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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Zuora Inc | NYSE:ZUO | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.01 | 0.10% | 10.40 | 10.66 | 10.35 | 10.42 | 999,808 | 00:44:24 |
Subscription revenue grew 14% year-over-year; total revenue grew 9% year-over-year
Zuora, Inc. (NYSE: ZUO), the leading cloud-based subscription management platform provider, today announced financial results for its fiscal first quarter ended April 30, 2021.
“The first quarter was a solid start to the year, as we executed on the strategy we laid out at last month’s Investor Day. We exceeded expectations across our key operating metrics, drove significant improvement on net dollar retention, and believe that we have built a solid foundation for Zuora's long-term growth,” said Tien Tzuo, founder and CEO of Zuora.
First Quarter Fiscal 2022 Financial Results:
A description of non-GAAP financial measures is contained in the section titled "Explanation of Non-GAAP Financial Measures" below and a reconciliation of GAAP and non-GAAP financial measures is contained in the tables below.
Key Metrics and Business Highlights:
Financial Outlook:
As of May 26, 2021, we are providing guidance for the second quarter and full year fiscal 2022 based on current market conditions and expectations. We emphasize that the guidance is subject to various important cautionary factors referenced in the section entitled “Forward-Looking Statements” below, including risks and uncertainties associated with the ongoing COVID-19 pandemic.
For the second quarter and full fiscal year 2022, Zuora currently expects the following results:
Second Quarter
Fiscal 2022
Subscription revenue
$67.5M - $69.5M
$274.0M - $278.0M
Total revenue
$82.5M - $84.5M
$337.0M - $339.0M
Non-GAAP loss from operations
($5.0M) - ($4.5M)
($12.0M) - ($8.0M)
Non-GAAP net loss per share¹
($0.04) - ($0.03)
($0.10) - ($0.06)
(1) Non-GAAP net loss per share was computed assuming 123.1 million and 124.1 million weighted-average shares outstanding for the second quarter and full year fiscal 2022, respectively.
These statements are forward-looking and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Zuora has not reconciled its guidance for non-GAAP loss from operations to GAAP loss from operations or non-GAAP net loss per share to GAAP net loss per share because stock-based compensation expense cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.
Webcast and Conference Call Information:
Zuora will host a conference call for investors on May 26, 2021 at 5:00 p.m. Eastern Time to discuss the company’s financial results and business highlights. Investors are invited to listen to a live webcast of the conference call by visiting https://investor.zuora.com. A replay of the webcast will be available for one year. The call can also be accessed live via phone by dialing (844) 484-8185 or, for international callers, (647) 689-5143 with conference ID 4746257. An audio replay will be available shortly after the call and can be accessed by dialing (800) 585-8367 or, for international callers, (416) 621-4642. The passcode for the replay is 4746257. The replay will be available through June 2, 2021.
Explanation of Non-GAAP Financial Measures:
In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain non-GAAP financial measures, including non-GAAP cost of subscription revenue, non-GAAP cost of professional services revenue, non-GAAP gross profit, non-GAAP subscription gross margin, non-GAAP total gross margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss per share, and free cash flow. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.
We use these non-GAAP measures in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies and to communicate with our Board of Directors concerning our financial performance. We believe these non-GAAP measures provide investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of our operating results. We also believe these non-GAAP measures are useful in evaluating our operating performance compared to that of other companies in our industry, as they generally eliminate the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance.
We exclude the following items from one or more of our non-GAAP financial measures:
Additionally, Zuora’s management believes that the free cash flow non-GAAP measure is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures, net of insurance recoveries, as these net expenditures are considered to be a necessary component of ongoing operations. Insurance recoveries include amounts paid to us for property and equipment that were damaged in January 2020 at our corporate headquarters.
Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. The non-GAAP measures we use may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures.
