Zuora, Inc. (NYSE: ZUO), a leading monetization platform provider for recurring revenue businesses, today announced financial results for its fiscal fourth quarter and full year ended January 31, 2023.
"Q4 was another solid quarter where we came in ahead of guidance across our operating metrics, including revenue, free cash flow, net dollar retention and non-GAAP operating income," said Tien Tzuo, founder and CEO at Zuora. "We continue to successfully execute our land and expand strategy based on the clear demand for billing, revenue and subscription management solutions. Looking ahead, we're committed to balancing growth and profitability in the upcoming fiscal year."
Fourth Quarter Fiscal 2023 Financial Results:
Full Year Fiscal 2023 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.
Fourth Quarter Key Metrics and Business Highlights:
Financial Outlook:
As of March 1, 2023, we are providing guidance for the first 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 first quarter and full fiscal year 2024, Zuora currently expects the following results:
|
First Quarter |
|
Fiscal 2024 |
Subscription revenue |
$88.0M - $89.5M |
|
$374.0M - $384.0M |
Professional services revenue |
$13.0M - $13.5M |
|
$54.0M - $56.0M |
Total revenue |
$101.0M - $103.0M |
|
$428.0M - $440.0M |
Non-GAAP income from operations |
$4.0M - $5.0M |
|
$26.0M - $31.0M |
Non-GAAP net income per share1 |
$0.00 - $0.01 |
|
$0.07 - $0.11 |
ARR growth2 |
|
|
12% - 15% |
Dollar-based Retention Rate2 |
|
|
107% - 109% |
Free Cash Flow3 |
|
|
$24.0M+ |
(1) Non-GAAP net loss per share was computed assuming 136.2 million and 140.0 million weighted-average shares outstanding for the first quarter and full fiscal year 2024, respectively. | |
(2) Refer to the "Operating Metrics" section below for how we define ARR and Dollar-based Retention Rate. ARR growth is calculated by dividing the annual recurring revenue (ARR) as of a period end by the ARR for the corresponding period end of the prior fiscal year. | |
(3) Free cash flow includes the expected impacts of the following: tax-related and acquisition-related expenses associated with our acquisition of Zephr Inc Limited (Zephr), costs associated with the workforce reduction we approved in November 2022, and lower billings related to the macroeconomic environment including extended deal cycles. |
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 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, 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.
Webcast and Conference Call Information:
Zuora will host a conference call for investors on March 1, 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 March 1, 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 March 1, 2023 at 4:00 p.m. PT to March 8, 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 cost of professional services revenue; non-GAAP gross profit; non-GAAP total gross margin; non-GAAP subscription gross margin; non-GAAP professional services gross margin; non-GAAP research and development expense; non-GAAP sales and marketing expense; non-GAAP general and administrative expense; non-GAAP operating margin; non-GAAP income (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 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:
Additionally, we believe 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.
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.
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.
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.
