Zuora, Inc. (NYSE: ZUO), a leading monetization suite for modern
business, today announced financial results for its fiscal third
quarter ended October 31, 2024.
Third Quarter Fiscal 2025 Financial Results:
- Revenue: Subscription revenue was $105.3 million, an
increase of 7% year-over-year. Total revenue was $116.9 million, an
increase of 6% year-over-year.
- GAAP Loss from Operations: GAAP loss from operations was
$11.7 million, compared to a loss from operations of $8.8 million
in the third quarter of fiscal 2024.
- Non-GAAP Income from Operations: Non-GAAP income from
operations was $25.1 million, compared to non-GAAP income from
operations of $16.0 million in the third quarter of fiscal
2024.
- GAAP Net Loss: GAAP net loss was $32.2 million, or 28%
of revenue, compared to a net loss of $5.5 million, or 5% of
revenue, in the third quarter of fiscal 2024. GAAP net loss per
share was $0.21 based on 152.3 million weighted-average shares
outstanding, compared to a net loss per share of $0.04 based on
141.5 million weighted-average shares outstanding in the third
quarter of fiscal 2024. The GAAP net loss reflects increased costs
associated with our proposed acquisition, including a debt
redemption liability of $20.2 million as of October 31, 2024
associated with our obligation to repurchase a portion of our 2029
Notes pursuant to our proposed acquisition, and $9.8 million of
legal, consulting, and other transaction related costs. Refer below
for further information on the proposed acquisition.
- Non-GAAP Net Income: Non-GAAP net income was $24.8
million, compared to non-GAAP net income of $12.3 million in the
third quarter of fiscal 2024. Non-GAAP net income per share was
$0.16 based on 152.3 million weighted-average shares outstanding,
compared to non-GAAP net income per share of $0.09 based on 141.5
million weighted-average shares outstanding in the third quarter of
fiscal 2024.
- Cash Flow: Net cash provided by operating activities was
$22.4 million, compared to net cash used in operating activities of
$55.7 million in the third quarter of fiscal 2024.
- Adjusted Free Cash Flow: Adjusted free cash flow was
$25.5 million compared to $12.7 million in the third quarter of
fiscal 2024.
- Cash and Investments: Cash and cash equivalents and
short-term investments were $558.5 million as of October 31,
2024.
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.
Proposed Acquisition; Conference Call and Guidance
On October 17, 2024, we announced that Zuora entered into a
definitive agreement to be acquired by Silver Lake, the global
leader in technology investing, in partnership with an affiliate of
GIC Pte. Ltd. (“GIC”). The transaction is valued at $1.7 billion,
with Silver Lake and GIC to acquire all outstanding shares of Zuora
common stock for $10.00 per share in cash. The acquisition is
expected to close in the first calendar quarter of 2024, subject to
customary closing conditions and approvals, including the receipt
of the required regulatory approvals. Upon completion of the
transaction, Zuora will become a privately held company.
Given the proposed acquisition of Zuora, we will not be holding
a conference call or live webcast to discuss Zuora's third quarter
of fiscal 2025 financial results, we will not be providing any
forward looking guidance, and we are withdrawing all previously
provided goals, outlook, and guidance.
Key Operational and Financial Metrics:
- Customers with annual contract value (ACV) equal to or greater
than $250,000 were 451, compared to 453 as of October 31,
2023.
- Dollar-based retention rate (DBRR) was 103%, compared to 108%
as of October 31, 2023.
- Annual recurring revenue (ARR) was $419.9 million compared to
$396.0 million as of October 31, 2023, representing ARR growth of
6%.
Explanation of Key Operational and Financial 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. 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.
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
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 from
operations; non-GAAP operating margin; non-GAAP net income;
non-GAAP net income 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 matters. We exclude non-recurring charges and
benefits, net of insurance recoveries, including litigation
expenses, settlements and other legal, consulting and advisory
fees, related to shareholder matters that are outside of the
ordinary course of our business, including expenses related to a
cooperation agreement. 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, results and resolution of
such litigation, settlements, agreements or other shareholder
matters.
