UPDATED 19:41 EDT / MARCH 01 2023

CLOUD

Zuora shares rocket on modest earnings and revenue beats

Updated:

Shares in Zuora Inc. jumped almost 28% today after the cloud subscription services company reported earnings and revenue beats on Wednesday.

For the fourth quarter that ended Jan. 31, Zuora reported a loss before costs such as stock compensation of four cents a share, up from a one-cent-per-share loss in the same quarter last year. Revenue rose 14% from a year ago, to $103 million. Analysts were expecting a loss of six cents per share on revenue of $99.52 million.

Subscription revenue rose 16% in the quarter, to $89.5 million, adjusted income from operations was $2.2 million and its net loss was $31.9 million. Net cash used in operating activities was $18 million, free cash flow was negative $20.1 million, and cash and equivalents on hand totaled $386.2 million as of the end of January.

Highlights in the quarter included Zuora seeing its customers with an annual contract value of $100,000 increasing to 773, up from 747 as of Jan. 31, 2022. The company’s dollar-based retention rate was 108% and annual recurring revenue hit $365 million, up 16% year-over-year.

Customer usage of Zuora grew 12%, to $23.8 billion in transaction value. Zuora landed new customer logos and go-live in the quarter from AVEVA Group plc, Donnelley Financial Solutions Inc., Microsoft Corp., Scout24 AG, SimpliSafe Inc. and Stellantis N.V.

For its full fiscal year 2023, Zuora reported an adjusted loss of 13 cents per share on revenue of $396.1 million, up 14% year-over-year.

“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,” Tien Tzuo, founder and chief executive officer of Zuora, said in the company’s earnings release. “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.”

For the quarter ahead, Zuora expected adjusted earnings per share of breakeven to a penny on revenue of $101 million to $103 million. For the fiscal year 2024, earnings are expected to be seven to 10 cents a share on revenue of $374 million to $384 million. Zuora shares rose nearly 4% in late trading but then on Thursday investors decided they liked the results even more, sending shares up nearly 18% by Thursday’s close.

Image: Zuora

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