DOMO, INC.DOMO
DOMO, INC. Income Taxes Disclosure
Income Taxes
Loss before income tax provision consisted of the following (in thousands):
| Year Ended January 31, | |||||||||||||||||
| 2024 | 2025 | 2026 | |||||||||||||||
| United States | $ | (76,870) | $ | (82,941) | $ | (62,018) | |||||||||||
| Foreign | 2,558 | 2,216 | 4,435 | ||||||||||||||
| Total | $ | (74,312) | $ | (80,725) | $ | (57,583) | |||||||||||
The components of the income tax provision were as follows (in thousands):
| Year Ended January 31, | |||||||||||||||||
| 2024 | 2025 | 2026 | |||||||||||||||
| Current income provision: | |||||||||||||||||
| State | $ | 81 | $ | 92 | $ | 118 | |||||||||||
| Foreign | 884 | 868 | 948 | ||||||||||||||
| 965 | 960 | 1,066 | |||||||||||||||
| Deferred income tax provision: | |||||||||||||||||
| Foreign | 292 | 250 | 693 | ||||||||||||||
| Provision for income taxes | $ | 1,257 | $ | 1,210 | $ | 1,759 | |||||||||||
The Company adopted ASU 2023-09 prospectively, and the below table is in accordance with the new guidance.
Total income tax expense during the year ended January 31, 2026 differed from the amounts computed by applying the U.S. federal income tax rate to income before income tax expense as a result of the following (in thousands):
| Year Ended January 31, | |||||||||||
| 2026 | |||||||||||
| Tax benefit at U.S. federal statutory rate | $ | (12,092) | 21 | % | |||||||
State income taxes, net of federal tax benefit(1) | (384) | 1 | |||||||||
| Foreign taxes: | |||||||||||
| Japan | 778 | (1) | |||||||||
| Other jurisdictions | 441 | (1) | |||||||||
| Non-deductible expenses | 280 | — | |||||||||
| Stock-based compensation | 4,589 | (8) | |||||||||
| Officer compensation | 1,593 | (3) | |||||||||
| Research and development credits | (1,643) | 3 | |||||||||
| Changes in unrecognized tax benefits | 411 | (1) | |||||||||
| Change in valuation allowance | 7,875 | (14) | |||||||||
| Other | (88) | — | |||||||||
| Provision for income taxes | $ | 1,759 | (3) | % | |||||||
(1) State taxes in Utah and California made up the majority of the tax effect in this category.
Total income tax expense during the years ended January 31, 2024 and 2025 differed from the amounts computed by applying the U.S. federal income tax rate to income before income tax expense as a result of the following (in thousands):
| Year Ended January 31, | |||||||||||
| 2024 | 2025 | ||||||||||
Tax benefit at U.S. federal statutory rate(1) | $ | (15,606) | $ | (16,952) | |||||||
| State income taxes, net of federal tax benefit | (1,587) | (3,188) | |||||||||
| Non-deductible expenses | 1,077 | 2,451 | |||||||||
| Foreign tax differential | 183 | 340 | |||||||||
| Stock-based compensation | 14,272 | 11,370 | |||||||||
| Research and development credits | (2,777) | (1,386) | |||||||||
| Change in valuation allowance | 6,411 | 5,757 | |||||||||
| Foreign withholding taxes | 245 | 220 | |||||||||
| Other | (961) | 2,598 | |||||||||
| Provision for income taxes | $ | 1,257 | $ | 1,210 | |||||||
(1) The statutory tax rate used in this analysis was 21% for the years ended January 31, 2024, 2025 and 2026.
