ZUO Zuora Inc

Operating cash flow grew to $32.9 million compared to $14.6 million last year

Adjusted free cash flow grew to $31.4 million compared to $13.0 million last year

GAAP operating margin increased 16 percentage points year-over-year

Non-GAAP operating margin increased 11 percentage points year-over-year

Subscription revenue grew 10% year-over-year

Zuora, Inc. (NYSE: ZUO), a leading monetization suite for modern business, today announced financial results for its fiscal first quarter ended April 30, 2024.

“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,” said Tien Tzuo, Founder and CEO at Zuora. “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.”

First Quarter Fiscal 2025 Financial Results:

• Revenue: Subscription revenue was $99.0 million, an increase of 10% year-over-year. Total revenue was $109.8 million, an increase of 6% year-over-year.
• GAAP Loss from Operations: GAAP loss from operations was $4.0 million, compared to a loss from operations of $20.2 million in the first quarter of fiscal 2024.
• Non-GAAP Income from Operations: Non-GAAP income from operations was $18.6 million, compared to non-GAAP income from operations of $6.1 million in the first quarter of fiscal 2024.
• GAAP Net Loss: GAAP net loss was $13.7 million, or 12% of revenue, compared to a net loss of $19.3 million, or 19% of revenue, in the first quarter of fiscal 2024. GAAP net loss per share was $0.09 based on 146.7 million weighted-average shares outstanding, compared to a net loss per share of $0.14 based on 136.2 million weighted-average shares outstanding in the first quarter of fiscal 2024.
• Non-GAAP Net Income: Non-GAAP net income was $16.8 million, compared to non-GAAP net income of $6.9 million in the first quarter of fiscal 2024. Non-GAAP net income per share was $0.11 based on 146.7 million weighted-average shares outstanding, compared to non-GAAP net income per share of $0.05 based on 136.2 million weighted-average shares outstanding in the first quarter of fiscal 2024.
• Cash Flow: Net cash provided by operating activities was $32.9 million, compared to net cash provided by operating activities of $14.6 million in the first quarter of fiscal 2024.
• Adjusted Free Cash Flow: Adjusted free cash flow was $31.4 million compared to $13.0 million in the first quarter of fiscal 2024.
• Cash and Investments: Cash and cash equivalents and short-term investments were $547.2 million as of April 30, 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.

Key Metrics and Business Highlights:

• Customers with annual contract value (ACV) equal to or greater than $250,000 were 451, up from 436 as of April 30, 2023.
• Dollar-based retention rate (DBRR) was 104%, compared to 108% as of April 30, 2023.
• Annual Recurring Revenue (ARR) was $404.4 million compared to $373.9 million as of April 30, 2023, representing ARR growth of 8%.
• Announced the planned acquisition of Togai, a leading metering and rating solution, to enhance Zuora's usage-based offerings. The acquisition closed in early May.
• Announced that Ubisoft has adopted Zuora to power its Ubisoft+ and Rocksmith+ subscription services.
• Released Zuora's latest Subscription Economy Index (SEI) report, which found that companies in the SEI have experienced 3.4x faster growth rates than the S&P 500 over the past 12 years.
• New customers and go-lives included Mitsubishi Electric, The Asahi Shimbun Company, AVEVA and The Atlantic.

Financial Outlook:

As of May 22, 2024, we are providing guidance for the second quarter and full fiscal year 2025 based on current market conditions and expectations. For the full fiscal year 2025, we are maintaining our topline outlook and raising our non-GAAP operating income range while absorbing the operating expense impact of Togai. We emphasize that the guidance is subject to various important cautionary factors referenced in the section entitled “Forward-Looking Statements” below.

For the second quarter and full fiscal year 2025, Zuora currently expects the following results:

 

Second Quarter

 

Fiscal 2025

Subscription revenue

$101.0M - $102.0M

 

$410.0M - $414.0M

Professional services revenue

$10.5M - $11.5M

 

$41.0M - $45.0M

Total revenue

$111.5M - $113.5M

 

$451.0M - $459.0M

Non-GAAP income from operations1

$17.5M - $19.5M

 

$80.0M - $82.0M

Non-GAAP net income per share1,2

$0.09 - $0.10

 

$0.41 - $0.43

ARR growth3

 

 

8% - 10%

Dollar-based Retention Rate3

 

 

104% - 106%

Adjusted Free Cash Flow1

 

 

$80.0M+

 

(1) For information on how we derive our non-GAAP financial measures, see the section titled "Explanation of Non-GAAP Financial Measures" below. 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, adjusted 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.