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 December 8, 2022 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: adverse changes in general economic or market conditions, including the impact that inflation or a slowdown in the economy, or market conditions may have on our business and our customers; 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; the risk of currency exchange rate fluctuations; we may not achieve the benefits of the workforce reduction we approved in November 2022 and there may be possible changes in the size and timing of charges related to such reduction; the risk of loss of key employees; the anticipated impact of the acquisition of Zephr on Zuora's business and future financial and operating results, the ability of Zuora to successfully integrate Zephr's operations and technology, and the expected amount and timing of synergies and benefits from the acquisition; future responses to and effects of the ongoing COVID-19 pandemic, including the pandemic's impact on the economy, our customers and our businesses; 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; our products may fail to gain, or lose, market acceptance; 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; 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; 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; 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, 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 platform for recurring revenue businesses across all industries, enabling companies to unlock customer-centric business models. After starting with Zuora Billing in 2007, Zuora's award-winning multi-product portfolio now also includes Zuora Revenue, Zuora Collect, and Zephr, all powered by the Zuora Platform. 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 U.S., EMEA and APAC. To learn more about the Zuora monetization platform, 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) |
|||||||||||||||
|
Three Months Ended
|
|
Fiscal Year Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Subscription |
$ |
89,513 |
|
|
$ |
77,332 |
|
|
$ |
338,391 |
|
|
$ |
287,747 |
|
Professional services |
|
13,528 |
|
|
|
13,360 |
|
|
|
57,696 |
|
|
|
58,991 |
|
Total revenue |
|
103,041 |
|
|
|
90,692 |
|
|
|
396,087 |
|
|
|
346,738 |
|
Cost of revenue: |
|
|
|
|
|
|
|
||||||||
Subscription |
|
21,070 |
|
|
|
18,095 |
|
|
|
81,094 |
|
|
|
68,285 |
|
Professional services |
|
16,995 |
|
|
|
17,603 |
|
|
|
72,135 |
|
|
|
71,821 |
|
Total cost of revenue |
|
38,065 |
|
|
|
35,698 |
|
|
|
153,229 |
|
|
|
140,106 |
|
Gross profit |
|
64,976 |
|
|
|
54,994 |
|
|
|
242,858 |
|
|
|
206,632 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Research and development |
|
24,925 |
|
|
|
21,654 |
|
|
|
102,564 |
|
|
|
83,219 |
|
Sales and marketing |
|
41,295 |
|
|
|
38,236 |
|
|
|
173,871 |
|
|
|
143,366 |
|
General and administrative |
|
22,445 |
|
|
|
29,292 |
|
|
|
77,878 |
|
|
|
76,223 |
|
Total operating expenses |
|
88,665 |
|
|
|
89,182 |
|
|
|
354,313 |
|
|
|
302,808 |
|
Loss from operations |
|
(23,689 |
) |
|
|
(34,188 |
) |
|
|
(111,455 |
) |
|
|
(96,176 |
) |
Change in fair value of warrant liability |
|
(134 |
) |
|
|
? |
|
|
|
9,214 |
|
|
|
? |
|
Interest expense |
|
(4,486 |
) |
|
|
(40 |
) |
|
|
(15,133 |
) |
|
|
(152 |
) |
Interest and other income (expense), net |
|
