Zuora(US:ZUO)2024-08-29 20:16Revenue Performance - Subscription revenue for the three months ended July 31, 2024, was $104.1 million, an increase of $8.6 million, or 9% year-over-year[109]. - Total revenue for the same period was $115.4 million, an increase of $7.3 million, or 7% year-over-year[109]. - Annual recurring revenue (ARR) increased to $412.3 million as of July 31, 2024, up 7% from $384.2 million in the prior year[116]. - Total revenue for the six months ended July 31, 2024, reached $225,165, up from $211,143 in the prior year, reflecting a growth of 6.6%[131]. - Subscription revenue increased by $17.8 million, or 10%, for the six months ended July 31, 2024, driven by higher transaction volume and sales to new customers[162]. - Total revenue for the three months ended July 31, 2024, was $225.2 million, an increase of $14.0 million, or 7%, compared to $211.1 million in the same period in 2023[161]. Profitability and Loss - Loss from operations improved to $9.7 million, or 8% of total revenue, compared to a loss of $18.2 million, or 17% of total revenue in the prior year[109]. - Gross profit was $78.1 million, representing 68% of total revenue, compared to $70.3 million, or 65% of total revenue in the previous year[112]. - The net loss for the three months ended July 31, 2024, was $7,221, significantly improved from a net loss of $22,562 in the same period of 2023[131]. - Non-GAAP net income for the three months ended July 31, 2024, was $29,106, compared to $10,022 for the same period in 2023, indicating a significant improvement[145]. - GAAP net loss for the three months ended July 31, 2024, was $(7,221), an improvement from $(22,562) in the same period in 2023[145]. Operating Expenses - Operating expenses for the three months ended July 31, 2024, totaled $87,793, slightly down from $88,506 in the same period of 2023[131]. - Research and development expenses for the three months ended July 31, 2024, were $26,454, slightly up from $26,256 in the same period of 2023[131]. - Sales and marketing expense decreased by $6.7 million, or 16%, for the three months ended July 31, 2024, compared to the same period in 2023, primarily due to workforce reduction and lower outside professional services costs[156]. - General and administrative expense increased by $5.8 million, or 30%, for the three months ended July 31, 2024, driven by higher consulting and legal costs related to acquisitions and shareholder matters[158]. Cash Flow and Investments - For the six months ended July 31, 2024, the company reported a net cash provided by operating activities of $44.3 million, an increase of $24.3 million compared to the same period last year[180]. - Cash and cash equivalents and short-term investments totaled $543.5 million as of July 31, 2024, primarily invested in highly rated securities maturing in one year or less[174]. - Net cash used in investing activities increased by $165.9 million to $70.9 million for the six months ended July 31, 2024, primarily due to increased cash used for short-term investments[182]. - The company expects cash generated from operations to increase, improving its ability to fund operations and repay debt obligations[175]. - The company has a $30.0 million credit line available to fund ongoing operations and potential future acquisitions[175]. Customer Metrics - The number of customers with annual contract value (ACV) equal to or greater than $250,000 increased to 445, compared to 444 in the previous year[110]. - The dollar-based retention rate was 104% as of July 31, 2024, down from 107% in the prior year, primarily due to customer churn[115]. - Two deals were closed in the quarter with ACV equal to or greater than $1.0 million[111]. Acquisitions and Strategic Moves - The company completed the acquisition of Sub(x), an AI solution for digital publishing and media companies, in August 2024[109]. - The company purchased Togai for $19.8 million, net of cash acquired, during the six months ended July 31, 2024[181]. Interest and Taxation - Interest expense for the three months ended July 31, 2024, was $6,965, compared to $4,607 in the same period of 2023, indicating an increase in financing costs[131]. - The effective tax rate for the three months ended July 31, 2024, was 24.0%, compared to (2.7)% in the same period in 2023, primarily due to a valuation allowance release benefit[160]. - The company recorded a tax benefit of $(1.9) million for the six months ended July 31, 2024, compared to a tax provision of $1.1 million in the same period of 2023, reflecting a change of $(2.98) million or (282)%[173]. Financial Ratios and Margins - Non-GAAP subscription gross margin for the three months ended July 31, 2024, was 82%, up from 81% in the same period of 2023[141]. - Non-GAAP operating margin for the three months ended July 31, 2024, was 22%, compared to 9% for the same period in 2023, showing significant operational efficiency[144]. - GAAP operating margin for the three months ended July 31, 2024, was (8)%, an improvement from (17)% in the same period in 2023[144]. - Gross margin for subscription services increased to 79% for the six months ended July 31, 2024, compared to 77% in the same period in 2023[166]. - General and administrative expense increased to 20% of total revenue during the six months ended July 31, 2024, compared to 18% in the same period in 2023[171].