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Zuora Reports Fourth Quarter and Full Year Fiscal 2021 Results

March 11, 2021
  • Fourth quarter subscription revenue grew 19% year-over-year
  • Full year subscription revenue grew 17% year-over-year
  • Customers with annual contract value (ACV) equal to or greater than $100,000 increased to 676 customers, or 8% year-over-year

REDWOOD CITY, Calif.--(BUSINESS WIRE)-- Zuora, Inc. (NYSE: ZUO), the leading cloud-based subscription management platform provider, today announced financial results for its fiscal fourth quarter and full year ended January 31, 2021.

"We had a strong finish to the year, exceeding expectations across our operating results," said Tien Tzuo, founder and CEO of Zuora. "I’m incredibly proud of our employees for their execution - we innovated, we focused on our customers, and we continued to grow the business. Enterprises are coming to Zuora for our technology, expertise and partnerships, and we’re helping them win in the Subscription Economy.”

Fourth Quarter Fiscal 2021 Financial Results:

  • Revenue: Total revenue was $79.3 million, an increase of 13% year-over-year. Subscription revenue was $65.1 million, an increase of 19% year-over-year.
  • GAAP Loss from Operations: GAAP loss from operations was $18.6 million, compared to a loss from operations of $24.4 million in the fourth quarter of fiscal 2020.
  • Non-GAAP Loss from Operations: Non-GAAP loss from operations was $1.8 million, compared to a non-GAAP loss from operations of $10.5 million in the fourth quarter of fiscal 2020.
  • GAAP Net Loss: GAAP net loss was $18.8 million, or 24% of revenue, compared to a net loss of $23.8 million, or 34% of revenue, in the fourth quarter of fiscal 2020. GAAP net loss per share was $0.16 based on 119.9 million weighted average shares outstanding, compared to a net loss per share of $0.21 based on 113.2 million weighted average shares outstanding in the fourth quarter of fiscal 2020.
  • Non-GAAP Net Loss: Non-GAAP net loss was $2.0 million, compared to a non-GAAP net loss of $9.8 million in the fourth quarter of fiscal 2020. Non-GAAP net loss per share was $0.02 based on 119.9 million weighted average shares outstanding, compared to a non-GAAP net loss per share of $0.09 based on 113.2 million weighted average shares outstanding in the fourth quarter of fiscal 2020.
  • Operating Cash Flow: Net cash provided by operating activities was $3.1 million, compared to net cash provided by operating activities of $4.0 million in the fourth quarter of fiscal 2020.
  • Free Cash Flow: Free cash flow was $2.1 million compared to negative $4.5 million in the fourth quarter of fiscal 2020.
  • Cash and Cash Equivalents and Short-term Investments: Cash and cash equivalents and short-term investments were $186.6 million as of January 31, 2021.

Full Year Fiscal 2021 Financial Results:

  • Revenue: Total revenue was $305.4 million, an increase of 11% year-over-year. Subscription revenue was $242.3 million, an increase of 17% year-over-year.
  • GAAP Loss from Operations: GAAP loss from operations was $73.9 million, compared to a GAAP loss from operations of $85.7 million in fiscal year 2020.
  • Non-GAAP Loss from Operations: Non-GAAP loss from operations was $11.1 million, compared to a non-GAAP loss from operations of $40.3 million in fiscal year 2020.
  • GAAP Net Loss: GAAP net loss was $73.2 million, compared to a GAAP net loss of $83.4 million in fiscal year 2020. GAAP net loss per share was $0.62 based on 117.6 million weighted average shares outstanding, compared to a net loss per share of $0.75 based on 111.1 million weighted average shares outstanding in fiscal year 2020.
  • Non-GAAP Net Loss: Non-GAAP net loss was $10.4 million, compared to a non-GAAP net loss of $38.0 million in fiscal year 2020. Non-GAAP net loss per share was $0.09 based on 117.6 million weighted average shares outstanding, compared to a non-GAAP net loss per share of $0.34 based on 111.1 million weighted average shares outstanding in fiscal year 2020.
  • Operating Cash Flow: Net cash provided by operating activities was $11.3 million, compared to net cash used in operating activities of $3.6 million in fiscal year 2020.
  • Free Cash Flow: Free cash flow was negative $0.9 million compared to negative $25.0 million in fiscal year 2020.

