Investors might want to bet on Zuora (ZUO) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.The power of a changing e ...

Customer Base and Revenue - As of January 31, 2024, the company had 461 customers with ACV equal to or greater than $250,000, representing over 80% of total ACV, compared to 431 and 369 customers in 2023 and 2022, respectively[56] - No single customer accounted for more than 10% of Zuora's revenue or accounts receivable balance in any of the periods presented[427] - Subscription revenue recognized ratably over contract terms, typically between one and five years, making immediate impact of renewals or new agreements difficult to discern[192] - Service level commitments in customer contracts could lead to credits, refunds, or contract terminations if not met, potentially harming revenue and reputation[194] - Revenue from the United States for fiscal year 2024 was $275,711 thousand, representing 64% of total revenue, while revenue from other countries was $155,950 thousand, representing 36%[494] - Total remaining non-cancellable performance obligations under subscription contracts as of January 31, 2024, were approximately $593.9 million, with 54% expected to be recognized as revenue over the next 12 months[493] - Deferred revenue recognized during the fiscal year ended January 31, 2024, was $164,694 thousand, compared to $147,036 thousand in 2023 and $126,245 thousand in 2022[493] Employee and Management Composition - The company had 1,618 employees as of January 31, 2024, with 56% (910 employees) located outside the United States, primarily in Asia, Europe, and Australia[65] - The company's executive management team was comprised of 30% women and 40% self-identified as coming from certain other underrepresented groups as of January 31, 2024[70] - The company's Board of Directors was comprised of 33% women and 33% members of certain other underrepresented groups as of January 31, 2024[70] - The company's employee resource groups (ZRGs) had nine groups covering a wide variety of interests as of January 31, 2024[68] Financial Performance and Metrics - Net loss for the year ended January 31, 2024 was $68.2 million[396] - Total stockholders' equity as of January 31, 2024 was $133.7 million[396] - Stock-based compensation expense for the year ended January 31, 2024 was $101.1 million[396] - The company had cash and cash equivalents and short-term investments of $514.2 million as of January 31, 2024[369] - Contract assets totaled $1.4 million as of January 31, 2024, compared to $1.3 million as of January 31, 2023[421] - Advertising expense was not material for the periods presented[425] - The company has recorded a full valuation allowance against its deferred tax assets due to uncertainty of realization[443] - Net loss for fiscal year 2024 was $68.193 million, with a basic and diluted net loss per share of $0.49[538] - Sales and marketing expenses represented approximately 39% of total revenue for the fiscal year ended January 31, 2024[98] Intellectual Property and Patents - The company had 55 issued patents expiring between 2032 and 2041, and 32 patent applications pending in the U.S. and foreign jurisdictions as of January 31, 2024[77] Corporate Social Responsibility and Donations - The company's ZEOs volunteered over 3,500 hours in fiscal 2024 to mission-aligned nonprofits[74] - The company made a $0.5 million cash donation in fiscal 2024 to the Zuora Impact Fund[75] Sales and Marketing Strategy - The company's sales teams are organized by geographic territories, new and install base, and industry verticals, with plans to continue investing in the direct sales force[59] Investments and Financial Instruments - Short-term investments as of January 31, 2024, had a total fair value of $258.12 million, with U.S. government securities at $98.249 million, corporate bonds at $129.885 million, and commercial paper at $29.986 million[465] - The company's cash equivalents as of January 31, 2024, totaled $211.129 million, primarily consisting of money market funds at $207.632 million and corporate bonds at $3.497 million[468] - Warrant liability and debt conversion liability as of January 31, 2024, were $11.992 million and $6.848 million, respectively, classified as Level 3 liabilities[468] - The company's cash, cash equivalents, and short-term investments are primarily deposited with one financial institution, regularly exceeding federally insured limits[426] - The company issued $400.0 million in 2029 Notes to support growth and business challenges[197] - The net carrying amount of the 2029 Notes as of January 31, 2024, was $359.5 million, with an estimated fair value of $300.2 million, classified as a Level 3 measurement[471] - The company issued convertible senior notes (2029 Notes) with an aggregate principal amount of $400 million, bearing an interest rate of 3.95% per annum[482] - Total interest expense related to the 2029 Notes for fiscal year 2024 was $21,320 thousand, including $11,999 thousand in contractual interest expense and $9,321 thousand in amortization of deferred loan costs[489] - The company has a $30.0 million revolving credit facility with Silicon Valley Bank, maturing in October 2025, with no amounts drawn as of January 31, 2024[492] - The company issued 7.5 million warrants to Silver Lake, exercisable at $20.00, $22.00, and $24.00 per share, all of which were outstanding as of January 31, 2024[532] Accounting and Financial Reporting - Revenue recognition for subscription services occurs ratably over the contract term, with contract assets resulting when revenue recognition precedes billing[421] - The company's accounts receivable are reported at the principal amount outstanding, net of the allowance for credit losses, which is based on historical loss patterns and collection risk evaluation[432] - The company applies a two-step model under ASC 805 to assess acquisitions, determining whether a transaction represents an asset acquisition or a business combination[435] - Business combinations are accounted for using the acquisition method, with assets and liabilities recorded at fair value, and any excess consideration recorded as goodwill[436] - Internal-use software is amortized over an estimated useful life of generally three years[439] - Property and equipment are depreciated over estimated useful lives of generally three to five years[434] - The company recognized impairment charges totaling $3.8 million in fiscal 2024 related to excess office space, capitalized internal-use software, and purchased assets[440] - Impairment charges for fiscal years ended January 31, 2024, 2023, and 2022 were $2.2 million, $4.5 million, and $12.8 million respectively, related to ROU assets, leasehold improvements, and furniture and fixtures[472] - Prepaid expenses and other current assets totaled $23.261 million as of January 31, 2024, compared to $24.285 million in 2023[473] - Capitalized internal-use software costs for fiscal year ended January 31, 2024, were $7.620 million, with total capitalized internal-use software net of accumulated amortization at $15.483 million[475] - Goodwill balance increased from $53.991 million in 2023 to $56.657 million in 2024, with additions from acquisitions and foreign currency translation effects[479] - Accrued expenses and other current liabilities totaled $32.157 million as of January 31, 2024, down from $103.678 million in 2023, primarily due to a decrease in litigation settlement liabilities[481] - Total depreciation and amortization expense for fiscal year 2024 was $9,229 thousand, compared to $9,668 thousand in 2023 and $11,430 thousand in 2022[476] - Purchased intangible assets amortization expense for fiscal year 2024 was $2,690 thousand, compared to $2,251 thousand in 2023 and $2,050 thousand in 2022[477] - The company's lease contracts often include lease and non-lease components, with short-term leases (12 months or less) not recognizing ROU assets and lease liabilities[458] - Lease liabilities recognized at the present value of lease payments, with ROU assets adjusted for lease payments, incentives, and direct costs[456] - Amortization expense of deferred loan costs for 2029 Notes was $9.3 million in fiscal 2024 and $6.6 million in fiscal 2023[461] - Warrant liability balance increased from $2,829 thousand in January 2023 to $11,992 thousand in January 2024 due to reclassification and fair value changes[469] - Debt conversion liability balance increased from $0 in January 2023 to $6,848 thousand in January 2024 due to initial measurement and fair value changes[470] - Property and equipment, net decreased from $27,159 thousand in January 2023 to $25,961 thousand in January 2024, with impairments recorded on leasehold improvements and furniture[474] - The debt conversion liability's fair value was measured using a binomial lattice model, with key inputs including a fair value of common stock at $9.14 and an expected volatility of 47.5%[491] - The total lease payments for long-term operating lease liabilities amount to $50,990 thousand, with a present value of $43,860 thousand after deducting imputed interest of $7,130 thousand[498] - The weighted-average remaining operating lease term decreased from 6.7 years in 2023 to 5.9 years in 2024, with a weighted-average discount rate increasing from 4.8% to 5.1%[498] - Cash paid for operating leases in 2024 was $13,559 thousand, slightly higher than $12,802 thousand in 2023 and $13,701 thousand in 2022[498] - The company recognized impairment charges of $2,219 thousand in 2024, $4,537 thousand in 2023, and $12,783 thousand in 2022 for excess office spaces[499] - Total operating lease liabilities as of January 31, 2024, were $43,860 thousand, compared to $47,164 thousand in 2023[497] - Operating lease cost for fiscal year 2024 was $8,599 thousand, compared to $9,933 thousand in 2023 and $12,681 thousand in 2022[497] Legal and Compliance - Compliance with anti-corruption and anti-money