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities were as follows (in thousands):
| As of January 31, | |||||||||||
| 2025 | 2026 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 316,434 | $ | 340,811 | |||||||
| Research and development credit carryforwards | 26,398 | 27,984 | |||||||||
| 174 Expense | 22,899 | 2,112 | |||||||||
| 163(j) interest limitation | 20,044 | 24,097 | |||||||||
| Stock based compensation | 5,077 | 4,861 | |||||||||
| Lease liability | 3,663 | 2,028 | |||||||||
| Deferred revenue | 712 | 1,470 | |||||||||
| Accruals and other reserves | 618 | 444 | |||||||||
| Other | 717 | 838 | |||||||||
| Gross deferred tax assets | 396,562 | 404,645 | |||||||||
| Valuation allowance | (381,262) | (389,261) | |||||||||
| Total deferred tax assets, net of valuation allowance | 15,300 | 15,384 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Contract acquisition costs | (8,452) | (10,509) | |||||||||
| Capitalized software | (4,843) | (5,110) | |||||||||
| Right-of-use assets | (2,845) | (1,500) | |||||||||
| Basis difference in intangible assets | (268) | (178) | |||||||||
| Total deferred tax liabilities | (16,408) | (17,297) | |||||||||
| Net deferred tax liabilities | $ | (1,108) | $ | (1,913) | |||||||
In assessing whether deferred tax assets should be recognized, the Company considered whether it is more-likely-than-not that some portion or all of the deferred tax assets would be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considered the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. While limited losses may be utilized due to capitalization of research and development expense, the Company determined it was more-likely-than-not that its domestic deferred tax assets would not be realized as of January 31, 2025 and 2026 and, accordingly, recorded a full valuation allowance. Net deferred tax liabilities are included in other liabilities, noncurrent on the consolidated balance sheets.
As of January 31, 2026, the Company had federal and state NOLs available to offset future taxable income, if any, of $1,289.3 million and $1,414.7 million, respectively. The federal NOLs will begin to expire in 2032. The state NOLs will expire depending upon the various rules in the states in which the Company operates. Full realization of the NOLs is dependent on generating sufficient taxable income prior to their expiration. The ability to realize the NOLs and other deferred tax assets could also be limited by previous or future changes in ownership in accordance with rules in Internal Revenue Code Sections 382 and 383.
As of January 31, 2026, the Company also had unused federal and state research and development tax credits of $29.0 million and $10.7 million, respectively. A small portion of the federal and state credits will expire depending upon the various rules in the states in which the Company operates.
During the fiscal years ended years ended January 31, 2024, 2025 and 2026, the aggregate changes in the total gross amount of unrecognized tax benefits were as follows (in thousands):
| Year Ended January 31, | |||||||||||||||||
| 2024 | 2025 | 2026 | |||||||||||||||
| Beginning balance | $ | 7,868 | $ | 8,839 | $ | 9,330 | |||||||||||
| Increase in unrecognized tax benefits taken in prior years | 640 | — | 38 | ||||||||||||||
| Increase in unrecognized tax benefits related to current year | 331 | 491 | 522 | ||||||||||||||
| $ | 8,839 | $ | 9,330 | $ | 9,890 | ||||||||||||
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is zero due to the valuation allowance. Any tax legislation impacting the taxability of the Company may change the unrecognized tax benefits over the next twelve months.
The Company files U.S. federal, U.S. state, and foreign tax returns and is subject to examination by various taxing authorities for all open tax years. The Company is not currently under audit by the Internal Revenue Service or any other tax authority.
The Company paid income taxes of $0.6 million and $1.2 million, net during the years ended January 31, 2024 and 2025.
The following table presents the Company's income taxes paid (received), net by jurisdiction for the year ended January 31, 2026 (in thousands):
| Year Ended January 31, | |||||
| 2026 | |||||
Foreign | |||||
United Kingdom | $ | (619) | |||
Japan | 350 | ||||
Australia | 152 | ||||
India | 68 | ||||
Other | 8 | ||||
State | 9 | ||||
| $ | (32) | ||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Apr 16, 2026 | Showing above |
| 2025 | Apr 4, 2025 | |
| 2024 | Mar 28, 2024 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.