- Asset impairment. We exclude non-cash charges for impairment of
assets, including impairments related to internal-use software,
office leases, and acquired intangible assets. 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 debt derivative and warrant
liabilities. We exclude fair value adjustments related to the debt
derivative and warrant liabilities, which are non-cash gains or
losses, as they can fluctuate significantly with changes in Zuora's
stock price and market volatility, and do not reflect the
underlying cash flows or operational results of the business.
- Acquisition-related expenses. We exclude acquisition-related
expenses (including integration-related charges) that are not
related to our ongoing operations. These expenses include gains or
losses recognized on contingent consideration related to
acquisitions, including costs associated with our proposed
acquisition. We do not consider these transaction expenses as
reflective of our core business or ongoing operating
performance.
- Workforce reductions. We exclude charges related to workforce
reduction plans, 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 includes adjustments to operating cash flows
for cash impacts related to Shareholder matters and
Acquisition-related expenses described above, and net purchases of
property and equipment. We include the impact of net purchases of
property and equipment in our adjusted free cash flow calculation
because we consider these capital expenditures to be a necessary
component of our ongoing operations. 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.
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:
This press release contains forward-looking statements that
involve a number of risks and uncertainties. Words such as
“believes,” “may,” “will,” “determine,” “estimates,” “potential,”
“continues,” “anticipates,” “intends,” “expects,” “could,” “would,”
“projects,” “plans,” “targets,” “strategy,” “likely,” and
variations of such words and similar expressions are intended to
identify forward-looking statements. Forward-looking statements in
this release include statements regarding the proposed acquisition
of Zuora, including the expected timing of the closing of the
acquisition, and expectations for Zuora following the completion of
the acquisition. 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 August
29, 2024 as well as other documents that may be filed by us from
time to time with the Securities and Exchange Commission, including
in our Quarterly Report on Form 10-Q for the quarter ended October
31, 2024. In particular, the following factors, among others, could
cause results to differ materially from those expressed or implied
by such forward-looking statements: the possibility that the
closing conditions to the proposed acquisition are not satisfied
(or waived), including the risk that required approvals from
Zuora’s stockholders for the proposed acquisition or required
regulatory approvals to consummate the acquisition are not obtained
in a timely manner (or at all); the outcome of the current
complaint and any potential litigation relating to the proposed
acquisition; uncertainties as to the timing of the consummation of
the proposed acquisition; the ability of each party to consummate
the proposed acquisition; our ability to attract new customers and
retain and expand sales to existing customers; our ability to
manage our future revenue and profitability plans effectively;
adoption of monetization platform software and related solutions,
as well as consumer adoption of products and services that are
provided through such solutions; our ability to develop and release
new products and services, or successful enhancements, new features
and modifications; challenges related to growing our relationships
with strategic partners; loss of key employees; our ability to
compete in our markets; adverse impacts on our business and
financial condition due to macroeconomic or market conditions; the
impact of actions to improve operational efficiencies and operating
costs; our history of net losses and ability to achieve or sustain
profitability; market acceptance of our products; the success of
our product development efforts; risks associated with currency
exchange rate fluctuations; risks associated with our debt
obligations; successful deployment of our solutions by customers
after entering into a subscription agreement with us; the success
of our sales and product initiatives; our security measures; our
ability to adequately protect our intellectual property;
interruptions or performance problems; litigation and other
shareholder related costs; the anticipated benefits of acquisitions
and ability to integrate operations and technology of any acquired
company; geopolitical conflicts or destabilizing events; 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.