 

(2) Non-GAAP net income per share was computed assuming 149.4 million and 151.0 million weighted-average shares outstanding for the second quarter and full fiscal year 2025, respectively.

 

(3) Refer to the "Explanation of Key Operational and Financial Metrics" section below for how these metrics are calculated.

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.

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.

Webcast and Conference Call Information:

Zuora will host a conference call for investors on May 22, 2024 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 May 22, 2025. The call can also be accessed live via phone by the toll-free dial-in number: 1-888-596-4144 or toll dial-in number: 1-646-968-2525 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 1-609-800-9909 with conference ID 8022374 available from May 22, 2024 at 4:00 p.m. PT to May 29, 2024 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: 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 conversion and warrant liabilities. We exclude fair value adjustments related to the debt conversion 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, including expenses we incurred and gains or losses recognized on contingent consideration, related to our acquisitions. 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:

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,” “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 our financial outlook for the second quarter and full year fiscal 2025. 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-K filed with the Securities and Exchange Commission on March 26, 2024 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: 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.

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, Penske Media Corporation, 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

April 30,

 

2024

 

2023

Revenue:

 

 

 

Subscription

$

98,959

 

 

$

89,711

 

Professional services

 

10,810

 

 

 

13,384

 

Total revenue

 

109,769

 

 

 

103,095

 

Cost of revenue:

 

 

 

Subscription1

 

20,689

 

 

 

20,588

 

Professional services1

 

14,372

 

 

 

16,758

 

Total cost of revenue

 

35,061

 

 

 

37,346

 

Gross profit

 

74,708

 

 

 

65,749

 

Operating expenses:

 

 

 

Research and development1

 

23,566

 

 

 

25,668

 

Sales and marketing1

 

35,845

 

 

 

41,444

 

General and administrative1

 

19,269

 

 

 

18,816

 

Total operating expenses

 

78,680

 

 

 

85,928

 

Loss from operations

 

(3,972

)

 

 

(20,179

)

Change in fair value of debt conversion and warrant liabilities

 

(7,928

)

 

 

30

 

Interest expense

 

(6,771

)

 

 

(4,387

)

Interest and other income (expense), net

 

5,315

 

 

 

5,710

 

Loss before income taxes

 

(13,356

)

 

 

(18,826

)

Income tax provision

 

352

 

 

 

469

 

Net loss

 

(13,708

)

 

 

(19,295

)

Comprehensive loss:

 

 

 

Foreign currency translation adjustment

 

(247

)

 

 

(283

)

Unrealized (loss) gain on available-for-sale securities

 

(487

)

 

 

340

 

Comprehensive loss

$

(14,442

)

 

$

(19,238

)

Net loss per share, basic and diluted

$

(0.09

)

 

$

(0.14

)

Weighted-average shares outstanding used in calculating net loss per share, basic and diluted

 

146,670

 

 

 

136,190

 

_____________________

(1) Stock-based compensation expense was recorded in the following cost and expense categories:

 

Three Months Ended

April 30,

 

2024

 

2023

Cost of subscription revenue

$

1,583

 

$

2,359

Cost of professional services revenue

 

2,038

 

 

 

3,021

 

Research and development

 

5,903

 

 

 

6,744

 

Sales and marketing

 

5,475

 

 

 

7,977

 

General and administrative

 

3,462

 

 

 

5,123

 

Total stock-based compensation expense

$

18,461

 

 

$

25,224

 

ZUORA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 

 

April 30, 2024

 

January 31, 2024

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

265,712

 

 

$

256,065

 

Short-term investments

 

281,442

 

 

 

258,120

 

Accounts receivable, net

 

77,399

 

 

 

124,602

 

Deferred commissions, current portion

 

15,934

 

 

 

15,870

 

Prepaid expenses and other current assets

 

25,624

 

 

 

23,261

 

Total current assets

 

666,111

 

 

 

677,918

 

Property and equipment, net

 

26,218

 

 

 

25,961

 

Operating lease right-of-use assets

 

21,270

 

 

 

22,462

 

Purchased intangibles, net

 

9,474

 

 

 

10,082

 

Deferred commissions, net of current portion

 

25,952

 

 

 

27,250

 