Operating Metrics:
Annual Contract Value (ACV). We define ACV as the subscription revenue we would contractually expect to recognize from a customer over the next twelve months, assuming no increases or reductions in their subscriptions.
Dollar-based Retention Rate. We calculate our dollar-based retention rate as of a period end by starting with the sum of the ACV from all customers as of twelve months prior to such period end, or prior period ACV. We then calculate the sum of the ACV from these same customers as of the current period end, or current period ACV. Current period ACV includes any upsells and also reflects contraction or attrition over the trailing twelve months but excludes revenue from new customers added in the current period. We then divide the current period ACV by the prior period ACV to arrive at our dollar-based retention rate.
Forward-Looking Statements:
This press release contains “forward-looking statements” that involve a number of risks and uncertainties, including but not limited to, statements regarding our GAAP and non-GAAP guidance for the second fiscal quarter and full fiscal 2022 and financial outlook and market positioning. Words such as “believes,” “may,” “will,” “estimates,” “potential,” “continues,” “anticipates,” “intends,” “expects,” “could,” “would,” “projects,” “plans,” “targets,” and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on management's expectations as of the date of this filing and are subject to a number of risks, uncertainties and assumptions, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in our Form 10-K filed with the Securities and Exchange Commission on March 31, 2021 as well as other documents that may be filed by us from time to time with the Securities and Exchange Commission. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the impact to the economy, our customers and our business due to the ongoing COVID-19 pandemic; we may be unable to attract new customers and expand sales to existing customers; we may not be able to manage our future growth effectively; the shift by companies to subscription business models may develop slower than we expect; we have a history of net losses and may not achieve or sustain profitability; we face intense competition in our markets and may not be able to compete effectively; our products may fail to gain market acceptance or our product development efforts may be unsuccessful; customers may fail to successfully deploy our solution after entering into a subscription agreement with us; we may not be able to develop and release new products and services, or successful enhancements, new features and modifications to our existing products and services; the risk of loss of key employees; our sales and product initiatives may not be successful or the expected benefits of such initiatives may not be achieved in a timely manner; challenges related to growing our relationships with strategic partners such as systems integrators and their effectiveness in selling our products; our security measures may be breached or our products may be perceived as not being secure; our products may fail to gain, or lose, market acceptance; we may experience interruptions or performance problems, including a service outage, associated with our technology; we may be unable to adequately protect our intellectual property; current and future litigation including our current shareholder litigation could have a material adverse impact on our financial condition; general political or destabilizing events, including war, conflict or acts of terrorism; other business effects, including those related to industry, market, economic, political, regulatory and global health conditions, changes in foreign exchange rates; weakened global economic conditions may adversely affect our industry; and other risks and uncertainties. The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. Additionally, these forward-looking statements, particularly our guidance, involve risk, uncertainties and assumptions, including those related to the impact of COVID-19 on our business and global economic conditions. Uncertainties that we may face include, but are not limited to, our ability to achieve our long-term plans and key initiatives, requests for extended billing and payment terms from customers affected by COVID-19, the timeframes for and severity of the impact of COVID-19 on our customers’ purchasing and renewal decisions, and the length of our sales cycles, particularly for customers in certain industries highly affected by the COVID-19 pandemic.
About Zuora, Inc.
Zuora provides the leading cloud-based subscription management platform that functions as a system of record for subscription businesses across all industries. Powering the Subscription Economy®, the Zuora® platform was architected specifically for dynamic, recurring subscription business models, and acts as an intelligent subscription management hub that automates and orchestrates the entire subscription order-to-revenue process seamlessly across billing and revenue recognition. Zuora serves more than 1,000 companies around the world, including Box, Ford, Penske Media Corporation, Schneider Electric, Siemens, Xplornet, and Zoom. Headquartered in Silicon Valley, Zuora also operates offices around the world in the U.S., EMEA and APAC. To learn more about the Zuora platform, please visit www.zuora.com.