Important Information and Where to Find It
In connection with the proposed acquisition, Zuora has filed
with the Securities and Exchange Commission (the “SEC”) a proxy
statement in preliminary form on November 25, 2024, a definitive
version of which will be mailed or otherwise provided to its
stockholders. The Company and affiliates of the Company have
jointly filed a transaction statement on Schedule 13E-3 (the
Schedule 13E-3). Zuora may also file other documents with the SEC
regarding the potential transaction. BEFORE MAKING ANY VOTING
DECISION, ZUORA’S STOCKHOLDERS ARE URGED TO CAREFULLY READ THE
PROXY STATEMENT AND THE SCHEDULE 13E-3 IN THEIR ENTIRETY AND ANY
OTHER DOCUMENTS FILED WITH THE SEC AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS THERETO IN CONNECTION WITH THE PROPOSED TRANSACTION OR
INCORPORATED BY REFERENCE THEREIN BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE
PARTIES TO THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors
and security holders may obtain free copies of the proxy statement,
the Schedule 13E-3 and other documents that Zuora files with the
SEC from the SEC’s website at www.sec.gov and Zuora’s website at
investor.zuora.com. In addition, the proxy statement, the Schedule
13E-3 and other documents filed by Zuora with the SEC (when
available) may be obtained from Zuora free of charge by directing a
request to Zuora’s Investor Relations at
investorrelations@zuora.com.
Participants in the Solicitation
Zuora and certain of its directors, executive officers and
employees may be deemed to be participants in the solicitation of
proxies from Zuora’s stockholders in connection with the proposed
transaction. Information regarding the persons who may, under the
rules of the SEC, be deemed to be participants in the solicitation
of the stockholders of Zuora in connection with the proposed
transaction, including a description of their respective direct or
indirect interests, by security holdings or otherwise will be set
forth in the proxy statement and Schedule 13E-3 and other materials
to be filed with the SEC. You may also find additional information
about Zuora’s directors and executive officers in Zuora’s proxy
statement for its 2024 Annual Meeting of Stockholders, which was
filed with the SEC on May 16, 2024 (the “Annual Meeting Proxy
Statement”). To the extent holdings of securities by potential
participants (or the identity of such participants) have changed
since the information printed in the Annual Meeting Proxy
Statement, such information has been or will be reflected in
Zuora’s Statements of Change in Ownership on Forms 3 and 4 filed
with the SEC. You can obtain free copies of these documents from
Zuora using the contact information above.
About Zuora, Inc.
Zuora provides a leading monetization suite to build, run and
grow a modern business through a dynamic mix of usage-based models,
subscription bundles and everything in between. From pricing and
packaging, to billing, payments and revenue accounting, Zuora’s
flexible, modular software platform is designed to help companies
evolve monetization strategies with customer demand. More than
1,000 customers around the world, including BMC Software, Box,
Caterpillar, General Motors, The New York Times, Schneider Electric
and Zoom use Zuora’s leading combination of technology and
expertise to turn recurring relationships and recurring revenue
into recurring growth. Zuora is headquartered in Silicon Valley
with offices in the Americas, EMEA and APAC. To learn more, please
visit zuora.com.
© 2024 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, INC.
