Shares of cloud subscription services company Zuora Inc. rose nearly 10% in late trading today after the company surprised investors with revenue and earnings beats in its fiscal 2025 first quarter.

For the quarter that ended on April 30, Zuora reported adjusted earnings per share of 11 cents, up from five cents per share in the same quarter of the previous fiscal year, on revenue of $109.8 million, up 6% year-over-year. Analysts had been expecting adjusted earnings per share of seven cents on revenue of $108.82 million.

Subscription revenue in the quarter grew 10% year-over-year, to $99 million. Net cash provided by operating activities more than doubled, to $32.9 million. The company ended the quarter with $547.2 million in cash, cash equivalents and short-term investments on hand.

Zuora’s strong figures were driven by customer growth, with annual recurring revenue of $404.4 million as of April 30, up 8% from the $373.9 million reported at the same time last year. The company’s customers are also spending more, with customers with an annual contract value equal to or greater than $250,000 growing to 451, up from 436 the previous year. Zuora’s customers are mostly sticking around as well, with Zuora reporting a dollar-based retention rate of 104%.

New customers acquired by Zuora in the quarter included Mitsubishi Electric Corp., The Asahi Shimbun Co., AVEVA Group plc and The Atlantic Monthly Group LLC.

Zuora also announced on April 30, the last day of the quarter, that it had agreed to acquire software-as-a-service and pricing platform company Togai Inc. for an undisclosed sum. The company says the acquisition will help it by uniting developers and finance teams to launch, iterate and adapt usage-based models.

“Our first quarter speaks to the quality of our install base and ability to drive strong expansion with innovations, including the recent acquisition of Togai,” co-founder and Chief Executive Tien Tzuo said in the company’s earnings release. “As more companies look to monetize with subscription, usage and other business models, they continue to look to our offerings to accelerate their total monetization strategies.”

For its fiscal 2025 second quarter, Zuora expects adjusted earnings per share of nine to 10 cents on revenue of $111.5 million to $113.5 million. For its full fiscal year, the company expects adjusted earnings per share of 41 to 43 cents on revenue of $410 million to $414 million.

Photo: Zuora