laundering laws, including FCPA, is critical to avoid penalties and adverse consequences[201] - The company settled Federal and State Class Actions in 2023, paying an aggregate of $75.5 million, with $7.2 million funded by insurance proceeds[504] - The company settled derivative litigation in 2023, agreeing to pay $2.0 million for plaintiffs' attorney fees, which was covered by insurance carriers[506] Tax and Valuation Allowances - As of January 31, 2024, the company has U.S. federal and state net operating loss carryforwards of approximately $552.3 million and $376.4 million, respectively, available to offset future taxable income[510] - The total gross unrecognized tax benefits increased from $18.4 million in 2023 to $25.8 million in 2024, with $7.3 million potentially reducing the effective tax rate if recognized[514] - The valuation allowance for deferred tax assets increased by $10.2 million in 2024 and $58.4 million in 2023, reflecting the likelihood that these assets will not be utilized[509] - Federal and state R&D tax credits available to offset future taxes as of January 31, 2024 are $24.9 million and $22.8 million, respectively[511] Stock and Equity Compensation - The company's stock-based compensation awards are measured using the Black-Scholes option-pricing model, with fair value determined based on the company's common stock price[447] - Stock-based compensation expense for fiscal year 2024 was $101.052 million, with the largest allocation to Sales and Marketing at $32.116 million[531] - Unrecognized compensation costs related to unvested equity awards as of January 31, 2024, totaled $126.245 million, with RSUs accounting for $102.404 million[531] - As of January 31, 2024, the company had 137.8 million shares of Class A common stock and 8.2 million shares of Class B common stock issued and outstanding[519] - 25.0 million shares of Class A common stock are reserved and available for issuance under the 2018 Equity Incentive Plan as of January 31, 2024[522] - RSUs outstanding as of January 31, 2024 are 11,686 thousand with a weighted-average grant date fair value of $10.24[526] - The fair value of ESPP purchase rights for fiscal year 2024 ranges from $8.69 to $11.55 with expected volatility between 34.6% and 45.7%[530] - The liability-classified warrants' fair value as of January 31, 2024 is $9.14 with an expected volatility of 41.8% and a risk-free interest rate of 3.9%[534] - Stock options outstanding as of January 31, 2024 are 6,083 thousand with a weighted-average exercise price of $9.21 and an aggregate intrinsic value of $15.984 million[523] - PSUs outstanding as of January 31, 2024 are 2,310 thousand with a weighted-average grant date fair value of $14.31[528] - Potentially dilutive securities not included in diluted per share calculations totaled 47.889 million shares as of January 31, 2024, including 20.000 million shares from 2029 Notes conversion[539] Acquisitions and Contingent Considerations - The Zephr acquisition purchase consideration is $47.9 million, including $43.1 million in cash payments and $4.8 million in contingent consideration[541] - Transaction costs for the Zephr acquisition are $0.2 million and $3.2 million for fiscal years 2024 and 2023, respectively[548] - The company paid $4.5 million to settle contingent consideration in fiscal 2024, following a revaluation to $4.4 million in fiscal 2023[543] - The Zephr acquisition resulted in recorded goodwill due to expected synergies and value creation for shareholders, though the goodwill is not deductible for income tax purposes[544] Risks and Market Challenges - Future volatility in stock price may reduce access to equity capital, impacting ability to fund business growth and respond to challenges[200] - The company faces risks related to attracting new customers and retaining existing ones, particularly in markets with significant prior investments in custom-built solutions[98] - The company's growth depends on market adoption of monetization platform software and related solutions, which may develop slower than expected[105] Other Financial Obligations - The company has a contractual obligation to make $10.1 million in purchases of cloud computing services by September 2024[507] - Accumulated other comprehensive loss as of January 31, 2024 is $859 thousand, with a foreign currency translation adjustment of $672 thousand and an unrealized gain on available-for-sale securities of $732 thousand[521]

After reaching an important support level, Zuora (ZUO) could be a good stock pick from a technical perspective. ZUO surpassed resistance at the 200-day moving average, suggesting a long-term bullish trend.A useful tool for traders and analysts, the 200-day simple moving average helps determine long-term market trends for stocks, commodities, indexes, and other financial instruments. It moves higher or lower in conjunction with longer-term price performance, and serves as a support or resistance level.ZUO ha ...

