Subscription revenue grew 14%
year-over-year, 16% on a constant currency basis Total
revenue grew 9% year-over-year, 11% on a constant currency
basis Operating cash flow grew to $5.4 million compared to
negative $4.8 million last year Adjusted free cash flow grew
to $4.0 million compared to negative $7.5 million last year
Zuora, Inc. (NYSE: ZUO), a leading monetization suite for modern
businesses, today announced financial results for its fiscal second
quarter ended July 31, 2023.
“The second quarter was another solid quarter. We executed on
our strategy and delivered on our guidance,” said Tien Tzuo,
Founder and CEO of Zuora. “As the world continues to embrace
recurring revenue, companies are coming to Zuora for our
differentiated, hard-to-replicate technology. Our amazing list of
customers is helping us build a long-term, durable business.”
Second Quarter Fiscal 2024 Financial Results:
- Revenue: Subscription revenue was $95.5 million, an
increase of 14% year-over-year and 16% on a constant currency
basis. Total revenue was $108.0 million, an increase of 9%
year-over-year and 11% on a constant currency basis.
- GAAP Loss from Operations: GAAP loss from operations was
$18.2 million, compared to a loss from operations of $30.2 million
in the second quarter of fiscal 2023.
- Non-GAAP Income (Loss) from Operations: Non-GAAP income
from operations was $9.6 million, compared to a non-GAAP loss from
operations of $0.2 million in the second quarter of fiscal
2023.
- GAAP Net Loss: GAAP net loss was $22.6 million, or 21%
of revenue, compared to a net loss of $29.9 million, or 30% of
revenue, in the second quarter of fiscal 2023. GAAP net loss per
share was $0.16 based on 138.6 million weighted-average shares
outstanding, compared to a net loss per share of $0.23 based on
130.3 million weighted-average shares outstanding in the second
quarter of fiscal 2023.
- Non-GAAP Net Income (Loss): Non-GAAP net income was
$10.0 million, compared to a non-GAAP net loss of $4.4 million in
the second quarter of fiscal 2023. Non-GAAP net income per share
was $0.07 based on 138.6 million weighted-average shares
outstanding, compared to a non-GAAP net loss per share of $0.03
based on 130.3 million weighted-average shares outstanding in the
second quarter of fiscal 2023.
- Cash Flow: Net cash provided by operating activities was
$5.4 million, compared to net cash used in operating activities of
$4.8 million in the second quarter of fiscal 2023.
- Adjusted Free Cash Flow: Adjusted free cash flow was
$4.0 million compared to negative $7.5 million in the second
quarter of fiscal 2023.
- Cash and Investments: Cash and cash equivalents and
short-term investments were $406.2 million as of July 31,
2023.
Descriptions of our non-GAAP financial measures are contained in
the section titled "Explanation of Non-GAAP Financial Measures"
below and reconciliations of GAAP and non-GAAP financial measures
are contained in the tables below.
Key Metrics and Business Highlights:
- Customers with annual contract value (ACV) equal to or greater
than $250,000 were 444, up from 407 as of July 31, 2022. Seven of
the deals that closed in the quarter ended July 31, 2023 had ACV
equal to or greater than $500,000, one of which had ACV greater
than $1.0 million.
- Dollar-based retention rate (DBRR) was 107%, compared to 111%
as of July 31, 2022.
- Annual Recurring Revenue (ARR) was $384.2 million compared to
$337.6 million as of July 31, 2022, representing ARR growth of
14%.
- Appointed Pete Hirsch as our Chief Product and Technology
Officer, formerly Chief Technology Officer at BlackLine.
- Announced multiple product enhancements at Subscribed Live,
including:
- Zephr, the world’s first Subscriber-Led Growth engine, which
has expanded beyond media and publishing to now support
Subscriber-Led Growth in SaaS, gaming, fitness, hospitality and
other markets. With Zephr’s new Dynamic Offers, companies can
present tailored offers that target each subscriber and deliver
ongoing value.
- Zuora for Consumption, which provides end-to-end billing and
revenue recognition specifically designed for the variability of
consumption, including numerous new pricing models. The solution
also allows companies to analyze complex consumption data to
improve pricing models and provide transparency into consumption
charges.
- Zuora Command Center, a central solution for Zuora admins to
monitor critical activity, manage multiple environments and
troubleshoot issues with the support of embedded AI.
- Zuora Warehouse and BYOW technology to power large-volume,
high-speed data analysis directly within Zuora, helping companies
better analyze the performance of their business and take action on
these insights.
