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Zuora (ZUO) Incurs Loss in Q1, Subscription Revenues Up Y/Y
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Zuora (ZUO - Free Report) reported first-quarter fiscal 2022 loss of 2 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 4 cents. Notably, the company had reported a loss of 6 cents in the year-ago quarter.
Moreover, revenues of $80.3 million beat the consensus mark by 1.7%. The top line also improved 8.7% year over year.
The solid performance was led by strength in Zuora’s billing platform. Customer usage of Zuora’s solutions grew, with $17 billion in transaction volume, reflecting an increase of 38% year over year.
Professional Services Revenues (18.9% of total revenues) declined 10.7% year over year to $15.2 million.
In the fiscal first quarter, the number of customers with annual contract value — equal to or greater than $100K — was 677, up 5% year over year.
The dollar-based retention rate improved 3 basis points (bps) sequentially at 103%. Zuora enhanced relations with customers including F5 Network (FFIV - Free Report) , GoPro (GPRO - Free Report) and The Mainichi newspapers. Zuora also announced a research partnership with Boston Consulting Group and Zuora’s Think Tank.
Meanwhile, non-GAAP gross margin expanded 410 bps year over year to 64.5%. Non-GAAP subscription gross margin was 79%, which remained unchanged year -over -year.
Research & development expenses, as a percentage of revenues, decreased 190 bps on a year-over-year basis to 19%. Moreover, general & administrative (G&A) expenses, as a percentage of revenues, contracted 130 bps year over year to14.1%.
However, sales & marketing expenses expanded 10 bps to 34.6%.
Total non-GAAP operating expenses, as a percentage of revenues, were 67.7%, down 320 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of April 30, 2021, Zuora had cash, cash equivalents and short-term investments of $197.4 million compared with $186.6 million as of Jan 31, 2021.
Free cash flow was $8.6 million compared with free cash flow of $2.1 million in the previous quarter.
Guidance
For the second quarter of fiscal 2022, Zuora expects subscription revenues in the range of $67.5 million to $69.5 million. Revenues are expected between $82.5 million and $84.5 million. The Zacks Consensus Estimate for revenues is currently pegged at $80 million, indicating growth of 6.8% year over year.
Non-GAAP loss from operations is expected between $4.5 million and $5 million.
Non-GAAP loss is anticipated between 3 cents per share and 4 cents per share. The consensus mark for the same stands at 2 cents per share.
For fiscal 2022, Zuora expects subscription revenues to be $274-$278 million. Revenues are expected between $337 million and $339 million. The Zacks Consensus Estimate for revenues is currently pegged at $336 million, indicating growth of 10% year over year.
Non-GAAP loss from operations is expected between $8 million and $12 million.
Non-GAAP loss is expected between 6 cents per share and 10 cents per share. The consensus mark for the same is pegged at 8 cents per share.
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Zuora (ZUO) Incurs Loss in Q1, Subscription Revenues Up Y/Y
Zuora (ZUO - Free Report) reported first-quarter fiscal 2022 loss of 2 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 4 cents. Notably, the company had reported a loss of 6 cents in the year-ago quarter.
Moreover, revenues of $80.3 million beat the consensus mark by 1.7%. The top line also improved 8.7% year over year.
The solid performance was led by strength in Zuora’s billing platform. Customer usage of Zuora’s solutions grew, with $17 billion in transaction volume, reflecting an increase of 38% year over year.
Moreover, this Zacks Rank #3 (Hold) company benefited from a resilient subscription-based business model similar to its Zacks Internet Software industry peer Workday (WDAY - Free Report) .You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Notably, Workday reported first-quarter fiscal 2022 subscription revenues (87.2% of total revenues) of $1.03 billion, up 17% year over year.
Markedly, Zuora’s subscription revenues accounted for 81.1% of total revenues. The figure improved 14.5% year over year to $65.1.
Zuora, Inc. Price, Consensus and EPS Surprise
Zuora, Inc. price-consensus-eps-surprise-chart | Zuora, Inc. Quote
Quarter Details
Professional Services Revenues (18.9% of total revenues) declined 10.7% year over year to $15.2 million.
In the fiscal first quarter, the number of customers with annual contract value — equal to or greater than $100K — was 677, up 5% year over year.
The dollar-based retention rate improved 3 basis points (bps) sequentially at 103%. Zuora enhanced relations with customers including F5 Network (FFIV - Free Report) , GoPro (GPRO - Free Report) and The Mainichi newspapers. Zuora also announced a research partnership with Boston Consulting Group and Zuora’s Think Tank.
Meanwhile, non-GAAP gross margin expanded 410 bps year over year to 64.5%. Non-GAAP subscription gross margin was 79%, which remained unchanged year -over -year.
Research & development expenses, as a percentage of revenues, decreased 190 bps on a year-over-year basis to 19%. Moreover, general & administrative (G&A) expenses, as a percentage of revenues, contracted 130 bps year over year to14.1%.
However, sales & marketing expenses expanded 10 bps to 34.6%.
Total non-GAAP operating expenses, as a percentage of revenues, were 67.7%, down 320 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of April 30, 2021, Zuora had cash, cash equivalents and short-term investments of $197.4 million compared with $186.6 million as of Jan 31, 2021.
Free cash flow was $8.6 million compared with free cash flow of $2.1 million in the previous quarter.
Guidance
For the second quarter of fiscal 2022, Zuora expects subscription revenues in the range of $67.5 million to $69.5 million. Revenues are expected between $82.5 million and $84.5 million. The Zacks Consensus Estimate for revenues is currently pegged at $80 million, indicating growth of 6.8% year over year.
Non-GAAP loss from operations is expected between $4.5 million and $5 million.
Non-GAAP loss is anticipated between 3 cents per share and 4 cents per share. The consensus mark for the same stands at 2 cents per share.
For fiscal 2022, Zuora expects subscription revenues to be $274-$278 million. Revenues are expected between $337 million and $339 million. The Zacks Consensus Estimate for revenues is currently pegged at $336 million, indicating growth of 10% year over year.
Non-GAAP loss from operations is expected between $8 million and $12 million.
Non-GAAP loss is expected between 6 cents per share and 10 cents per share. The consensus mark for the same is pegged at 8 cents per share.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency have sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
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