Zuora (ZUO) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this enterprise software company, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate ...

Zuora (ZUO) reached a significant support level, and could be a good pick for investors from a technical perspective. Recently, ZUO broke through the 50-day moving average, which suggests a short-term bullish trend.One of the three major moving averages, the 50-day simple moving average is commonly used by traders and analysts to determine support or resistance levels for different types of securities. However, the 50-day is considered to be more important since it's the first marker of an up or down trend. ...

Zuora (ZUO) closed the last trading session at $8.62, gaining 0.4% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $11.79 indicates a 36.8% upside potential.The average comprises seven short-term price targets ranging from a low of $8 to a high of $15, with a standard deviation of $2.48. While the lowest estimate indicates a decline of 7.2% from the current price level, the most op ...

Financial Data and Key Metrics Changes - Subscription revenue for Q4 was $100.2 million, growing 12% year-over-year, while full-year subscription revenue reached $383.4 million, representing a 13% increase year-over-year [85][41] - Non-GAAP operating income for Q4 was $15.9 million, exceeding guidance by nearly $3 million, with a non-GAAP operating margin of 14% for the quarter [87] - Adjusted free cash flow improved by $72 million year-over-year, totaling $44.3 million for the full year [84][91] Business Line Data and Key Metrics Changes - Professional services revenue decreased by 22% year-over-year in Q4, ending at $10.5 million, and for the full year, it was $48.3 million, a decline of 16% [54] - Non-GAAP professional services gross margin for Q4 was negative 10%, a decline of 215 basis points year-over-year [55] - The company processed $139.9 billion in billing transactions and payment volume, a growth of 10% year-over-year, and $212.8 billion in revenue volume, a growth of 12% year-over-year [59] Market Data and Key Metrics Changes - The trailing 12-month dollar-based retention rate (DBRR) decreased by two points, primarily due to one large churn [41][57] - Total remaining performance obligations (RPO) ended the year at $594 million, growing 19% year-over-year [58] - The company ended the quarter with 461 customers with a contract size at or above $250,000, up 30 year-over-year [58] Company Strategy and Development Direction - The company aims to balance growth and profitability, committing to the Rule of 40 framework, ending the year at 24% [36] - The strategy includes focusing on faster, lighter lands and adding new logos to the installed base, with a commitment to improving go-to-market efficiency [48][81] - The company plans to invest in consumption-based billing models as more technology companies adopt AI [50] Management's Comments on Operating Environment and Future Outlook - Management noted a cautious outlook among enterprises regarding investments, anticipating continued scrutiny in the office of the CFO throughout fiscal 2025 [93][146] - The company experienced unexpected churn from two large customers, which impacted revenue growth expectations for the upcoming fiscal year [79][66] - Management expressed confidence in customer retention and product stickiness, highlighting that once customers go live, they tend to remain long-term [89][125] Other Important Information - The company announced a workforce reduction of approximately 8% to drive efficiency, incurring about $7 million in restructuring charges in Q4 [60][61] - For fiscal 2025, the company expects subscription revenue of $410 million to $414 million and total revenue of $451 million to $459 million [94] Q&A Session Summary Question: What types of customers are being added? - The company noted a