- New customers and go-lives included DISH Wireless, The Atlantic
and Guesty.
Financial Outlook:
As of August 23, 2023, we are providing guidance for the third
quarter and full fiscal year 2024 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.
For the third quarter and full fiscal year 2024, Zuora currently
expects the following results:
Third Quarter
Fiscal 2024
Subscription revenue
$96.5M - $97.5M
$380.0M - $384.0M
Professional services revenue
$11.0M - $12.0M
$48.0M - $49.0M
Total revenue
$107.5M - $109.5M
$428.0M - $433.0M
Non-GAAP income from operations1
$10.0M - $11.0M
$34.0M - $36.0M
Non-GAAP net income per share1,2
$0.05 - $0.06
$0.21 - $0.23
ARR growth3
12% - 15%
Dollar-based Retention Rate3
107% - 109%
Adjusted Free Cash Flow1
$28.0M+
(1) For information on how we derive our
non-GAAP financial measures, see the section titled "Explanation of
Non-GAAP Financial Measures" below. Zuora has not reconciled its
guidance for non-GAAP income from operations to GAAP loss from
operations or non-GAAP net income per share to GAAP net loss per
share because stock-based compensation expense cannot be reasonably
calculated or predicted at this time. Additionally, adjusted free
cash flow has not been reconciled to operating cash flows as it
cannot be reasonably calculated or predicted at this time.
Accordingly, a reconciliation of these non-GAAP measures is not
available without unreasonable effort.
(2) Non-GAAP net income per share was
computed assuming 141.6 million and 140.3 million weighted-average
shares outstanding for the third quarter and full fiscal year 2024,
respectively.
(3) Refer to the "Explanation of Key
Operational and Financial Metrics" section below for how these
metrics are calculated.
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.
Explanation of Key Operational and Financial Metrics:
Customers with annual contract value (ACV) equal to or greater
than $250,000. 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. We define the number of customers at the end of any
particular period as the number of parties or organizations that
have entered into a distinct subscription contract with us and for
which the term has not ended. Each party with whom we have entered
into a distinct subscription contract is considered a unique
customer, and in some cases, there may be more than one customer
within a single organization.
Dollar-based Retention Rate (DBRR). We calculate DBRR 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.
Annual Recurring Revenue (ARR). ARR represents the annualized
recurring value at the time of initial booking or contract
modification for all active subscription contracts at the end of a
reporting period. ARR excludes the value of non-recurring revenue
such as professional services revenue as well as contracts with new
customers with a term of less than one year. ARR should be viewed
independently of revenue and deferred revenue, and is not intended
to be a substitute for, or combined with, any of these items. ARR
growth is calculated by dividing the ARR as of a period end by the
ARR for the corresponding period end of the prior fiscal year.
Webcast and Conference Call Information:
Zuora will host a conference call for investors on August 23,
2023 at 2:00 p.m. Pacific Time / 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 through August 21, 2024. The call can also be accessed
live via phone by the toll-free dial-in number: 1-888-440-5655 or
toll dial-in number: 1-646-960-0338 with conference ID 8022374. An
audio replay will be available shortly after the call and can be
accessed by dialing 1-800-770-2030 or 1-647-362-9199 with
conference ID 8022374 available from August 23, 2023 at 4:00 p.m.
PT to August 30, 2023 at 11:59 p.m. PT.
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: subscription revenue and total revenue that
exclude the impact of foreign currency exchange rate fluctuations
(constant currency basis); non-GAAP cost of subscription revenue;
non-GAAP subscription gross margin; non-GAAP cost of professional
services revenue; non-GAAP professional services gross margin;
non-GAAP gross profit; non-GAAP gross margin; non-GAAP income
(loss) from operations; non-GAAP operating margin; non-GAAP net
income (loss); non-GAAP net income (loss) per share; and adjusted
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 non-GAAP financial 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:
- Stock-based compensation expense. We exclude stock-based
compensation expense, which is a non-cash expense, because we
believe that excluding this item provides meaningful supplemental
information regarding operational performance. In particular,
stock-based compensation expense is not comparable across companies
given it is calculated using a variety of valuation methodologies
and subjective assumptions.
- Amortization of acquired intangible assets. We exclude
amortization of acquired intangible assets, which is a non-cash
expense, because we do not believe it has a direct correlation to
the operation of our business.