© 2021 Zuora, Inc. All Rights Reserved. Zuora, Subscribed, Subscription Economy, Powering the Subscription Economy, and Subscription Economy Index are trademarks or registered trademarks of Zuora, Inc. Third party trademarks mentioned above are owned by their respective companies. Nothing in this press release should be construed to the contrary, or as an approval, endorsement or sponsorship by any third parties of Zuora, Inc. or any aspect of this press release.
SOURCE: Zuora Financial
ZUORA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands, except per share data)
(unaudited)
Three Months Ended
April 30,
2021
2020
Revenue:
Subscription
$
65,142
$
56,896
Professional services
15,187
17,002
Total revenue
80,329
73,898
Cost of revenue:
Subscription
15,643
13,615
Professional services
17,078
18,682
Total cost of revenue
32,721
32,297
Gross profit
47,608
41,601
Operating expenses:
Research and development
18,967
17,543
Sales and marketing
31,865
28,496
General and administrative
14,185
13,265
Total operating expenses
65,017
59,304
Loss from operations
(17,409)
(17,703)
Interest and other income, net
121
378
Loss before income taxes
(17,288)
(17,325)
Income tax provision
373
163
Net loss
(17,661)
(17,488)
Comprehensive loss:
Foreign currency translation adjustment
(85)
(427)
Unrealized (loss) gain on available-for-sale securities
(34)
157
Comprehensive loss
$
(17,780)
$
(17,758)
Net loss per share, basic and diluted
$
(0.15)
$
(0.15)
Weighted-average shares outstanding used in calculating net loss per share, basic and diluted
121,354
115,139
ZUORA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
April 30, 2021
January 31, 2021
Assets
Current assets:
Cash and cash equivalents
$
101,116
$
94,110
Short-term investments
96,282
92,484
Accounts receivable, net
59,484
78,860
Deferred commissions, current portion
13,160
12,712
Prepaid expenses and other current assets
16,590
15,574
Total current assets
286,632
293,740
Property and equipment, net
32,393
33,369
Operating lease right-of-use assets
48,666
47,085
Purchased intangibles, net
3,505
3,928
Deferred commissions, net of current portion
21,681
21,905
Goodwill
17,632
17,632
Other assets
3,618
3,848
Total assets
$
414,127
$
421,507
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
842
$
2,249
Accrued expenses and other current liabilities
12,961
14,550
Accrued employee liabilities
26,414
29,470
Debt, current portion
4,397
4,397
Deferred revenue, current portion
126,880
127,701
Operating lease liabilities, current portion
10,946
9,630
Total current liabilities
182,440
187,997
Debt, net of current portion
574
1,666
Deferred revenue, net of current portion
1,241
1,529
Operating lease liabilities, net of current portion
53,540
53,590
Deferred tax liabilities
1,920
1,929
Other long-term liabilities
2,905
2,883
Total liabilities
242,620
249,594
Stockholders’ equity:
Class A common stock
11
11
Class B common stock
1
1
Additional paid-in capital
652,501
635,127
Accumulated other comprehensive income
677
796
Accumulated deficit
(481,683)
(464,022)
Total stockholders’ equity
171,507
171,913
Total liabilities and stockholders’ equity
$
414,127
$
421,507
ZUORA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended April 30,
2021
2020
Cash flows from operating activities:
Net loss
$
(17,661)
$
(17,488)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, amortization and accretion
4,147
3,495
Stock-based compensation
13,797
10,884
Provision for credit losses
1,153
992
Amortization of deferred commissions
3,874
2,623
Reduction in carrying amount of right-of-use assets
2,342
2,286
Other
156
167
Changes in operating assets and liabilities:
Accounts receivable
