Progress Software agreed to buy Domo’s AI and data business for $400 million, ending a tumultuous chapter for tech executive Josh James. It’s not the end, though.
Progress, a public software company with a $1.5 billion valuation, will buy almost all of Domo’s operations and employees and assume some of its liabilities, according to announcements.
“I believe Progress can provide a strong, long-term home for Domo’s business and help extend the impact of what our team has built,” James said in Domo’s announcement.
After the deal closes, Domo will remain a separate publicly listed company with a different name and ticker. James, Domo’s CEO and founder, will lead this entity.
Business Insider has reported deeply on Domo’s business and leadership challenges, including executive departures and James’s drunken-driving arrest.
While Domo’s main businesses are being sold, the remaining listed company still has assets: $246 million in cash and more than $900 million in net operating loss, or NOL, carryforwards.
NOLs let a company use losses from past years to reduce the taxes it has to pay on profits it earns in future years. Domo has reported losses every quarter since it went public in 2018. The company said on Wednesday that it has set up a plan to preserve and use these tax-based assets. It warned that it might not be able to tap them all.
NOLs become valuable when a company makes a profit. On Wednesday, Domo’s board said it’s looking for ways to generate value from these NOLs.
And with $246 million in cash and no debt, the remaining company will consider “potential transactions” where it can use its AI and automation know-how to make money. It could also return capital to shareholders, the board added.
Domo shares jumped about 30% on Thursday following the announcements. That valued the remaining company at nearly $190 million — well short of its $246 million in cash.
Yogesh Gupta, CEO of Progress Software, said Domo’s product capabilities “are highly complementary to our expanding Progress data platform capabilities that significantly improve the security, governance, and cost of our customers’ AI initiatives.”
Domo’s growth has slowed as the company, along with the rest of the software industry, faces more competition from AI tools.
Spokespeople from Domo and Progress did not provide further comment beyond the press releases.
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