- Charitable contributions. We exclude expenses associated with
charitable donations of our common stock. We believe that excluding
these non-cash expenses allows investors to make more meaningful
comparisons between our operating results and those of other
companies.
- Shareholder litigation. We exclude non-recurring charges and
benefits, net of insurance recoveries, including litigation
expenses and settlements, related to shareholder litigation matters
that are outside of the ordinary course of our business. We believe
these charges and benefits do not have a direct correlation to the
operations of our business and may vary in size depending on the
timing and results of such litigation and related settlements.
- Asset impairment. We exclude non-cash charges for impairment of
assets, including impairments related to internal-use software and
office leases. Impairment charges can vary significantly in terms
of amount and timing and we do not consider these charges
indicative of our current or past operating performance. Moreover,
we believe that excluding the effects of these charges allows
investors to make more meaningful comparisons between our operating
results and those of other companies.
- Change in fair value of warrant liabilities. We exclude the
change in fair value of warrant liabilities, which is a non-cash
gain or loss, as it can fluctuate significantly with changes in
Zuora's stock price and market volatility, and does not reflect the
underlying cash flows or operational results of the business.
- Acquisition-related transactions. We exclude
acquisition-related transactions (including integration-related
charges) that are not related to our ongoing operations, including
expenses we incurred and gains or losses recognized on contingent
consideration related to our acquisition of Zephr. We do not
consider these transactions reflective of our core business or
ongoing operating performance.
- Workforce reduction. We exclude charges related to the
workforce reduction plan we approved in November 2022, including
severance, health care and related expenses. We believe these
charges are not indicative of our continuing operations.
Additionally, we disclose "adjusted free cash flow", which is a
non-GAAP measure that excludes acquisition-related costs (including
integration-related charges) and expenses related to non-ordinary
course litigation (including settlement charges) from GAAP
operating cash flows, and includes capital expenditures. We believe
this measure is meaningful to investors because management reviews
cash flows generated from operations excluding such expenditures
that are not related to our ongoing operations.
Zuora also provides subscription revenue and total revenue,
including year-over-year growth rates, adjusted to remove the
impact of foreign currency rate fluctuations, which we refer to as
constant currency. We believe providing revenue on a constant
currency basis helps our investors to better understand our
underlying performance. We calculate constant currency in a given
period by applying the average currency exchange rates in the
comparable period of the prior year to the local currency revenue
in the current period.
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.
Forward-Looking Statements:
Zuora’s Financial Outlook and other statements in this release
that refer to future plans and expectations are forward-looking
statements that involve a number of risks and uncertainties. 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-Q filed with the
Securities and Exchange Commission on June 1, 2023 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:
we may be unable to attract new customers and expand sales to
existing customers; adverse impacts on our business and financial
condition due to macroeconomic or market conditions, such as
inflation, rising interest rates, and banking system instability;
we may not be able to manage our future growth and profitability
plans effectively; monetization platform software and related
solutions, as well as consumer adoption of products and services
that are provided through such solutions, may develop slower than
we expect; the risk of currency exchange rate fluctuations; the
risk of loss of key employees; we face intense competition in our
markets and may not be able to compete effectively; we have a
history of net losses and may not achieve or sustain profitability;
challenges related to growing our relationships with strategic
partners such as systems integrators and their effectiveness in
selling our products; our products may fail to gain, or lose,
market acceptance; our product development efforts may be
unsuccessful; we face risks with our debt obligations; 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; customers may fail to successfully
deploy our solution after entering into a subscription agreement
with us; our sales and product initiatives may not be successful or
the expected benefits of such initiatives may not be achieved in a
timely manner; our security measures may be breached or our
products may be perceived as not being secure; we may be unable to
adequately protect our intellectual property; we may experience
interruptions or performance problems, including a service outage,
associated with our technology; litigation and related costs;
geopolitical conflicts or destabilizing events, such as the ongoing
conflict in Ukraine; other business effects, including those
related to industry, market, economic, political, regulatory and
global health conditions 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.
About Zuora, Inc.
Zuora provides a leading monetization suite for modern
businesses across all industries, enabling companies to unlock and
grow customer-centric business models. Zuora serves as an
intelligent hub that monetizes and orchestrates the complete quote
to cash and revenue recognition process at scale. Through its
industry leading technology and expertise, Zuora helps more than
1,000 companies around the world, including BMC Software, Box,
Caterpillar, General Motors, Penske Media Corporation, Schneider
Electric, Siemens and Zoom nurture and monetize direct, digital
customer relationships. Headquartered in Silicon Valley, Zuora
operates offices around the world in the Americas, EMEA and APAC.