5,888 |
|
|
|
(748 |
) |
|
|
5,986 |
|
|
|
(1,670 |
) |
Loss before income taxes |
|
(22,421 |
) |
|
|
(34,976 |
) |
|
|
(111,388 |
) |
|
|
(97,998 |
) |
Income tax provision |
|
9,437 |
|
|
|
206 |
|
|
|
10,582 |
|
|
|
1,427 |
|
Net loss |
|
(31,858 |
) |
|
$ |
(35,182 |
) |
|
|
(121,970 |
) |
|
|
(99,425 |
) |
Comprehensive loss: |
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment |
|
1,187 |
|
|
|
(287 |
) |
|
|
(461 |
) |
|
|
(673 |
) |
Unrealized gain (loss) on available-for-sale securities |
|
663 |
|
|
|
(170 |
) |
|
|
(350 |
) |
|
|
(231 |
) |
Comprehensive loss |
$ |
(30,008 |
) |
|
$ |
(35,639 |
) |
|
$ |
(122,781 |
) |
|
$ |
(100,329 |
) |
Net loss per share, basic and diluted |
$ |
(0.24 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.93 |
) |
|
$ |
(0.80 |
) |
Weighted-average shares outstanding used in calculating net loss per share, basic and diluted |
|
134,349 |
|
|
|
127,102 |
|
|
|
131,441 |
|
|
|
124,206 |
|
ZUORA, INC. |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(in thousands) |
|||||||
|
January 31, 2023 |
|
January 31, 2022 |
||||
|
(unaudited) |
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
203,239 |
|
|
$ |
113,507 |
|
Short-term investments |
|
183,006 |
|
|
|
101,882 |
|
Accounts receivable, net of allowance for credit losses of $4,001 and $3,188 as of January 31, 2023 and January 31, 2022, respectively |
|
91,740 |
|
|
|
82,263 |
|
Deferred commissions, current portion |
|
16,282 |
|
|
|
15,080 |
|
Prepaid expenses and other current assets |
|
24,285 |
|
|
|
15,603 |
|
Total current assets |
|
518,552 |
|
|
|
328,335 |
|
Property and equipment, net |
|
27,159 |
|
|
|
27,676 |
|
Operating lease right-of-use assets |
|
22,768 |
|
|
|
32,643 |
|
Purchased intangibles, net |
|
13,201 |
|
|
|
3,452 |
|
Deferred commissions, net of current portion |
|
28,250 |
|
|
|
26,727 |
|
Goodwill |
|
53,991 |
|
|
|
17,632 |
|
Other assets |
|
4,677 |
|
|
|
4,787 |
|
Total assets |
$ |
668,598 |
|
|
$ |
441,252 |
|
Liabilities and stockholders' equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
1,073 |
|
|
$ |
6,785 |
|
Accrued expenses and other current liabilities |
|
27,678 |
|
|
|
14,225 |
|
Accrued employee liabilities |
|
30,483 |
|
|
|
32,425 |
|
Debt, current portion |
|
? |
|
|
|
1,660 |
|
Deferred revenue, current portion |
|
167,145 |
|
|
|
152,740 |
|
Operating lease liabilities, current portion |
|
9,240 |
|
|
|
11,462 |
|
Total current liabilities |
|
235,619 |
|
|
|
219,297 |
|
Debt, net of current portion |
|
210,403 |
|
|
|
? |
|
Deferred revenue, net of current portion |
|
442 |
|
|
|
771 |
|
Operating lease liabilities, net of current portion |
|
37,924 |
|
|
|
45,633 |
|
Deferred tax liabilities |
|
3,717 |
|
|
|
3,243 |
|
Other long-term liabilities |
|
7,333 |
|
|
|
1,701 |
|
Total liabilities |
|
495,438 |
|
|
|
270,645 |
|
Stockholders' equity: |
|
|
|
||||
Class A common stock |
|
13 |
|
|
|
12 |
|
Class B common stock |
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
859,482 |
|
|
|
734,149 |
|
Accumulated other comprehensive loss |
|
(919 |
) |
|
|
(108 |
) |
Accumulated deficit |
|
(685,417 |
) |
|
|
(563,447 |
) |
Total stockholders' equity |
|
173,160 |
|
|
|
170,607 |
|
Total liabilities and stockholders' equity |
$ |
668,598 |
|
|
$ |
441,252 |
|
ZUORA, INC. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(in thousands) |