diverse mix of new logos, including significant customers like Sony and Infor, with a focus on deals between $100k and $500k [64][73] Question: How much of the ARR growth deceleration is due to churn? - Management indicated that the two logo churns contributed to a point of headwind in both ARR growth and DBRR, with a cautious approach to larger deals [66][98] Question: What is the outlook for invoice volume growth? - The company expects invoice volume growth to normalize over time, with a focus on subscription and consumption-based billing models [116][143] Question: How is the company addressing go-to-market efficiency? - The company is making investments in marketing and pipeline capabilities, focusing on generating higher quality demand [109][135] Question: Will the two churned customers potentially return? - Management expressed optimism about the possibility of working with the churned customers again when their IT projects resume [112][138]

[Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) [Fourth Quarter Fiscal 2024 Financial Results](index=1&type=section&id=Fourth%20Quarter%20Fiscal%202024%20Financial%20Results) Zuora achieved strong top-line growth and significant profitability improvements in Q4 FY2024, with total revenue increasing 7% to $110.7 million, a substantial reduction in GAAP operating loss, and a shift to Non-GAAP net income of $16.7 million, alongside positive adjusted free cash flow of $14.6 million Q4 FY2024 Financial Highlights (vs. Q4 FY2023) | Financial Metric | Q4 FY2024 | Q4 FY2023 | Change | | :--- | :--- | :--- | :--- | | Subscription Revenue | $100.2M | $89.5M | +12% | | Total Revenue | $110.7M | $103.0M | +7% | | GAAP Loss from Operations | $(17.2)M | $(99.7)M | +82.7% | | Non-GAAP Income from Operations | $15.9M | $2.2M | +623% | | GAAP Net Loss | $(20.8)M | $(107.9)M | +80.7% | | Non-GAAP Net Income (Loss) | $16.7M | $(5.8)M | N/A (Turned to profit) | | Adjusted Free Cash Flow | $14.6M | $(16.9)M | N/A (Turned positive) | [Full Year Fiscal 2024 Financial Results](index=1&type=section&id=Full%20Year%20Fiscal%202024%20Financial%20Results) Zuora reported balanced growth and significant profitability for full fiscal year 2024, with subscription revenue growing 13% to $383.4 million and total revenue increasing 9% to $431.7 million, alongside a 10 percentage point improvement in non-GAAP operating margin and positive adjusted free cash flow of $44.3 million Full Year FY2024 Financial Highlights (vs. FY2023) | Financial Metric | FY2024 | FY2023 | Change | | :--- | :--- | :--- | :--- | | Subscription Revenue | $383.4M | $338.4M | +13% | | Total Revenue | $431.7M | $396.1M | +9% | | GAAP Loss from Operations | $(64.4)M | $(187.5)M | +65.7% | | Non-GAAP Income from Operations | $47.5M | $2.5M | +1793% | | GAAP Net Loss | $(68.2)M | $(198.0)M | +65.6% | | Non-GAAP Net Income (Loss) | $45.9M | $(17.2)M | N/A (Turned to profit) | | Adjusted Free Cash Flow | $44.3M | $(27.8)M | N/A (Turned positive) | - The CEO highlighted that fiscal 2024 was a year of **balanced growth and profitability**, with an acceleration in new customer acquisition through a focus on '**smaller, faster lands**'[2](index=2&type=chunk) [Fourth Quarter Key Metrics and Business Highlights](index=2&type=section&id=Fourth%20Quarter%20Key%20Metrics%20and%20Business%20Highlights) Zuora's key operational metrics at the end of fiscal 2024 showed steady growth, with customers having an ACV of $250,000 or more increasing to 461 and Annual Recurring Revenue (ARR) growing 10% to $403.1 million, complemented by expanded partnerships and new customer acquisitions - Key operational metrics as of January 31, 2024: - **Customers with ACV ≥ $250k:** 461 (up from 431 YoY) - **Dollar-based Retention Rate (DBRR):** 106% (down from 108% YoY) - **Annual Recurring Revenue (ARR):** $403.1 million (up 10% YoY)[7](index=7&type=chunk) - Business highlights