To learn more about the Zuora monetization suite, please visit
www.zuora.com.
© 2023 Zuora, Inc. All Rights Reserved. Zuora, Subscribed,
Subscription Economy, Powering the Subscription Economy,
Subscription Economy Index, Zephr, and Subscription Experience
Platform 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
July 31,
Six Months Ended
July 31,
2023
2022
2023
2022
Revenue:
Subscription
$
95,473
$
83,811
$
185,184
$
162,311
Professional services
12,575
14,964
25,959
29,663
Total revenue
108,048
98,775
211,143
191,974
Cost of revenue:
Subscription1
21,338
19,572
41,926
38,297
Professional services1
16,443
19,077
33,201
36,587
Total cost of revenue
37,781
38,649
75,127
74,884
Gross profit
70,267
60,126
136,016
117,090
Operating expenses:
Research and development1
26,256
26,354
51,924
49,226
Sales and marketing1
42,799
45,146
84,243
85,603
General and administrative1
19,451
18,816
38,267
36,106
Total operating expenses
88,506
90,316
174,434
170,935
Loss from operations
(18,239
)
(30,190
)
(38,418
)
(53,845
)
Change in fair value of warrant
liability
(4,786
)
4,524
(4,756
)
8,896
Interest expense
(4,607
)
(4,419
)
(8,994
)
(6,203
)
Interest and other income (expense),
net
5,657
704
11,367
(1,089
)
Loss before income taxes
(21,975
)
(29,381
)
(40,801
)
(52,241
)
Income tax provision
587
529
1,056
837
Net loss
(22,562
)
(29,910
)
(41,857
)
(53,078
)
Comprehensive loss:
Foreign currency translation
adjustment
(404
)
(316
)
(687
)
(675
)
Unrealized gain (loss) on
available-for-sale securities
172
(278
)
512
(676
)
Comprehensive loss
$
(22,794
)
$
(30,504
)
$
(42,032
)
$
(54,429
)
Net loss per share, basic and diluted
$
(0.16
)
$
(0.23
)
$
(0.30
)
$
(0.41
)
Weighted-average shares outstanding used
in calculating net loss per share, basic and diluted
138,605
130,280
137,417
129,384
_____________________
(1) Stock-based compensation expense was
recorded in the following cost and expense categories:
Three Months Ended
July 31,
Six Months Ended
July 31,
2023
2022
2023
2022
Cost of subscription revenue
$
2,180
$
2,281
$
4,539
$
4,080
Cost of professional services revenue
3,229
3,690
6,250
6,707
Research and development
6,752
7,465
13,496
13,431
Sales and marketing
8,689
9,959
16,666
17,415
General and administrative
5,798
4,818
10,921
9,405
Total stock-based compensation expense
$
26,648
$
28,213
$
51,872
$
51,038
ZUORA, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
July 31, 2023
January 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
323,281
$
203,239
Short-term investments
82,953
183,006
Accounts receivable, net
81,225
91,740
Deferred commissions, current portion
15,330
16,282
Prepaid expenses and other current
assets
26,124
24,285
Total current assets
528,913
518,552
Property and equipment, net
25,915
27,159
Operating lease right-of-use assets
26,628
22,768
Purchased intangibles, net
11,724
13,201
Deferred commissions, net of current
portion
27,013
28,250
Goodwill
57,148
53,991
Other assets
4,511
4,677
Total assets
$
681,852
$
668,598
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
1,016
$
1,073
Accrued expenses and other current
liabilities
98,770
103,678
Accrued employee liabilities
30,355
30,483
Deferred revenue, current portion
164,564
167,145
Operating lease liabilities, current
portion
7,895
9,240
Total current liabilities
302,600
311,619
Debt, net of current portion
214,401
210,403
Deferred revenue, net of current
portion
1,175
442
Operating lease liabilities, net of
current portion
39,865
37,924
Deferred tax liabilities
3,720
3,717
Other long-term liabilities
7,364
7,333