|||||||
|
Fiscal Year Ended January 31, |
||||||
|
2023 |
|
2022 |
||||
|
(unaudited) |
|
|
||||
Cash flows from operating activities: |
|
|
|
||||
Net loss |
$ |
(121,970 |
) |
|
$ |
(99,425 |
) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
||||
Depreciation, amortization and accretion |
|
18,738 |
|
|
|
16,760 |
|
Stock-based compensation |
|
96,401 |
|
|
|
72,070 |
|
Provision for credit losses |
|
2,245 |
|
|
|
2,919 |
|
Donation of common stock to charitable foundation |
|
1,000 |
|
|
|
1,000 |
|
Amortization of deferred commissions |
|
19,291 |
|
|
|
16,330 |
|
Reduction in carrying amount of right-of-use assets |
|
7,363 |
|
|
|
9,717 |
|
Asset impairment |
|
4,537 |
|
|
|
12,783 |
|
Change in fair value of warrant liability |
|
(9,213 |
) |
|
|
? |
|
Change in fair value of contingent consideration |
|
(380 |
) |
|
|
? |
|
Other |
|
(391 |
) |
|
|
802 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(11,081 |
) |
|
|
(6,322 |
) |
Prepaid expenses and other assets |
|
(7,379 |
) |
|
|
(1,179 |
) |
Deferred commissions |
|
(22,802 |
) |
|
|
(24,127 |
) |
Accounts payable |
|
(6,084 |
) |
|
|
4,457 |
|
Accrued expenses and other liabilities |
|
12,353 |
|
|
|
1,424 |
|
Accrued employee liabilities |
|
(2,161 |
) |
|
|
1,165 |
|
Deferred revenue |
|
12,020 |
|
|
|
24,281 |
|
Operating lease liabilities |
|
(13,131 |
) |
|
|
(13,969 |
) |
Net cash (used in) provided by operating activities |
|
(20,644 |
) |
|
|
18,686 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchases of property and equipment |
|
(10,634 |
) |
|
|
(8,776 |
) |
Insurance proceeds for damaged property and equipment |
|
? |
|
|
|
344 |
|
Purchase of intangible assets |
|
? |
|
|
|
(1,349 |
) |
Purchases of short-term investments |
|
(234,246 |
) |
|
|
(109,510 |
) |
Maturities of short-term investments |
|
154,806 |
|
|
|
99,192 |
|
Cash paid for acquisition, net of cash acquired |
|
(41,000 |
) |
|
|
? |
|
Net cash used in investing activities |
|
(131,074 |
) |
|
|
(20,099 |
) |
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 |
|
2,471 |
|
|
|
18,499 |
|
Proceeds from issuance of common stock under employee stock purchase plan |
|
7,019 |
|
|
|
7,428 |
|
Principal payments on long-term debt |
|
(1,480 |
) |
|
|
(4,444 |
) |
Net cash provided by financing activities |
|
241,911 |
|
|
|
21,483 |
|
Effect of exchange rates on cash and cash equivalents |
|
(461 |
) |
|
|
(673 |
) |
Net increase in cash and cash equivalents |
|
89,732 |
|
|
|
19,397 |
|
Cash and cash equivalents, beginning of year |
|
113,507 |
|
|
|
94,110 |
|
Cash and cash equivalents, end of year |
$ |
203,239 |
|
|
$ |
113,507 |
|
ZUORA, INC. |
||||||||||||||||||||||||||||||||||
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES |
||||||||||||||||||||||||||||||||||
(in thousands, except percentages and per share data) |
||||||||||||||||||||||||||||||||||
(unaudited) |
||||||||||||||||||||||||||||||||||
|
Three Months Ended January 31, 2023 |
|||||||||||||||||||||||||||||||||
|
GAAP |
|
Stock-based
|
|
Amortization
|
|
Certain
|
|
Asset
|
|
Change in
|
|
Acquisition-
|
|
Workforce
|
|
Non-
|
|||||||||||||||||
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Cost of subscription revenue |
$ |
21,070 |
|
|
$ |
(1,624 |
) |
|
$ |
(724 |
) |
|
$ |
? |
|
|
$ |
? |
|
|
$ |
? |
|
$ |
? |
|
|
$ |
(400 |
) |
|
$ |