include an expanded partnership with Avalara to address complex e-invoicing mandates and new or expanded customer relationships with Toast, Infor, Sony Network Communications, TELUS Corporation, and The Associated Press[7](index=7&type=chunk) [Financial Outlook](index=3&type=section&id=Financial%20Outlook) [First Quarter and Full Fiscal Year 2025 Guidance](index=3&type=section&id=First%20Quarter%20and%20Full%20Fiscal%20Year%202025%20Guidance) Zuora projects continued growth and enhanced profitability for fiscal year 2025, with full-year total revenue expected between $451.0 million and $459.0 million, Non-GAAP income from operations of $79.0 million to $81.0 million, and adjusted free cash flow of at least $80.0 million, alongside anticipated ARR growth of 8-10% and a Dollar-based Retention Rate between 104% and 106% Fiscal 2025 Guidance | Metric | Q1 FY2025 Guidance | Full Year FY2025 Guidance | | :--- | :--- | :--- | | Subscription Revenue | $98.0M - $99.0M | $410.0M - $414.0M | | Total Revenue | $107.8M - $109.8M | $451.0M - $459.0M | | Non-GAAP Income from Operations | $14.0M - $16.0M | $79.0M - $81.0M | | Non-GAAP Net Income per Share | $0.06 - $0.07 | $0.40 - $0.42 | | ARR Growth | - | 8% - 10% | | Dollar-based Retention Rate | - | 104% - 106% | | Adjusted Free Cash Flow | - | $80.0M+ | [Explanation of Key Metrics and Measures](index=3&type=section&id=Explanation%20of%20Key%20Metrics%20and%20Measures) [Key Operational and Financial Metrics](index=3&type=section&id=Key%20Operational%20and%20Financial%20Metrics) The report defines Zuora's key operational metrics, including Annual Contract Value (ACV) as expected subscription revenue, Dollar-based Retention Rate (DBRR) for existing customer revenue retention and growth, and Annual Recurring Revenue (ARR) as the annualized value of active subscription contracts - **Annual Contract Value (ACV):** The subscription revenue expected to be recognized from a customer over the next twelve months, assuming no changes to their subscriptions[11](index=11&type=chunk) - **Dollar-based Retention Rate (DBRR):** Calculated by dividing the current period's ACV from a cohort of customers by that same cohort's ACV from twelve months prior, including upsells, contractions, and attrition[12](index=12&type=chunk) - **Annual Recurring Revenue (ARR):** The annualized recurring value of all active subscription contracts at the end of a period, excluding professional services and contracts under one year[13](index=13&type=chunk)[14](index=14&type=chunk) [Explanation of Non-GAAP Financial Measures](index=4&type=section&id=Explanation%20of%20Non-GAAP%20Financial%20Measures) Zuora uses non-GAAP financial measures to enhance consistency and comparability of operational performance by excluding items like stock-based compensation, amortization of acquired intangibles, and litigation costs, while also reporting revenue on a constant currency basis to isolate foreign exchange impacts - Zuora uses non-GAAP measures to assess performance, prepare budgets, and evaluate business strategies, believing they offer better comparability with past performance and industry peers[17](index=17&type=chunk) - Key items excluded from non-GAAP calculations include: - Stock-based compensation expense - Amortization of acquired intangible assets - Charitable contributions - Non-recurring shareholder litigation costs - Asset impairment charges - Acquisition-related transaction costs - Workforce reduction charges[18](index=18&type=chunk)[22](index=22&type=chunk) - Adjusted free cash flow is a non-GAAP measure calculated from GAAP operating cash flow, excluding acquisition-related costs and non-ordinary course litigation expenses, and including capital expenditures[19](index=19&type=chunk) [Consolidated Financial Statements (GAAP)](index=8&type=section&id=Consolidated%20Financial%20Statements%20(GAAP)) [Condensed Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Zuora's