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Leading cloud-based subscription management platform provider Zuora reported better than expected earnings and guided higher with stay at home demand from the COVID lockdown during its fiscal first quarter on Wednesday, $ZUO stock rose on 20% the report

Zuora subsription
 

Zuora Inc NYSE: ZUO Reported Earnings After Close Wednesday

($0.15) Beat ($0.22) EPS AND $73.9 Million Beat $70.56 Million Revenue Forecast

Earnings

: Zuora, Inc reported a GAAP loss from operations of $17.7 million, compared to a loss of $20.9 million in the first quarter of fiscal 2020. The EPS was -$0.15 beating expectations of -$0.22 with revenue of $73.9 million, an increase of 15% year-over-year beating expectations of $70.65M. The non-GAAP loss from operations was $7.7 million, compared to a non-GAAP loss from operations of $12.5 million in the first quarter of fiscal 2020.

 

Zuora Inc NYSE: ZUO

Reaction After hours After hours 15.15 +2.56 (20.33%)

 

After Closing 12.59 USD +0.56 (4.66%) on Day

CEO Tien Tzuo:

The current crisis has only emphasized the importance of subscription business models. Just look at how our lives have dramatically changed over just the last 12 weeks. We now live in a world of on-demand digital services for work, entertainment, transportation, health, media, the list goes on. .... can also been seen as “a massive forcing function, changing our society and economy in profound way. ....includes validating the resiliency of subscription business models. As proof, he points to stats gathered from Zuora customers performance over the past few months. ,,,,,, What our data is telling us is [that] in the months of March, April and May, half of our customers [did not see] their subscriber growth rates materially affected by the current crisis. Around 20% of our customers have actually seen their subscriber growth rates accelerate. And 17% of our customers are still growing, just at a slower rate. Putting all this together, more than 8 out of 10 Zuora customers sustained or grew their customer base over this time period."

 Highlights

  • Subscription revenue was $56.9 million, an increase of 20% year-over-year, beating expectations of $55.5M
  • Customers with ACV equal to or greater than $100,000 was 643, which represents 18% year-over-year growth.
  • Dollar-based retention rate was 103%. Customer usage of Zuora solutions grew, with $12.3 billion in transaction volume through Zuora’s billing platform during our first quarter, an increase of 27% year-over-year.
  • Launched Zuora Revenue, a new update to RevPro and fully integrated with the entire Zuora order-to-revenue (OTR) suite of applications, with new features that enable companies to achieve a faster quarter close, minimize compliance risk, and more precisely forecast the revenue impact of business decisions.
  • Announced the next generation of its Zuora® Central Platform and for six months, customers will receive free access to Zuora Workflow software for five specific use cases to address common challenges in response to COVID-19.
  • Notable recent go-lives included: Centrica, F5, Keysight, Procore, Seiko Epson and Yext. Highlighted customers from multiple industries and geographies in press announcements including Briggs & Stratton and Kia Motors who launched new connected device services.
  • Launched the Subscribed Strategy Group, to provide customers with strategic guidance on the development and execution of business strategies to win in the Subscription Economy.
  • Working with its philanthropic arm Zuora.org, Zuora opened its first public grants cycle, to award $250,000 of its original $1.0 million grant. Zuora.org will also be making donations to Black Lives Matter, NAACP Legal Defense and Education Fund and other organizations fighting against racial injustice.
  • Zuora announced Todd McElhatton will be joining as its Chief Financial Officer effective June 22, 2020.
  • The growth rate in the prior quarter was 61%.

Cashflow

 Net cash provided by operating activities was $3.0 million, compared to net cash used in operating activities of $2.2 million in the first quarter of fiscal 2020.

Free cash flow was negative $2.2 million compared to negative $3.8 million in the first quarter of fiscal 2020. Cash and Cash Equivalents and Short-term Investments: Cash and cash equivalents and short-term investments were $172.6 million as of April 30, 2020..

"GitHub went freemium, opening up the developer platform to millions. Pluralsight opened up all 7,000 of their tech classes for free for the entire month of April, signing up over 1 million new users. eMoney, a platform from Fidelity, gave their planning tools free to help their financial advisers build stronger client relationships during this time of financial anxiety."

"Fender decided to offer free classes of Fender Play, their online guitar lessons. Originally hoping to sign up 100,000 new folks, they had to shut it off after 1 million sign-ups, essentially connecting their user base in just under 6 weeks. Of course, Zoom worked an extraordinary exercise helping customers scale in response to the demand of 300 million meeting participants…We enabled Resy, the restaurant reservation app, to credit March and April invoices for all of their customers, as they relaunched their app for takeout and delivery. That's a pretty amazing pivot. " CEO Tien Tzuo:

Financial Outlook

Given uncertainties related to the ongoing novel coronavirus (COVID-19) pandemic and associated impact to the global economic environment, we are withdrawing our previously issued full-year fiscal 2021 guidance provided on March 12, 2020.

For the second quarter of fiscal year 2021, Zuora currently expects the following results: Second Quarter Subscription revenue $58.0M - $59.0M Total revenue $72.5M - $75.0M Non-GAAP loss from operations $(8.0M) - $(7.0M) Non-GAAP net loss per share¹ $0.08) - $(0.07)

About Zuora

Zuora provides cloud-based software on a subscription basis that enables any company in any industry to successfully launch, manage, and transform into a subscription business. Our vision is simple. We call it “The World Subscribed,” and it’s the idea that one day every company will be a part of the Subscription Economy.(

Source: Zuora

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