18,322 |
|
Cost of professional services revenue |
|
16,995 |
|
|
|
(2,111 |
) |
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
? |
|
|
|
(247 |
) |
|
|
14,637 |
|
Gross profit |
|
64,976 |
|
|
|
3,735 |
|
|
|
724 |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
? |
|
|
|
647 |
|
|
|
70,082 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Research and development |
|
24,925 |
|
|
|
(4,852 |
) |
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
? |
|
|
|
(459 |
) |
|
|
19,614 |
|
Sales and marketing |
|
41,295 |
|
|
|
(5,472 |
) |
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
? |
|
|
|
(1,107 |
) |
|
|
34,716 |
|
General and administrative |
|
22,445 |
|
|
|
(2,297 |
) |
|
|
? |
|
|
|
(22 |
) |
|
|
(4,537 |
) |
|
|
? |
|
|
(1,541 |
) |
|
|
(496 |
) |
|
|
13,552 |
|
(Loss) income from operations |
|
(23,689 |
) |
|
|
16,356 |
|
|
|
724 |
|
|
|
22 |
|
|
|
4,537 |
|
|
|
? |
|
|
1,541 |
|
|
|
2,709 |
|
|
|
2,200 |
|
Net loss |
$ |
(31,858 |
) |
|
$ |
16,356 |
|
|
$ |
724 |
|
|
$ |
22 |
|
|
$ |
4,537 |
|
|
$ |
134 |
|
$ |
1,541 |
|
|
$ |
2,709 |
|
|
$ |
(5,835 |
) |
Net loss per share, basic and diluted1 |
$ |
(0.24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.04 |
) |
|||||||||||||
Gross margin |
|
63 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68 |
% |
|||||||||||||
Subscription gross margin |
|
76 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80 |
% |
|||||||||||||
Professional services gross margin |
|
(26 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8 |
)% |
|||||||||||||
Operating margin |
|
(23 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
% |
|
Three Months Ended January 31, 2022 |
||||||||||||||||||||||
|
GAAP |
|
Stock-based
|
|
Amortization
|
|
Certain
|
|
Asset
|
|
Non-
|
||||||||||||
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of subscription revenue |
$ |
18,095 |
|
|
$ |
(1,718 |
) |
|
$ |
(554 |
) |
|
$ |
? |
|
|
$ |
? |
|
|
$ |
15,823 |
|
Cost of professional services revenue |
|
17,603 |
|
|
|
(2,787 |
) |
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
14,816 |
|
Gross profit |
|
54,994 |
|
|
|
4,505 |
|
|
|
554 |
|
|
|
? |
|
|
|
? |
|
|
|
60,053 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research and development |
|
21,654 |
|
|
|
(5,526 |
) |
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
16,128 |
|
Sales and marketing |
|
38,236 |
|
|
|
(6,491 |
) |
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
31,745 |
|
General and administrative |
|
29,292 |
|
|
|
(3,770 |
) |
|
|
? |
|
|
|
(7 |
) |
|
|
(12,783 |
) |
|
|
12,732 |
|
Loss from operations |
|
(34,188 |
) |
|
|
20,292 |
|
|
|
554 |
|
|
|
7 |
|
|
|
12,783 |
|
|
|
(552 |
) |
Net loss |
$ |
(35,182 |
) |
|
$ |
20,292 |
|
|
$ |
554 |
|
|
$ |
7 |
|
|
$ |
12,783 |
|
|
$ |
(1,546 |
) |
Net loss per share, basic and diluted1 |
$ |
(0.28 |
) |
|
|
|
|
|
|
|
|
|
$ |
(0.01 |
) |
||||||||
Gross margin |
|
61 |
% |
|
|
|
|
|
|
|
|
|
|
66 |
% |
||||||||
Subscription gross margin |
|
77 |
% |
|
|
|
|
|
|
|
|
|
|
80 |
% |
||||||||
Professional services gross margin |
|
(32 |
)% |
|
|
|
|
|
|
|
|
|
|
(11 |
)% |
||||||||
Operating margin |
|
(38 |
)% |
|
|
|
|
|
|
|
|
|
|
(1 |
)% |
(1) GAAP and Non-GAAP net loss per share are calculated based upon 134.3 million and 127.1 million basic and diluted weighted-average shares of common stock for the three months ended January 31, 2023 and 2022, respectively. |