Total liabilities
569,125
571,438
Stockholders’ equity:
Class A common stock
13
13
Class B common stock
1
1
Additional paid-in capital
917,081
859,482
Accumulated other comprehensive loss
(1,094
)
(919
)
Accumulated deficit
(803,274
)
(761,417
)
Total stockholders’ equity
112,727
97,160
Total liabilities and stockholders’
equity
$
681,852
$
668,598
ZUORA, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended July
31,
2023
2022
Cash flows from operating
activities:
Net loss
$
(41,857
)
$
(53,078
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation, amortization and
accretion
8,892
8,882
Stock-based compensation
51,872
51,038
Provision for credit losses
279
1,134
Donation of common stock to charitable
foundation
—
1,000
Amortization of deferred commissions
9,746
9,346
Reduction in carrying amount of
right-of-use assets
3,116
4,070
Change in fair value of warrant
liability
4,756
(8,896
)
Other
186
267
Changes in operating assets and
liabilities:
Accounts receivable
9,726
13,436
Prepaid expenses and other assets
(4,317
)
(2,823
)
Deferred commissions
(7,647
)
(10,629
)
Accounts payable
(63
)
692
Accrued expenses and other liabilities
(5,102
)
1,848
Accrued employee liabilities
(128
)
(3,228
)
Deferred revenue
(1,848
)
(4,404
)
Operating lease liabilities
(7,630
)
(6,473
)
Net cash provided by operating
activities
19,981
2,182
Cash flows from investing
activities:
Purchases of property and equipment
(3,838
)
(6,084
)
Purchases of short-term investments
(61,745
)
(195,685
)
Maturities of short-term investments
165,128
55,263
Cash paid for acquisition
(4,524
)
—
Net cash provided by (used in) investing
activities
95,021
(146,506
)
Cash flows from financing
activities:
Proceeds from issuance of convertible
senior notes, net of issuance costs
—
233,901
Proceeds from issuance of common stock
upon exercise of stock options
962
1,522
Proceeds from issuance of common stock
under employee stock purchase plan
4,765
4,485
Principal payments on debt
—
(1,480
)
Net cash provided by financing
activities
5,727
238,428
Effect of exchange rates on cash and cash
equivalents
(687
)
(675
)
Net increase in cash and cash
equivalents
120,042
93,429
Cash and cash equivalents, beginning of
period
203,239
113,507
Cash and cash equivalents, end of
period
$
323,281
$
206,936
ZUORA, INC.
RECONCILIATION OF SELECTED
GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except
percentages)
(unaudited)
Subscription Gross Margin
Three Months Ended July
31,
Six Months Ended July
31,
2023
2022
2023
2022
Reconciliation of cost of subscription
revenue:
GAAP cost of subscription revenue
$
21,338
$
19,572
$
41,926
$
38,297
Less:
Stock-based compensation
(2,180
)
(2,281
)
(4,539
)
(4,080
)
Amortization of acquired intangibles
(738
)
(372
)
(1,476
)
(926
)
Workforce reduction
—
—
(38
)
—
Non-GAAP cost of subscription revenue
$
18,420
$
16,919
$
35,873
$
33,291
GAAP subscription gross margin
78
%
77
%
77
%
76
%
Non-GAAP subscription gross margin
81
%
80
%
81
%
79
%
Professional Services Gross
Margin
Three Months Ended July
31,
Six Months Ended July
31,
2023
2022
2023
2022
Reconciliation of cost of professional
services revenue:
GAAP cost of professional services
revenue
$
16,443
$
19,077
$
33,201
$
36,587
Less:
Stock-based compensation
(3,229
)
(3,690
)
(6,250
)
(6,707
)
Workforce reduction
(46
)
—
(46
)
—
Non-GAAP cost of professional services
revenue
$
13,168
$
15,387
$
26,905
$
29,880
GAAP professional services gross
margin
(31
)%
(27
)%
(28
)%
(23
)%
Non-GAAP professional services gross
margin
(5
)%
(3
)%
(4
)%
(1
)%
ZUORA, INC.