ZUORA, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
(in thousands, except per
share data)
(unaudited)
Three Months Ended
October 31,
Nine Months Ended
October 31,
2024
2023
2024
2023
Revenue:
Subscription
$
105,253
$
98,048
$
308,263
$
283,232
Professional services
11,676
11,801
33,831
37,760
Total revenue
116,929
109,849
342,094
320,992
Cost of revenue:
Subscription1
23,954
20,378
67,207
62,304
Professional services1
14,383
14,650
43,483
47,851
Total cost of revenue
38,337
35,028
110,690
110,155
Gross profit
78,592
74,821
231,404
210,837
Operating expenses:
Research and development1
26,833
27,504
76,853
79,428
Sales and marketing1
36,597
40,245
108,579
124,488
General and administrative1
26,880
15,893
71,351
54,160
Total operating expenses
90,310
83,642
256,783
258,076
Loss from operations
(11,718
)
(8,821
)
(25,379
)
(47,239
)
Change in fair value of debt derivative
and warrant liabilities
(20,174
)
6,997
(29,115
)
2,241
Interest expense
(7,045
)
(5,610
)
(20,781
)
(14,604
)
Interest and other income (expense),
net
6,505
2,272
19,988
13,639
Loss before income taxes
(32,432
)
(5,162
)
(55,287
)
(45,963
)
Income tax (benefit) provision
(226
)
340
(2,152
)
1,396
Net loss
(32,206
)
(5,502
)
(53,135
)
(47,359
)
Comprehensive loss:
Foreign currency translation
adjustment
462
(696
)
386
(1,383
)
Unrealized gain (loss) on
available-for-sale securities
248
(18
)
63
494
Comprehensive loss
$
(31,496
)
$
(6,216
)
$
(52,686
)
$
(48,248
)
Net loss per share, basic and diluted
$
(0.21
)
$
(0.04
)
$
(0.36
)
$
(0.34
)
Weighted-average shares outstanding used
in calculating net loss per share, basic and diluted
152,263
141,488
149,457
138,789
_____________________
(1) Stock-based compensation expense was recorded in the
following cost and expense categories:
Three Months Ended
October 31,
Nine Months Ended
October 31,
2024
2023
2024
2023
Cost of subscription revenue
$
2,331
$
2,350
$
6,291
$
6,889
Cost of professional services revenue
2,598
2,747
7,359
8,997
Research and development
7,697
7,165
21,680
20,661
Sales and marketing
7,613
8,191
20,609
24,857
General and administrative
4,694
5,648
13,163
16,569
Total stock-based compensation expense
$
24,933
$
26,101
$
69,102
$
77,973
ZUORA, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
October 31, 2024
January 31, 2024
Assets
Current assets:
Cash and cash equivalents
$
277,615
$
256,065
Short-term investments
280,909
258,120
Accounts receivable, net
82,414
124,602
Deferred commissions, current portion
15,995
15,870
Prepaid expenses and other current
assets
25,183
23,261
Total current assets
682,116
677,918
Property and equipment, net
27,403
25,961
Operating lease right-of-use assets
20,591
22,462
Purchased intangibles, net
23,146
10,082
Deferred commissions, net of current
portion
24,941
27,250
Goodwill
73,903
56,657
Other assets
4,972
3,506
Total assets
$
857,072
$
823,836
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
761
$
3,161
Accrued expenses and other current
liabilities
45,167
32,157
Accrued employee liabilities
29,860
37,722
Deferred revenue, current portion
177,436
199,615
Operating lease liabilities, current
portion
7,030
6,760
Total current liabilities
260,254
279,415
Long-term debt
368,348
359,525
Deferred revenue, net of current
portion
860
2,802
Operating lease liabilities, net of
current portion
32,573
37,100
Deferred tax liabilities
4,066
3,725
Other long-term liabilities
6,781
7,582
Total liabilities
672,882
690,149
Stockholders’ equity:
Class A common stock
15
14
Class B common stock
1
1
Additional paid-in capital
1,067,329
964,141
Accumulated other comprehensive loss
(410
)
(859
)
Accumulated deficit