ZUORA, INC. |
|||||||||||||||||||||||||||||||||||||||
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED) |
|||||||||||||||||||||||||||||||||||||||
(in thousands, except percentages and per share data) |
|||||||||||||||||||||||||||||||||||||||
(unaudited) |
|||||||||||||||||||||||||||||||||||||||
|
Fiscal Year Ended January 31, 2023 |
||||||||||||||||||||||||||||||||||||||
|
GAAP |
|
Stock-based
|
|
Amortization
|
|
Charitable
|
|
Certain
|
|
Asset
|
|
Change in
|
|
Acquisition-
|
|
Workforce
|
|
Non-
|
||||||||||||||||||||
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cost of subscription revenue |
$ |
81,094 |
|
|
$ |
(8,141 |
) |
|
$ |
(2,236 |
) |
|
$ |
? |
|
|
$ |
? |
|
|
$ |
? |
|
|
$ |
? |
|
|
$ |
? |
|
|
$ |
(547 |
) |
|
$ |
70,170 |
|
Cost of professional services revenue |
|
72,135 |
|
|
|
(12,297 |
) |
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
(646 |
) |
|
|
59,192 |
|
Gross profit |
|
242,858 |
|
|
|
20,438 |
|
|
|
2,236 |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
1,193 |
|
|
|
266,725 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Research and development |
|
102,564 |
|
|
|
(25,819 |
) |
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
(971 |
) |
|
|
75,774 |
|
Sales and marketing |
|
173,871 |
|
|
|
(33,075 |
) |
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
(3,497 |
) |
|
|
137,299 |
|
General and administrative |
|
77,878 |
|
|
|
(17,069 |
) |
|
|
? |
|
|
|
(1,000 |
) |
|
|
(268 |
) |
|
|
(4,537 |
) |
|
|
? |
|
|
|
(3,153 |
) |
|
|
(708 |
) |
|
|
51,143 |
|
(Loss) income from operations |
|
(111,455 |
) |
|
|
96,401 |
|
|
|
2,236 |
|
|
|
1,000 |
|
|
|
268 |
|
|
|
4,537 |
|
|
|
? |
|
|
|
3,153 |
|
|
|
6,369 |
|
|
|
2,509 |
|
Net loss |
$ |
(121,970 |
) |
|
$ |
96,401 |
|
|
$ |
2,236 |
|
|
$ |
1,000 |
|
|
$ |
268 |
|
|
$ |
4,537 |
|
|
$ |
(9,214 |
) |
|
$ |
3,153 |
|
|
$ |
6,369 |
|
|
$ |
(17,220 |
) |
Net loss per share, basic and diluted2 |
$ |
(0.93 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.13 |
) |
||||||||||||||||
Gross margin |
|
61 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
67 |
% |
||||||||||||||||
Subscription gross margin |
|
76 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
79 |
% |
||||||||||||||||
Professional services gross margin |
|
(25 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3 |
)% |
||||||||||||||||
Operating margin |
|
(28 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
% |
|
Fiscal Year Ended January 31, 20221 |
||||||||||||||||||||||||||
|
GAAP |
|
Stock-based
|
|
Amortization
|
|
Charitable
|
|
Certain
|
|
Asset
|
|
Non-
|
||||||||||||||
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of subscription revenue |
$ |
68,285 |
|
|
$ |
(5,875 |
) |
|
$ |
(2,050 |
) |
|
$ |
? |
|
|
$ |
? |
|
|
$ |
? |
|
|
$ |
60,360 |
|
Cost of professional services revenue |
|
71,821 |
|
|
|
(10,274 |
) |
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
61,547 |
|
Gross profit |
|
206,632 |
|
|
|
16,149 |
|
|
|
2,050 |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
224,831 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Research and development |
|
83,219 |
|
|
|
(21,072 |
) |
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
62,147 |
|
Sales and marketing |
|
143,366 |
|
|
|
(22,484 |
) |
