And so, just identifying those different ways that we can interact with our customers to help get them excited about adding additional users and adding additional use cases. It’s really fun for the customer, and it’s really fun for us. They end up happier. They end up spending more. And those are the types of things that we can really do to address transitions to consumption. There are some customers that are on seat-based licenses with us, and they don’t have access to all the features. We have new features rolling out all the time, and if you want to use those features, then you need to be on consumption. And so, as we go out and market the different product offerings that we have and the new product offerings that we have, those all lead to additional consumption conversation.
So, we’re definitely laser-focused on that. We’ve seen this 20% cohort of consumption that’s in our business today. And it looks better than every other 20% cohort that you could find. So, we’re going to do anything and everything we can to get the entire business moved over to that because just everyone ends up happier on the consumption model.
Unidentified Analyst: Appreciate the color. Thanks.
Josh James: Yeah, you bet. Thank you.
Operator: Thank you. We’ll take our next question from Sanjit Singh with Morgan Stanley.
Sanjit Singh: Yeah, thank you for squeezing me in. And sorry, I’ve been toggling between multiple calls, so if I’m repeating a question, I apologize upfront. But David, just given the — sort of the refinancing of the debt and sort of the higher rate environment and given the sort of actions you guys are doing today on cost, to what extent could debt pay down be part of like the capital allocation strategy, given that the budget environment is still pretty constrained right now? How do you look at debt pay down a potential lever for increasing sort of the equity value?
David Jolley: Yeah. I mean the good thing is even sort of as is with a very modest growth expectation for next year, I think we’re free cash flow positive, which puts us in a great position. So, if we’re able to accomplish some of the things that Josh talked about in accelerating our shift to consumption, and if we get any sort of help from the macro environment, then we’re into producing some meaningful cash flow that then could be used to potentially retire some debt. As you know, there’s usually some penalties when you pay it down in the first year. So, we’ll look at that. But I think it’ll be — probably will be a lot better position as we move into some of those succeeding years to start reducing that well in advance of maturity, certainly.
Sanjit Singh: Great. I appreciate the thoughts. And then, Josh, on — I was just kind of coming out of the AWS conference, and when I hear about people’s data strategies, one of the bigger themes is sort of English being the new programming language and English being the new SQL. And just want to get a sense of how you guys are sort of abstracting away kind of traditional BI type user interfaces to more of that generative AI modality where users are just sort of using natural language, English, to get the insights that they need from Domo?
Josh James: Yeah, I mean it’s terribly exciting because one of the most challenging things in business intelligence or in leveraging the data that you have in your company is just getting access to it. And the big part of getting access to it is connecting to it, all of the ETL that needs to go into it. And you’re right, that’s where these antiquated languages used to be a big part of it. And going forward, it is about English. And we have a bunch of stuff that we’ve already incorporated into our products, a bunch of AI that we’ve incorporated into our product, and a bunch of generative AI that we’re going to be incorporating over the next few months into exploring the data, into building cards, into sharing data, having a data set and having AI suggest to you what you should look at, what format it should look like, being able to pick and choose from things that it suggests to you, fully formed reports.
And so, it’s going to dramatically alter the landscape. It’s going to dramatically alter the interactions and the benefits that the customers get. So, we’re really excited about that. We feel like we’re extremely well positioned. When you look at the data that powers AI, it all depends on how organized that data is. And if your data is organized like a bunch of trash, then that’s exactly what you’re going to get back. When you use Domo, you actually not only organize your data, but you have a bunch of metadata about that data. And that’s what helps AI really come up with great conclusions when it actually has an indication of what type of data is sitting there because in the data world it could be anything. It could be unstructured, messy data, and it might be data that’s coming from another data warehouse.
You actually don’t know the root source of it, and so you need to be able to have the metadata around that and have data organized in a way. And that’s one of the things that we really do with our customers, is help them organize that so that they can take advantage of all the different technologies and innovations that are rapidly coming out from AI. So, we feel like we’re extremely well positioned for that. And that’s another big part of why we want to be in the middle of consumption, because again, if you’re using consumption, anything that is in our product, you can try out. It’s going to cost you a buck to try it out. It’s not a $50,000 commitment and you’ve got to buy a couple seats. It’s just go and click on it, see what it does, see if it produces something that’s effective.
And then, if it does, of course, you’re going to start using it more. And because you already know it’s effective, even though you’re using it more, you’re getting a bill for it, you don’t care because you already proved the value. So that’s just another reason why consumption is such an important part of this, where we see 2x, 3x usage of the additional features and functionality we have in our product when it’s a consumption customer, because they’re able to try it out and prove that it works. So, we’re really excited about AI and the way it’s going to impact our business, broadly speaking, and feel like we’re really well positioned to take advantage of that.
Sanjit Singh: Appreciate the thoughts, Josh. Thank you.
Josh James: You bet. Thanks.
Operator: And that does conclude today’s presentation. Thank you for your participation today, and you may now disconnect.