consolidated statement of comprehensive loss for fiscal year 2024 shows total revenue of $431.7 million, a significant reduction in loss from operations to $64.4 million, and a narrowed net loss of $68.2 million compared to the prior year FY2024 vs. FY2023 Statement of Loss (in thousands) | Line Item | Fiscal Year 2024 | Fiscal Year 2023 | | :--- | :--- | :--- | | Total Revenue | $431,661 | $396,087 | | Gross Profit | $284,687 | $242,858 | | Loss from Operations | $(64,407) | $(187,455) | | Net Loss | $(68,193) | $(197,970) | | Net Loss Per Share | $(0.49) | $(1.51) | - Total stock-based compensation expense for fiscal year 2024 was **$101.1 million**, an increase from **$96.4 million** in fiscal year 2023[28](index=28&type=chunk) [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of January 31, 2024, Zuora's balance sheet reflects a stronger financial position with total assets growing to $823.8 million, supported by increased cash and short-term investments, despite a rise in total liabilities primarily due to long-term debt Balance Sheet Highlights (in thousands) | Account | Jan 31, 2024 | Jan 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $256,065 | $203,239 | | Short-term investments | $258,120 | $183,006 | | Total Assets | $823,836 | $668,598 | | Total Liabilities | $690,149 | $571,438 | | Total Stockholders' Equity | $133,687 | $97,160 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For fiscal year 2024, Zuora's cash flow statement shows $18.8 million used in operating activities, $84.3 million used in investing activities, and $156.5 million provided by financing activities, resulting in a net increase of $52.8 million in cash and cash equivalents Cash Flow Summary (in thousands) | Cash Flow Activity | Fiscal Year 2024 | Fiscal Year 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(18,767) | $(20,644) | | Net cash used in investing activities | $(84,277) | $(131,074) | | Net cash provided by financing activities | $156,542 | $241,911 | | Net increase in cash and cash equivalents | $52,826 | $89,732 | [Reconciliation of GAAP to Non-GAAP Measures](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) [Subscription and Professional Services Gross Margin Reconciliation](index=12&type=section&id=Subscription%20and%20Professional%20Services%20Gross%20Margin%20Reconciliation) This section reconciles GAAP to Non-GAAP gross margins, showing that for fiscal year 2024, Non-GAAP subscription gross margin improved to 82% from 79%, and Non-GAAP professional services gross margin improved to (4)% from (3)% FY2024 Subscription Gross Margin Reconciliation | Metric | GAAP | Non-GAAP | | :--- | :--- | :--- | | FY2024 Subscription Gross Margin | 78% | 82% | | FY2023 Subscription Gross Margin | 76% | 79% | FY2024 Professional Services Gross Margin Reconciliation | Metric | GAAP | Non-GAAP | | :--- | :--- | :--- | | FY2024 Prof. Services Gross Margin | (29)% | (4)% | | FY2023 Prof. Services Gross Margin | (25)% | (3)% | [Operating Income and Net Income Reconciliation](index=13&type=section&id=Operating%20Income%20and%20Net%20Income%20Reconciliation) Reconciliation tables highlight the significant difference between GAAP and Non-GAAP profitability for fiscal year 2024, with a GAAP operating loss of $64.4 million adjusted to a Non-GAAP operating income of $47.5 million, and a GAAP net loss of $68.2 million reconciled to a Non-GAAP net income of $45.9 million, primarily due to stock-based compensation and shareholder litigation adjustments FY2024 Operating (Loss) Income Reconciliation (in thousands) | Metric | Amount | | :--- | :--- | | GAAP loss from operations | $(64,407) | | Add: Stock-based compensation | $101,052 | | Add: Other adjustments | $(4,554) | | **Non-GAAP income from operations** | **$47,494** | FY2024 Net (Loss) Income Reconciliation (in thousands) | Metric | Amount | | :--- | :--- | | GAAP net loss | $(68,193) | | Add: Stock-based compensation | $101,052 | | Add: Other adjustments | $13,083 | | **Non-GAAP net income** | **$45,942** | [Adjusted Free Cash Flow and Constant Currency Reconciliation](index=15&type=section&id=Adjusted%20Free%20Cash%20Flow%20and%20Constant%20Currency%20Reconciliation) Zuora's adjusted free cash flow for fiscal 2024 significantly improved to a positive $44.3 million from a negative $27.8 million in fiscal 2023, while constant currency revenue growth rates for subscription (15%) and total revenue (10%) were higher than GAAP, indicating adverse foreign currency impacts FY2024 Adjusted Free Cash Flow Reconciliation (in thousands) | Metric | FY2024 | FY2023 | | :--- | :--- | :--- | | Net cash used in operating activities (GAAP) | $(18,767) | $(20,644) | | Add: Shareholder litigation & Acq. costs | $73,048 | $3,437 | | Less: Purchases of property and equipment | $(9,987) | $(10,634) | | **Adjusted free cash flow (non-GAAP)** | **$44,294** | **$(27,841)** | FY2024 Constant Currency Revenue Growth | Revenue Type | GAAP Growth | Constant Currency Growth | | :--- | :--- | :--- | | Subscription Revenue | 13% | 15% | | Total Revenue | 9% | 10% | [Other Information](index=6&type=section&id=Other%20Information) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section serves as a safe harbor notice, cautioning that the report's financial outlook and future-oriented statements are subject to significant risks and uncertainties, including macroeconomic conditions, market acceptance, competition, and growth management, which could cause actual results to differ materially from projections - The report's forward-looking statements, including the financial outlook for fiscal 2025, are based on current management expectations and are subject to risks that could cause actual results to differ materially[23](index=23&type=chunk) - Key risk factors include ability to attract customers, macroeconomic conditions (inflation, interest rates), market acceptance of monetization platforms, competition, and ability to achieve profitability[23](index=23&type=chunk) [About Zuora, Inc.](index=7&type=section&id=About%20Zuora%2C%20Inc.) Zuora is a leading monetization suite enabling businesses to manage customer-centric models by orchestrating the complete quote-to-cash and revenue recognition process, serving over 1,000 global companies including General Motors, Siemens, and Zoom, with headquarters in Silicon Valley and worldwide offices - Zuora provides a monetization suite that orchestrates the quote-to-cash and revenue recognition process for businesses with customer-centric models[24](index=24&type=chunk) - The company serves **over 1,000 companies**, with notable clients including BMC Software, Box, Caterpillar, General Motors, and Zoom[24](index=24&type=chunk)

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Zuora (NYSE: ZUO), a leading monetization suite for modern businesses, today announced that it will report financial results for its fourth quarter fiscal 2024 ended on January 31, 2024 following the close of market on February 28, 2024. On that day, Zuora’s management team will hold a conference call and webcast at 2:00 p.m. PT / 5:00 p.m. ET to discuss Zuora’s financial results and business highlights. Event: Zuora Fourth Quarter Fiscal 2024 Earnings Conference Call ...

Maskot Investment thesis Our current investment thesis is: ZUO is a market leader, ensuring it should progressively grow over time with limited churn, even if this lags behind its peers. This should drive incremental margin improvement through operating cost leverage, increasing its attractiveness. We struggle to see how ZUO can gain market share and reach an attractive financial profile, but this is less important at its current valuation. All that is required is a continuation of its mild trajectory ...