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
? |
|
|
|
120,882 |
|
General and administrative |
|
76,223 |
|
|
|
(12,365 |
) |
|
|
? |
|
|
|
(1,000 |
) |
|
|
(176 |
) |
|
|
(12,783 |
) |
|
|
49,899 |
|
Loss from operations |
|
(96,176 |
) |
|
|
72,070 |
|
|
|
2,050 |
|
|
|
1,000 |
|
|
|
176 |
|
|
|
12,783 |
|
|
|
(8,097 |
) |
Net loss |
$ |
(99,425 |
) |
|
$ |
72,070 |
|
|
$ |
2,050 |
|
|
$ |
1,000 |
|
|
$ |
176 |
|
|
$ |
12,783 |
|
|
$ |
(11,346 |
) |
Net loss per share, basic and diluted2 |
$ |
(0.80 |
) |
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.09 |
) |
||||||||||
Gross margin |
|
60 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
65 |
% |
||||||||||
Subscription gross margin |
|
76 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
79 |
% |
||||||||||
Professional services gross margin |
|
(22 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
(4 |
)% |
||||||||||
Operating margin |
|
(28 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
(2 |
)% |
(1) Beginning with the second quarter ended July 31, 2021, we no longer exclude non-cash adjustments for capitalization and amortization of internal-use software from our non-GAAP financial measures. We believe that this change more closely aligns our reported financial measures with current industry practice. Our non-GAAP financial measures for the fiscal year ended January 31, 2022 were recast to conform to the updated methodology for comparison purposes. |
(2) GAAP and Non-GAAP net loss per share are calculated based upon 131.4 million and 124.2 million basic and diluted weighted-average shares of common stock for the fiscal year ended January 31, 2023 and 2022, respectively. |
Free Cash Flow |
|||||||||||||||
|
Three Months Ended
|
|
Fiscal Year Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net cash (used in) provided by operating activities |
$ |
(17,965 |
) |
|
$ |
10,366 |
|
|
$ |
(20,644 |
) |
|
$ |
18,686 |
|
Less: Purchases of property and equipment, net of insurance recoveries |
|
(2,163 |
) |
|
|
(2,732 |
) |
|
|
(10,634 |
) |
|
|
(8,432 |
) |
Free cash flow |
$ |
(20,128 |
) |
|
$ |
7,634 |
|
|
$ |
(31,278 |
) |
|
$ |
10,254 |
|
Net cash provided by (used in) investing activities |
$ |
34,848 |
|
|
$ |
(18,256 |
) |
|
$ |
(131,074 |
) |
|
$ |
(20,099 |
) |
Net cash provided by financing activities |
$ |
2,908 |
|
|
$ |
5,119 |
|
|
$ |
241,911 |
|
|
$ |
21,483 |
|
Constant Currency Revenue |
|||||||||||||||||||||
|
Three Months Ended
|
|
|
|
Fiscal Year Ended
|
|
|
||||||||||||||
|
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
||||||||||
Subscription revenue (GAAP) |
$ |
89,513 |
|
$ |
77,332 |
|
16 |
% |
|
$ |
338,391 |
|
$ |
287,747 |
|
18 |
% |
||||
Effects of foreign currency rate fluctuations |
|
3,105 |
|
|
|
|
|
|
|
7,237 |
|
|
|
|
|
||||||
Subscription revenue on a constant currency basis (Non-GAAP) |
$ |
92,618 |
|
|
|
|
20 |
% |
|
$ |
345,628 |
|
|
|
|
20 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue (GAAP) |
$ |
103,041 |
|
|
$ |
90,692 |
|
|
14 |
% |
|
$ |
396,087 |
|
|
$ |
346,738 |
|
|
14 |
% |
Effects of foreign currency rate fluctuations |
|
3,413 |
|
|
|
|
|
|
|
9,263 |
|
|
|
|
|
||||||
Total revenue on a constant currency basis (Non-GAAP) |
$ |
106,454 |
|
|
|
|
17 |
% |
|
$ |
405,350 |
|
|
|
|
17 |
% |
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