A description of non-GAAP financial measures is contained in the section titled "Explanation of Non-GAAP Financial Measures" below and a reconciliation of GAAP and non-GAAP financial measures is contained in the tables below.

Fourth Quarter Key Metrics and Business Highlights:

  • Customers with ACV equal to or greater than $100,000 was 676, which represents 8% year-over-year growth.
  • Dollar-based retention rate was 100%.
  • Customer usage of Zuora solutions grew, with $17.0 billion in transaction volume through Zuora’s billing platform during our fourth quarter, an increase of 30% year-over-year.
  • Notable recent go-lives included Acer, Bridgestone, Cambium Networks, Gitlab, Grundfos, Radio Canada and Riverbed.
  • Highlighted customers from multiple industries and geographies in marketing and announcements including Siemens, Schibsted, and NVIDIA.
  • Announced a strategic partnership agreement with Stripe to accelerate the growth of the Subscription Economy.
  • Appointed Sri Srinivasan as Chief Product and Engineering Officer, formerly the Senior Vice President and General Manager of the Cisco Collaboration Group. 

Financial Outlook:

As of March 11, 2021, we are providing guidance for the first quarter and full year fiscal 2022 based on current market conditions and expectations. We emphasize that the guidance is subject to various important cautionary factors referenced in the section entitled “Forward-Looking Statements” below, including risks and uncertainties associated with the ongoing COVID-19 pandemic.

For the first quarter and full fiscal year 2022, Zuora currently expects the following results:

 

 

First Quarter

 

Fiscal 2022

Subscription revenue

 

$63.0M - $65.0M

 

$272.0M - $276.0M

Total revenue

 

$78.0M - $80.0M

 

$335.0M - $337.0M

Non-GAAP loss from operations

 

$(5.0M) - $(4.5M)

 

$(12.0M) - $(8.0M)

Non-GAAP net loss per share1

 

$(0.04) - $(0.03)

 

$(0.10) - $(0.06)

(1) Non-GAAP net loss per share was computed assuming 121.6 million weighted average shares outstanding for the first quarter of fiscal 2022 and 123.9 million for the full year fiscal 2022.

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.

Zuora has not reconciled its guidance for non-GAAP loss from operations to GAAP loss from operations or non-GAAP net loss per share to GAAP net loss per share because stock-based compensation expense cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation is not available without unreasonable effort.

Webcast and Conference Call Information:

Zuora will host a conference call for investors on March 11, 2021 at 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 for one year. The call can also be accessed live via phone by dialing (866) 393-4306 or, for international callers, (734) 385-2616 with conference ID 2976676. An audio replay will be available shortly after the call and can be accessed by dialing (855) 859-2056 or, for international callers, (404) 537-3406. The passcode for the replay is 2976676. The replay will be available through March 18, 2021.