Goodwill

 

56,147

 

 

 

56,657

 

Other assets

 

4,574

 

 

 

3,506

 

Total assets

$

809,746

 

 

$

823,836

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

153

 

 

$

3,161

 

Accrued expenses and other current liabilities

 

41,308

 

 

 

32,157

 

Accrued employee liabilities

 

28,465

 

 

 

37,722

 

Deferred revenue, current portion

 

184,278

 

 

 

199,615

 

Operating lease liabilities, current portion

 

5,929

 

 

 

6,760

 

Total current liabilities

 

260,133

 

 

 

279,415

 

Long-term debt

 

362,310

 

 

 

359,525

 

Deferred revenue, net of current portion

 

1,411

 

 

 

2,802

 

Operating lease liabilities, net of current portion

 

35,276

 

 

 

37,100

 

Deferred tax liabilities

 

3,726

 

 

 

3,725

 

Other long-term liabilities

 

7,592

 

 

 

7,582

 

Total liabilities

 

670,448

 

 

 

690,149

 

Stockholders’ equity:

 

 

 

Class A common stock

 

14

 

 

 

14

 

Class B common stock

 

1

 

 

 

1

 

Additional paid-in capital

 

984,194

 

 

 

964,141

 

Accumulated other comprehensive loss

 

(1,593

)

 

 

(859

)

Accumulated deficit

 

(843,318

)

 

 

(829,610

)

Total stockholders’ equity

 

139,298

 

 

 

133,687

 

Total liabilities and stockholders’ equity

$

809,746

 

 

$

823,836

 

ZUORA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

Three Months Ended

April 30,

 

2024

 

2023

Cash flows from operating activities:

 

 

 

Net loss

$

(13,708

)

 

$

(19,295

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Depreciation, amortization and accretion

 

4,235

 

 

 

4,290

 

Stock-based compensation

 

18,461

 

 

 

25,224

 

Provision for credit losses

 

501

 

 

 

1,117

 

Amortization of deferred commissions

 

4,554

 

 

 

4,970

 

Reduction in carrying amount of right-of-use assets

 

1,192

 

 

 

1,584

 

Change in fair value of debt conversion and warrant liabilities

 

7,928

 

 

 

(30

)

Other

 

78

 

 

 

140

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

46,702

 

 

 

7,531

 

Prepaid expenses and other assets

 

(2,745

)

 

 

(112

)

Deferred commissions

 

(3,375

)

 

 

(3,607

)

Accounts payable

 

(3,002

)

 

 

4,703

 

Accrued expenses and other liabilities

 

1,234

 

 

 

(2,000

)

Accrued employee liabilities

 

(9,257

)

 

 

(3,823

)

Deferred revenue

 

(16,728

)

 

 

(2,527

)

Operating lease liabilities

 

(3,200

)

 

 

(3,572

)

Net cash provided by operating activities

 

32,870

 

 

 

14,593

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(2,655

)

 

 

(1,657

)

Purchases of short-term investments

 

(90,399

)

 

 

(61,745

)

Maturities of short-term investments

 

68,486

 

 

 

88,228

 

Cash paid for acquisition

 

—

 

 

 

(4,524

)

Net cash (used in) provided by investing activities

 

(24,568

)

 

 

20,302

 

Cash flows from financing activities:

 

 

 

Proceeds from issuance of common stock upon exercise of stock options

 

1,592

 

 

 

537

 

Net cash provided by financing activities

 

1,592

 

 

 

537

 

Effect of exchange rates on cash and cash equivalents

 

(247

)

 

 

(283

)

Net increase in cash and cash equivalents

 

9,647

 

 

 

35,149

 

Cash and cash equivalents, beginning of period

 

256,065

 

 

 

203,239

 

Cash and cash equivalents, end of period

$

265,712

 

 

$

238,388

 

ZUORA, INC.