(882,745
)
(829,610
)
Total stockholders’ equity
184,190
133,687
Total liabilities and stockholders’
equity
$
857,072
$
823,836
ZUORA, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
October 31,
2024
2023
Cash flows from operating
activities:
Net loss
$
(53,135
)
$
(47,359
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation, amortization and
accretion
14,715
13,684
Stock-based compensation
69,102
77,973
Provision for credit losses
2,117
457
Amortization of deferred commissions
13,946
14,415
Reduction in carrying amount of
right-of-use assets
3,470
4,876
Change in fair value of debt derivative
and warrant liabilities
29,115
(2,241
)
Other
(2,418
)
2,630
Changes in operating assets and
liabilities:
Accounts receivable
40,149
12,476
Prepaid expenses and other assets
(2,657
)
878
Deferred commissions
(12,107
)
(12,013
)
Accounts payable
(2,529
)
(634
)
Accrued expenses and other liabilities
6,843
(82,904
)
Accrued employee liabilities
(7,986
)
509
Deferred revenue
(24,439
)
(7,461
)
Operating lease liabilities
(7,476
)
(10,962
)
Net cash provided by (used in) operating
activities
66,710
(35,676
)
Cash flows from investing
activities:
Purchases of property and equipment
(9,252
)
(6,913
)
Purchases of short-term investments
(240,093
)
(66,665
)
Maturities of short-term investments
222,279
175,128
Cash paid for acquisition, net of cash
acquired
(24,786
)
(4,524
)
Net cash (used in) provided by investing
activities
(51,852
)
97,026
Cash flows from financing
activities:
Proceeds from issuance of common stock
upon exercise of stock options
3,372
1,000
Proceeds from issuance of common stock
under employee stock purchase plan
4,481
4,765
Payment for taxes related to net share
settlement of stock options
(1,547
)
—
Proceeds from issuance of convertible
senior notes, net of issuance costs
—
145,861
Net cash provided by financing
activities
6,306
151,626
Effect of exchange rates on cash and cash
equivalents
386
(1,383
)
Net increase in cash and cash
equivalents
21,550
211,593
Cash and cash equivalents, beginning of
period
256,065
203,239
Cash and cash equivalents, end of
period
$
277,615
$
414,832
ZUORA, INC.
RECONCILIATION OF SELECTED
GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except
percentages)
(unaudited)
Subscription Gross
Margin
Three Months Ended
October 31,
Nine Months Ended
October 31,
2024
2023
2024
2023
Reconciliation of cost of subscription
revenue:
GAAP cost of subscription revenue
$
23,954
$
20,378
$
67,207
$
62,304
Less:
Stock-based compensation
(2,331
)
(2,350
)
(6,291
)
(6,889
)
Amortization of acquired intangibles
(1,164
)
(607
)
(2,706
)
(2,083
)
Workforce reductions
(228
)
—
(796
)
(38
)
Acquisition-related expenses
(12
)
—
(103
)
—
Asset impairment
—
(439
)
—
(439
)
Shareholder matters
—
—
(20
)
—
Non-GAAP cost of subscription revenue
$
20,219
$
16,982
$
57,291
$
52,855
GAAP subscription gross margin
77
%
79
%
78
%
78
%
Non-GAAP subscription gross margin
81
%
83
%
81
%
81
%
Professional Services Gross
Margin
Three Months Ended
October 31,
Nine Months Ended
October 31,
2024
2023
2024
2023
Reconciliation of cost of professional
services revenue:
GAAP cost of professional services
revenue
$
14,383
$
14,650
$
43,483
$
47,851
Less:
Stock-based compensation
(2,598
)
(2,747
)
(7,359
)
(8,997
)
Acquisition-related expenses
(22
)
—
(22
)
—
Shareholder matters
—
—
(28
)
—
Workforce reductions
—
—
(5
)
(46
)
Non-GAAP cost of professional services
revenue
$
11,763
$
11,903
$
36,069
$
38,808
GAAP professional services gross
margin
(23
)%
(24
)%
(29
)%
(27
)%
Non-GAAP professional services gross
margin
(1
)%
(1
)%
(7
)%
(3
)%
ZUORA, INC.