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 cost of professional services revenue, non-GAAP gross profit, non-GAAP subscription gross margin, non-GAAP total gross margin, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss per share, and 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 these non-GAAP 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, from certain of our non-GAAP financial measures 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, from certain of our non-GAAP financial measures. We exclude these amortization expenses because we do not believe these expenses have a direct correlation to the operation of our business.
  • Internal-use software. We exclude non-cash adjustments for capitalization and the subsequent amortization of internal-use software, including any impairment charges, from certain of our non-GAAP financial measures. We capitalize certain costs incurred for the development of computer software for internal use and then amortize those costs over the estimated useful life. Capitalization and amortization of software development costs can vary significantly depending on the timing of products reaching technological feasibility and being made generally available. Moreover, because of the variety of approaches taken and the subjective assumptions made by other companies in this area, we believe that excluding the effects of capitalized software costs allows investors to make more meaningful comparisons between our operating results and those of other companies.
  • Charitable donations. We exclude expenses associated with the charitable donation of our common stock from certain of our non-GAAP financial measures. We believe that excluding these non-cash expenses allows investors to make more meaningful comparisons between our operating results and those of other companies.
  • Certain litigation. We exclude non-recurring charges and benefits, including litigation expenses and settlements, related to litigation matters that are outside of the ordinary course of our business or that are not representative of those that we historically have incurred. 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 and results of such litigation and related settlements. We began excluding litigation that is outside of the ordinary course of our business from our non-GAAP financial measures in the second quarter of fiscal 2021 as these expenses significantly increased, specifically expenses relating to our ongoing securities class actions and derivative litigation.
  • New headquarters costs. We exclude non-recurring costs associated with our new corporate headquarters. In January 2020, we incurred costs associated with water damage, net of insurance recovery, at our new headquarters in Redwood City, California, as well as costs to relocate our operations from other offices to the new headquarters. We expect that the costs related to the water damage and associated insurance recoveries will be fully recognized by the end of our next quarter ending April 30, 2021. We believe that excluding these non-recurring costs allows investors to make more meaningful comparisons between our operating results and those of other companies due to the infrequent nature of these costs.

Additionally, Zuora’s management believes that the free cash flow non-GAAP measure is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures, net of insurance recoveries, as these net expenditures are considered to be a necessary component of ongoing operations. Insurance recoveries include amounts paid to us for property and equipment that were damaged in January 2020 at our corporate headquarters.

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.

Operating 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.

Dollar-based Retention Rate. We calculate our dollar-based retention rate 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.

Forward-Looking Statements:

This press release contains “forward-looking statements” that involve a number of risks and uncertainties, including but not limited to, statements regarding our GAAP and non-GAAP guidance for the first fiscal quarter and full fiscal 2022 and financial outlook and market positioning. Words such as “believes,” “may,” “will,” “estimates,” “potential,” “continues,” “anticipates,” “intends,” “expects,” “could,” “would,” “projects,” “plans,” “targets,” and variations of such words and similar expressions are intended to identify forward-looking statements. 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-Q filed with the Securities and Exchange Commission on December 8, 2020 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: the impact to the economy, our customers and our business due to the ongoing COVID-19 pandemic; we have a history of net losses and may not achieve or sustain profitability; the shift by companies to subscription business models may develop slower than we expect; we may not able to sustain or manage any future growth effectively; our products may fail to gain market acceptance or our product development efforts may be unsuccessful; our sales and product initiatives may not be successful or the expected benefits of such initiatives may not be achieved in a timely manner; our security measures may be breached or our products may be perceived as not being secure; our products may fail to gain, or lose, market acceptance; we may be unable to attract new customers and expand sales to existing customers; customers may fail to successfully deploy our solution after entering into a subscription agreement with us; we may experience interruptions or performance problems, including a service outage, associated with our technology; we face intense competition in our markets and may not be able to compete effectively; we may be unable to adequately protect our intellectual property; current and future litigation including our current shareholder litigation could have a material adverse impact on our financial condition; weakened global economic conditions may adversely affect our industry; the risk of loss of key employees; challenges related to growing our relationships with strategic partners such as systems integrators and their effectiveness in selling our products; changes in foreign exchange rates; general political or destabilizing events, including war, conflict or acts of terrorism; other business effects, including those related to industry, market, economic, political, regulatory and global health conditions, and other risks and uncertainties. Past performance is not necessarily indicative of future results. 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. Additionally, these forward-looking statements, particularly our guidance, involve risk, uncertainties and assumptions, including those related to the impact of COVID-19 on our business and global economic conditions. Uncertainties that we may face include, but are not limited to, our ability to achieve our long-term plans and key initiatives, requests for extended billing and payment terms from customers affected by COVID-19, the timeframes for and severity of the impact of COVID-19 on our customers’ purchasing and renewal decisions, and the length of our sales cycles, particularly for customers in certain industries highly affected by the COVID-19 pandemic.

About Zuora, Inc.