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES

(in thousands, except percentages)

(unaudited)

 

Subscription Gross Margin

Three Months Ended

April 30,

 

2024

 

2023

Reconciliation of cost of subscription revenue:

 

 

 

GAAP cost of subscription revenue

$

20,689

 

 

$

20,588

 

Less:

 

 

 

Stock-based compensation

 

(1,583

)

 

 

(2,359

)

Amortization of acquired intangibles

 

(608

)

 

 

(738

)

Workforce reductions

 

(166

)

 

 

(38

)

Non-GAAP cost of subscription revenue

$

18,332

 

 

$

17,453

 

GAAP subscription gross margin

 

79

%

 

 

77

%

Non-GAAP subscription gross margin

 

81

%

 

 

81

%

 

Professional Services Gross Margin

 

Three Months Ended

April 30,

 

2024

 

2023

Reconciliation of cost of professional services revenue:

 

 

 

GAAP cost of professional services revenue

$

14,372

 

 

$

16,758

 

(Less) Add:

 

 

 

Stock-based compensation

 

(2,038

)

 

 

(3,021

)

Workforce reductions

 

6

 

 

 

—

 

Non-GAAP cost of professional services revenue

$

12,340

 

 

$

13,737

 

GAAP professional services gross margin

 

(33

)%

 

 

(25

)%

Non-GAAP professional services gross margin

 

(14

)%

 

 

(3

)%

ZUORA, INC.

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)

(in thousands, except percentages)

(unaudited)

 

Total Gross Margin

 

Three Months Ended

April 30,

 

2024

 

2023

Reconciliation of gross profit:

 

 

 

GAAP gross profit

$

74,708

 

 

$

65,749

 

Add:

 

 

 

Stock-based compensation

 

3,621

 

 

 

5,380

 

Amortization of acquired intangibles

 

608

 

 

 

738

 

Workforce reductions

 

160

 

 

 

38

 

Non-GAAP gross profit

$

79,097

 

 

$

71,905

 

GAAP gross margin

 

68

%

 

 

64

%

Non-GAAP gross margin

 

72

%

 

 

70

%

  Operating (Loss) Income and Operating Margin

 

Three Months Ended

April 30,

 

2024

 

2023

Reconciliation of (loss) income from operations:

 

 

 

GAAP loss from operations

$

(3,972

)

 

$

(20,179

)

Add:

 

 

 

Stock-based compensation

 

18,461

 

 

 

25,224

 

Shareholder matters

 

2,765

 

 

 

35

 

Workforce reduction

 

700

 

 

 

219

 

Amortization of acquired intangibles

 

608

 

 

 

738

 

Acquisition-related expenses

 

—

 

 

 

34

 

Non-GAAP income from operations

$

18,562

 

 

$

6,071

 

GAAP operating margin

 

(4

)%

 

 

(20

)%

Non-GAAP operating margin

 

17

%

 

 

6

%

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

April 30,

 

2024

 

2023

Reconciliation of net (loss) income:

 

 

 

GAAP net loss

$

(13,708

)

 

$

(19,295

)

Add:

 

 

 

Stock-based compensation

 

18,461

 

 

 

25,224

 

Change in fair value of debt conversion and warrant liabilities

 

7,928

 

 

 

(30

)

Shareholder matters

 

2,765

 

 

 

35

 

Workforce reductions

 

700

 

 

 

219

 

Amortization of acquired intangibles

 

608

 

 

 

738

 

Acquisition-related expenses

 

—

 

 

 

34

 

Non-GAAP net income

$

16,754

 

 

$

6,925

 

GAAP net loss per share, basic and diluted1

$

(0.09

)

 

$

(0.14

)

Non-GAAP net income per share, basic and diluted1

$

0.11

 

 

$

0.05

 

_________________________________

(1) For the three months ended April 30, 2024 and 2023, GAAP and Non-GAAP net (loss) income per share are calculated based upon 146.7 million and 136.2 million basic and diluted weighted-average shares of common stock, respectively.

Adjusted Free Cash Flow

 

Three Months Ended

April 30,

 

2024

 

2023

Net cash provided by operating activities (GAAP)

$

32,870

 

 

$

14,593

 

Add:

 

 

 

Shareholder matters

 

1,188

 

 

 

27

 

Acquisition-related expenses

 

—

 

 

 

16

 

Less:

 

 

 

Purchases of property and equipment

 

(2,655

)

 

 

(1,657

)

Adjusted free cash flow (non-GAAP)

$

31,403

 

 

$

12,979

 

Net cash (used in) provided by investing activities (GAAP)

$

(24,568

)

 

$

20,302

 

Net cash provided by financing activities (GAAP)

$

1,592

 

 

$

537

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240522078472/en/

Investor Relations Contact: Luana Wolk investorrelations@zuora.com 650-419-1377

Media Relations Contact: Margaret Juhnke press@zuora.com 619-609-3919