Key facts
- Progress Software will acquire Domo's AI and data business for $400 million.
- Domo will continue to exist as a separate publicly traded company.
- Josh James, Domo's founder and CEO, will lead the remaining entity.
- The remaining Domo entity holds $246 million in cash and over $900 million in net operating loss carryforwards.
- Domo's stock increased by approximately 30% after the deal was announced.
Progress Software has agreed to purchase Domo's AI and data business for $400 million, marking the end of a significant chapter for Domo and its founder, Josh James.
Domo, a publicly listed software company, announced that Progress Software will acquire nearly all of its operations and employees, while also assuming some liabilities. James expressed confidence that Progress Software would provide a stable future for the business and its built-up impact.
Following the transaction, Domo will continue to operate as a separate, publicly traded company under a new name and ticker. Josh James will remain at the helm of this remaining entity. The company highlighted its remaining assets, including $246 million in cash and over $900 million in net operating loss (NOL) carryforwards, which can be used to reduce future tax liabilities.
Domo has experienced losses since its public debut in 2018. The company's board is actively exploring strategies to maximize value from these NOLs and is considering potential transactions that could leverage its AI and automation expertise for revenue generation. Alternatively, the board indicated that capital could be returned to shareholders.
In response to the news, Domo shares surged approximately 30% on Thursday, valuing the remaining company at nearly $190 million, which was less than its cash reserves. Yogesh Gupta, CEO of Progress Software, noted that Domo's product capabilities are highly complementary to Progress's existing data platform, enhancing the security, governance, and cost-efficiency of customer AI initiatives.