On May 22, 2024, Zuora Inc (ZUO, Financial) released its 8-K filing for the first quarter of fiscal 2025, showcasing notable financial achievements and operational improvements. Zuora Inc provides cloud-based software on a subscription basis, enabling companies to manage and transform into subscription businesses through its Zuora Central platform and various other products.
Financial Performance and Key Metrics
Zuora Inc reported total revenue of $109.8 million for Q1 FY2025, surpassing the analyst estimate of $108.70 million. Subscription revenue grew by 10% year-over-year to $99.0 million, reflecting the company's strong market position and customer base expansion.
GAAP loss from operations significantly improved to $4.0 million, compared to a loss of $20.2 million in the same quarter last year. Non-GAAP income from operations rose to $18.6 million from $6.1 million year-over-year, indicating enhanced operational efficiency.
Income Statement Highlights
| Metric | Q1 FY2025 | Q1 FY2024 |
|---|---|---|
| Total Revenue | $109.8 million | $103.1 million |
| GAAP Loss from Operations | $4.0 million | $20.2 million |
| Non-GAAP Income from Operations | $18.6 million | $6.1 million |
| GAAP Net Loss | $13.7 million | $19.3 million |
| Non-GAAP Net Income | $16.8 million | $6.9 million |
Balance Sheet and Cash Flow
Zuora Inc's balance sheet remains robust with cash and cash equivalents and short-term investments totaling $547.2 million as of April 30, 2024. The company generated $32.9 million in net cash from operating activities, a significant increase from $14.6 million in the prior year. Adjusted free cash flow also saw a substantial rise to $31.4 million from $13.0 million year-over-year.
Operational Highlights and Strategic Initiatives
Zuora Inc continues to expand its customer base, with customers having an annual contract value (ACV) of $250,000 or more increasing to 451 from 436 a year ago. The company's dollar-based retention rate (DBRR) stood at 104%, slightly down from 108% in the previous year. Annual Recurring Revenue (ARR) grew by 8% to $404.4 million.
The company also announced the acquisition of Togai, a leading metering and rating solution, to enhance its usage-based offerings. This acquisition is expected to further strengthen Zuora's position in the subscription economy.
Commentary and Outlook
“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.”
For the second quarter of fiscal 2025, Zuora Inc expects subscription revenue between $101.0 million and $102.0 million, and total revenue between $111.5 million and $113.5 million. For the full fiscal year 2025, the company projects total revenue in the range of $451.0 million to $459.0 million, with non-GAAP net income per share between $0.41 and $0.43.
Zuora Inc's strong financial performance and strategic initiatives underscore its potential for sustained growth in the subscription economy. Investors and stakeholders can access the full earnings release and additional details through the provided 8-K filing.
Explore the complete 8-K earnings release (here) from Zuora Inc for further details.