18,223
8,518
Prepaid expenses and other assets
(1,169)
1,591
Deferred commissions
(4,200)
(2,275)
Accounts payable
(1,342)
2,096
Accrued expenses and other liabilities
(1,522)
(2,469)
Accrued employee liabilities
(3,056)
(386)
Deferred revenue
(1,109)
(3,908)
Operating lease liabilities
(3,382)
(3,175)
Net cash provided by operating activities
10,251
2,951
Cash flows from investing activities:
Purchases of property and equipment
(1,965)
(5,120)
Insurance proceeds for damaged property and equipment
344
—
Purchases of short-term investments
(26,687)
(10,901)
Sales of short-term investments
—
2,511
Maturities of short-term investments
22,692
38,500
Net cash (used in) provided by investing activities
(5,616)
24,990
Cash flows from financing activities:
Proceeds from issuance of common stock upon exercise of stock options, net of repurchases of unvested common stock
3,567
4,015
Principal payments on long-term debt
(1,111)
(1,110)
Net cash provided by financing activities
2,456
2,905
Effect of exchange rates on cash and cash equivalents
(85)
(427)
Net increase in cash and cash equivalents
7,006
30,419
Cash and cash equivalents, beginning of period
94,110
54,275
Cash and cash equivalents, end of period
$
101,116
$
84,694
ZUORA, INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except percentages and per share data)
(unaudited)
Three Months Ended April 30, 2021
GAAP
Stock-based Compensation
Amortization of Acquired Intangibles
Internal- use Software
Certain Litigation
Non-GAAP
Cost of revenue:
Cost of subscription revenue
$
15,643
$
(1,043)
$
(423)
$
(752)
$
—
$
13,425
Cost of professional services revenue
17,078
(2,001)
—
—
—
15,077
Gross profit
47,608
3,044
423
752
—
51,827
Operating expenses:
Research and development
18,967
(4,529)
—
802
—
15,240
Sales and marketing
31,865
(4,080)
—
—
—
27,785
General and administrative
14,185
(2,144)
—
117
(809)
11,349
Loss from operations
(17,409)
13,797
423
(167)
809
(2,547)
Net loss
$
(17,661)
$
13,797
$
423
$
(167)
$
809
$
(2,799)
Net loss per share, basic and diluted(1)
$
(0.15)
$
(0.02)
Gross margin
59
%
65
%
Subscription gross margin
76
%
79
%
Three Months Ended April 30, 2020
GAAP
Stock-based Compensation
Amortization of Acquired Intangibles
Internal-use Software
Non-GAAP
Cost of revenue:
Cost of subscription revenue
$
13,615
$
(852)
$
(423)
$
(149)
$
12,191
Cost of professional services revenue
18,682
(1,650)
—
—
17,032
Gross profit
41,601
2,502
423
149
44,675
Operating expenses:
Research and development
17,543
(3,542)
—
1,428
15,429
Sales and marketing
28,496
(3,005)
—
—
25,491
General and administrative
13,265
(1,835)
—
—
11,430
Loss from operations
(17,703)
10,884
423
(1,279)
(7,675)
Net loss
$
(17,488)
$
10,884
$
423
$
(1,279)
$
(7,460)
Net loss per share, basic and diluted(1)
$
(0.15)
$
(0.06)
Gross margin
56
%
60
%
Subscription gross margin
76
%
79
%
(1) GAAP and Non-GAAP net loss per share are calculated based upon 121,354 and 115,139 basic and diluted weighted-average shares of common stock for the three months ended April 30, 2021 and 2020, respectively.
ZUORA, INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
(in thousands)
(unaudited)
Free Cash Flow
Three Months Ended
April 30,
2021
2020
Net cash provided by operating activities
$
10,251
$
2,951
Less:
Purchases of property and equipment, net of insurance recoveries
(1,621)
(5,120)
Free cash flow
$
8,630
$
(2,169)
View source version on businesswire.com: https://www.businesswire.com/news/home/20210526006087/en/
Investor Relations Contact: Luana Wolk investorrelations@zuora.com 650-419-1377 Media Relations Contact: press@zuora.com 408-348-1087
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