RECONCILIATION OF SELECTED
GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
(in thousands, except
percentages)
(unaudited)
Total Gross Margin
Three Months Ended
October 31,
Nine Months Ended
October 31,
2024
2023
2024
2023
Reconciliation of gross profit:
GAAP gross profit
$
78,592
$
74,821
$
231,404
$
210,837
Add:
Stock-based compensation
4,929
5,097
13,650
15,886
Amortization of acquired intangibles
1,164
607
2,706
2,083
Workforce reductions
228
—
801
84
Acquisition-related expenses
34
—
125
—
Asset impairment
—
439
—
439
Shareholder matters
—
—
48
—
Non-GAAP gross profit
$
84,947
$
80,964
$
248,734
$
229,329
GAAP gross margin
67
%
68
%
68
%
66
%
Non-GAAP gross margin
73
%
74
%
73
%
71
%
Operating (Loss) Income and Operating
Margin
Three Months Ended
October 31,
Nine Months Ended
October 31,
2024
2023
2024
2023
Reconciliation of (loss) income from
operations:
GAAP loss from operations
$
(11,718
)
$
(8,821
)
$
(25,379
)
$
(47,239
)
Add:
Stock-based compensation
24,933
26,101
69,102
77,973
Acquisition-related expenses
10,299
19
17,100
211
Amortization of acquired intangibles
1,164
607
2,706
2,083
Workforce reductions
241
—
1,518
265
Shareholder matters
181
(3,508
)
4,240
(3,265
)
Asset impairment
—
1,592
—
1,592
Non-GAAP income from operations
$
25,100
$
15,990
$
69,287
$
31,620
GAAP operating margin
(10
)%
(8
)%
(7
)%
(15
)%
Non-GAAP operating margin
21
%
15
%
20
%
10
%
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
October 31,
Nine Months Ended
October 31,
2024
2023
2024
2023
Reconciliation of net (loss) income:
GAAP net loss
$
(32,206
)
$
(5,502
)
$
(53,135
)
$
(47,359
)
Add:
Stock-based compensation
24,933
26,101
69,102
77,973
Change in fair value of debt derivative
and warrant liabilities
20,174
(6,997
)
29,115
(2,241
)
Acquisition-related expenses
10,299
19
17,100
211
Amortization of acquired intangibles
1,164
607
2,706
2,083
Workforce reductions
241
—
1,518
265
Shareholder matters
181
(3,508
)
4,240
(3,265
)
Asset impairment
—
1,592
—
1,592
Non-GAAP net income
$
24,786
$
12,312
$
70,646
$
29,259
GAAP net loss per share, basic and
diluted1
$
(0.21
)
$
(0.04
)
$
(0.36
)
$
(0.34
)
Non-GAAP net income per share, basic and
diluted1
$
0.16
$
0.09
$
0.47
$
0.21
_________________________________
(1) For the three months ended October 31, 2024 and 2023, GAAP
and Non-GAAP net (loss) income per share are calculated based upon
152.3 million and 141.5 million basic and diluted weighted-average
shares of common stock, respectively. For the nine months ended
October 31, 2024 and 2023, GAAP and Non-GAAP net (loss) income per
share are calculated based upon 149.5 million and 138.8 million
basic and diluted weighted-average shares of common stock,
respectively.
Adjusted Free Cash Flow
Three Months Ended
October 31,
Nine Months Ended
October 31,
2024
2023
2024
2023
Reconciliation of adjusted free cash
flow:
Net cash provided by (used in) operating
activities (GAAP)
$
22,408
$
(55,657
)
$
66,710
$
(35,676
)
Add:
Acquisition-related expenses
5,587
28
7,300
135
Shareholder matters
824
71,377
4,379
72,130
Less:
Purchases of property and equipment
(3,330
)
(3,075
)
(9,252
)
(6,913
)
Adjusted free cash flow (non-GAAP)
$
25,489
$
12,673
$
69,137
$
29,676
Net cash provided by (used in) investing
activities (GAAP)
$
18,999
$
2,005
$
(51,852
)
$
97,026
Net cash (used in) provided by financing
activities (GAAP)
$
(1,295
)
$
145,899
$
6,306
$
151,626
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241209614914/en/
Investor Relations Contact: Luana Wolk
investorrelations@zuora.com 650-419-1377
Media Relations Contact: Margaret Juhnke press@zuora.com
619-609-3919
Zuora (NYSE:ZUO)
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