RECONCILIATION OF SELECTED
GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
(in thousands, except
percentages)
(unaudited)
Total Gross Margin
Three Months Ended July
31,
Six Months Ended July
31,
2023
2022
2023
2022
Reconciliation of gross profit:
GAAP gross profit
$
70,267
$
60,126
$
136,016
$
117,090
Add:
Stock-based Compensation
5,409
5,971
10,789
10,787
Amortization of Acquired Intangibles
738
372
1,476
926
Workforce Reduction
46
—
84
—
Non-GAAP gross profit
$
76,460
$
66,469
$
148,365
$
128,803
GAAP gross margin
65
%
61
%
64
%
61
%
Non-GAAP gross margin
71
%
67
%
70
%
67
%
Operating (Loss) Income and Operating
Margin
Three Months Ended July
31,
Six Months Ended July
31,
2023
2022
2023
2022
Reconciliation of (loss) income from
operations:
GAAP loss from operations
$
(18,239
)
$
(30,190
)
$
(38,418
)
$
(53,845
)
Add:
Stock-based Compensation
26,648
28,213
51,872
51,038
Amortization of Acquired Intangibles
738
372
1,476
926
Charitable Contribution
—
1,000
—
1,000
Shareholder Litigation
208
110
243
230
Acquisition-related Transactions
158
344
192
344
Workforce Reduction
46
—
265
—
Non-GAAP income (loss) from operations
$
9,559
$
(151
)
$
15,630
$
(307
)
GAAP operating margin
(17
)%
(31
)%
(18
)%
(28
)%
Non-GAAP operating margin
9
%
—
%
7
%
—
%
ZUORA, INC.
RECONCILIATION OF SELECTED
GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
(in thousands, except per
share data)
(unaudited)
Net (Loss) Income and Net (Loss) Income
Per Share
Three Months Ended July
31,
Six Months Ended July
31,
2023
2022
2023
2022
Reconciliation of net (loss) income:
GAAP net loss
$
(22,562
)
$
(29,910
)
$
(41,857
)
$
(53,078
)
Add:
Stock-based Compensation
26,648
28,213
51,872
51,038
Amortization of Acquired Intangibles
738
372
1,476
926
Charitable Contribution
—
1,000
—
1,000
Shareholder Litigation
208
110
243
230
Change in Fair Value of Warrant
Liability
4,786
(4,524
)
4,756
(8,896
)
Acquisition-related Transactions
158
344
192
344
Workforce Reduction
46
—
265
—
Non-GAAP net income (loss)
$
10,022
$
(4,395
)
$
16,947
$
(8,436
)
GAAP net loss per share, basic and
diluted1
$
(0.16
)
$
(0.23
)
$
(0.30
)
$
(0.41
)
Non-GAAP net income (loss) per share,
basic and diluted1
$
0.07
$
(0.03
)
$
0.12
$
(0.07
)
_________________________________
(1) For the three months ended July 31,
2023 and 2022, GAAP and Non-GAAP net (loss) income per share are
calculated based upon 138.6 million and 130.3 million basic and
diluted weighted-average shares of common stock, respectively. For
the six months ended July 31, 2023 and 2022, GAAP and Non-GAAP net
(loss) income per share are calculated based upon 137.4 million and
129.4 million basic and diluted weighted-average shares of common
stock, respectively.
ZUORA, INC.
RECONCILIATION OF SELECTED
GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
(in thousands, except
percentages)
(unaudited)
Adjusted Free Cash Flow
Three Months Ended July
31,
Six Months Ended July
31,
2023
2022
2023
2022
Net cash provided by (used in) operating
activities (GAAP)
$
5,388
$
(4,801
)
$
19,981
$
2,182
Add:
Shareholder litigation
726
161
753
183
Acquisition-related costs
91
—
107
—
Less:
Purchases of property and equipment
(2,181
)
(2,821
)
(3,838
)
(6,084
)
Adjusted free cash flow (non-GAAP)
$
4,024
$
(7,461
)
$
17,003
$
(3,719
)
Net cash provided by (used in) investing
activities (GAAP)
$
74,719
$
(142,619
)
$
95,021
$
(146,506
)
Net cash provided by financing activities
(GAAP)
$
5,190
$
4,046
$
5,727
$
238,428
Constant Currency Revenue
Three Months Ended July
31,
Six Months Ended July
31,
2023
2022
Growth Rates
2023
2022
Growth Rates
Subscription revenue (GAAP)
$
95,473
$
83,811
14
%
$
185,184
$
162,311
14
%
Effects of foreign currency rate
fluctuations
2,032
4,773
Subscription revenue on a constant
currency basis (Non-GAAP)
$
97,505
16
%
$
189,957
17
%
Total revenue (GAAP)
$
108,048
$
98,775
9
%
$
211,143
$
191,974
10
%
Effects of foreign currency rate
fluctuations
2,003
4,881
Total revenue on a constant currency basis
(Non-GAAP)
$
110,051
11
%
$
216,024
13
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230823491412/en/
Investor Relations Contact: Carolyn Bass
investorrelations@zuora.com 415-378-6114
Media Relations Contact: Margaret Pack press@zuora.com
619-609-3919
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