. Let's see. Are there changes and improvements you're working on on the customer success team? Jeff, are you best equipped to talk about what Mark Maughan's been doing? Mark Maughan has taken over that team, and he's doing a fantastic job. I'm really excited about his leadership and just about how excited he is to get his hands on that.
He's been watching it from afar. He's the one that was responsible for a lot of special projects over the years and a lot of the more complex customers and turning them into, you know, getting adoption up. Maybe, Jeff, you could talk a little about Mark and then about what he's doing with that organization.
Yeah. Mark reports up through me, and we've been very closely aligned on how we, you know, go from quote to renewals. In our world.
Upsell. Quote to upsell.
Upsell to renewal. When you're upselling, the renewal is a non-event.
Exactly.
We are doing a lot about the customer journey. It's a little different between our enterprise customers and our corporate customers, just in terms of the focus and attention we need to give to them. Yeah, we're doing a lot there to make sure that we have the best customer experience as possible. The good news is we're completely aligned on this. Mark and I have a very close working relationship. He's kind of been on a little bit of a listening tour for the first little bit as he gets up to speed on that role. We, you know, we've got a lot of great ideas about how to just make incremental improvements there to improve our customer success.
As you know, retention rates are really high anyway, we think there's some upside there as well for over time.
Thank you. Yeah, I also know he's really excited about that adoption team. you know, having a team that can go into our biggest customers, our enterprise customers, and then also any of our. We have these customers now, about 10% of our ARR is we're charging them based on the data that they use. There's a pretty good incentive to make sure we're using as much data as possible, help them really drive that benefit that they're getting out of the data, help them connect additional datasets that they wanna connect. That's also an initiative. Where are you in your return to the office policy? We've told the company that, you know, they should definitely expect to return to the office. We're not gonna be doing a remote work environment.
We really like and appreciate the collaboration you get by being in person. We still have to figure it all out. We've got some facilities that we still need to work with, so we're not ready to have everybody come back. Over the next few months, we will be. We'll be working on our policies to make sure that we're taking into account, you know, there's some all-stars out there that may just tell us that they're working remote, and we will say, "Okay, thank you very much for staying. We love you and your contributions." There's other positions that might just be remote positions. You know, that's good to recognize what those and identify what those are because it helps you expand your geographical footprint and your requirements.
You can go further out. There'll be the majority that we wanna have in the office for a few days a week at least. Still sorting through all of that. Question to David. You wanna take that last one question? You see that there?
I don't see it.
I did. Why did you model 30% sales churn for fiscal year 2024?
Uh-.
If sales churn levels you are seeing today persist through fiscal year 2024, what would growth in productive sales capacity look like exiting the year?
Yeah. Good question. We modeled 30%. Again, just to remind, Josh and I spent basically a weekend reviewing the model that had already been put together. You know, I think just not knowing exactly what the macro headwinds were gonna present, we decided to leave that as was already modeled out at the 30% churn. Again, with the.
Well, David-.
With the-.
David, I'll add, I think that was the reason that they left that they had that there in the first place.
Yeah.
I don't think there was an anticipation that we would have 30% churn. You know, given the macro, it was a good kind of placeholder, if you will, to say, "Okay, we need to make sure there's enough slack in the system here.
Yeah. Yeah. Great point. Yeah, so if we can continue to manage through, you know, the remainder of the year, kind of on par with what Jeff described, you know, we should be in good shape, in achieving our numbers and maybe a little better. Was there another part to that question?
Nope. No.
Okay. All right.
That's it. Next question. Sounds like you think a lot of the growth problems last year were from sales rep productivity. How long until you have a product that sells itself? Well, that's kind of cheeky, but it's a great question, actually. You know, it's PLG is something that product-led growth is something we would definitely, we've always wanted to have. You know, ironically, 25- years ago, I had product-led growth, and we never had to do anything for sinus, and it just happened, and had a couple million customers buying analytics from me. It's, you know, something I think that we've always been focused on, and we're seeing more of the pieces get put into place.
Having a consumption model where we can charge customers based on something that's not seats, you really have to have. It's hard in the business that we're in to charge based on seats because it limits the growth, it limits the people that are putting data in, limits the people that are querying the system, that are. It limits the value expansion. It's totally counterintuitive, but it was such a complex business that it was difficult to do it any other way. Now that we have this consumption model that's really coming to bear, I think especially over the next 12- months, and like I said, it's something we've been working on five years.
I think that coupled with, you can go to our site and sign up for a free account, and there's a freemium component to our business. The experience is pretty horrible still, but that's the stuff that we're working on to try to turn this to a product-led growth company, making it so that our product is more discoverable. You know, for a long time, we were just putting the car together while we were rolling down the freeway. We've got it all together. Now we need to go back and say, "Okay, what's the right way to position this? What's the right way to message this? What's the right way to discover this when you're inside the product? What's the right way to create adoption for the users?
What do the users do that make the longest term, make the best growth over the long term? What are those, what are those different parts of the product they use that drive that behavior? Just making that more discoverable. Definitely working on that. We're focused on that for sure. I think probably the last question here, Peter, I'll give it back to you. Just for an analyst mind snack, how high do you think revenue growth opportunity could be over the next approximately five years? 30% number has been cited, but higher? I think higher. You know, I've always been planning for higher. It's 30% I'd be happy with. You know, if we can cruise along for 30% for the next 10- years, I'd be happy.
I wouldn't be ecstatic. I wouldn't feel like I accomplished something that I hadn't already accomplished, you know, for many, many, many years. It's not that exciting to me. We are definitely shooting for higher, which is why you're seeing us talk about the compute model, consumption model, which is why you're seeing this, which is why you see us, even though it hasn't driven a lot of growth, it's why you see us have a freemium component because we think that we can adjust that and get that right. You know, pointing to what Wendy brought up, there's a lot of people out there looking for stuff like this. They don't know that it's a thing. They don't sit there and wake up and say, "You know what I need?
I need a data experience platform." They will. When they do, we think we're the most well-positioned for that. We do think there's a lot of opportunity for growth, and we think that, we can approach more of a Snowflake-like business model, more of an Omniture-like business model where you wake up on the first day of the fiscal year and you know you're walking into a lot of growth that's just happening because of the way your customers are using the product and the value that they're getting out of that.
Okay. Well, thank you everyone for joining. Peter Lowry, VP Investor Relations. I hope you've found the content useful. I think we got to most of your questions, but if you have any follow-up questions, feel free to reach out to me at peter.lowry@domo.com. Thanks again, everyone, for joining.
Goodbye