Zuora provides the leading cloud-based subscription management platform that functions as a system of record for subscription businesses across all industries. Powering the Subscription Economy®, the Zuora® platform was architected specifically for dynamic, recurring subscription business models, and acts as an intelligent subscription management hub that automates and orchestrates the entire subscription order-to-revenue process seamlessly across billing and revenue recognition. Zuora serves more than 1,000 companies around the world, including Box, Ford, Penske Media Corporation, Schneider Electric, Siemens, Xplornet and Zoom. Headquartered in Silicon Valley, Zuora also operates offices around the world in the U.S., EMEA and APAC. To learn more about the Zuora platform, please visit www.zuora.com.

© 2021 Zuora, Inc. All Rights Reserved. Zuora, Subscribed, Subscription Economy, Powering the Subscription Economy, and Subscription Economy Index 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 Financial

ZUORA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands, except per share data)

 

 

Three Months Ended
January 31,

 

Fiscal Year Ended
January 31,

 

 

2021

 

2020

 

2021

 

2020

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

Revenue:

 

 

 

 

 

 

 

 

Subscription

 

$

65,112

 

 

$

54,559

 

 

$

242,340

 

 

$

206,555

 

Professional services

 

14,175

 

 

15,834

 

 

63,080

 

 

69,502

 

Total revenue

 

79,287

 

 

70,393

 

 

305,420

 

 

276,057

 

Cost of revenue:

 

 

 

 

 

 

 

 

Subscription

 

15,181

 

 

14,447

 

 

58,808

 

 

53,036

 

Professional services

 

16,951

 

 

19,700

 

 

71,962

 

 

81,145

 

Total cost of revenue

 

32,132

 

 

34,147

 

 

130,770

 

 

134,181

 

Gross profit

 

47,155

 

 

36,246

 

 

174,650

 

 

141,876

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

20,918

 

 

20,736

 

 

76,795

 

 

74,398

 

Sales and marketing

 

31,752

 

 

27,446

 

 

116,914

 

 

108,264

 

General and administrative

 

13,131

 

 

12,513

 

 

54,803

 

 

44,879

 

Total operating expenses

 

65,801

 

 

60,695

 

 

248,512

 

 

227,541

 

Loss from operations

 

(18,646)

 

 

(24,449)

 

 

(73,862)

 

 

(85,665)

 

Interest and other income, net

 

599

 

 

418

 

 

2,561

 

 

2,712

 

Loss before income taxes

 

(18,047)

 

 

(24,031)

 

 

(71,301)

 

 

(82,953)

 

Income tax provision (benefit)

 

744

 

 

(279)

 

 

1,873

 

 

441

 

Net loss

 

(18,791)

 

 

$

(23,752)

 

 

(73,174)

 

 

(83,394)

 

Comprehensive loss:

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

767

 

 

37

 

 

696

 

 

(379)

 

Unrealized (loss) gain on available-for-sale securities, net of tax

 

(68)

 

 

(35)

 

 

(88)

 

 

86

 

Comprehensive loss

 

$

(18,092)

 

 

$

(23,750)

 

 

$

(72,566)

 

 

$

(83,687)

 

Net loss per share, basic and diluted

 

$

(0.16)

 

 

$

(0.21)

 

 

$

(0.62)

 

 

$

(0.75)

 

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

 

119,902

 

 

113,160

 

 

117,598

 

 

111,122

 

ZUORA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

January 31,
2021

 

January 31,
2020

 

 

(unaudited)

 

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

94,110

 

 

$

54,275

 

Short-term investments

 

92,484

 

 

117,662

 

Accounts receivable, net of allowance for credit losses of $4,522 and $2,943 as of January 31, 2021 and January 31, 2020, respectively

 

78,860

 

 

68,875

 

Deferred commissions, current portion

 

12,712

 

 

9,585

 

Prepaid expenses and other current assets

 

15,574

 

 

16,387

 

Total current assets

 

293,740

 

 

266,784

 

Property and equipment, net

 

33,369

 

 

33,489

 

Operating lease right-of-use assets

 

47,085

 

 

54,286

 

Purchased intangibles, net

 

3,928

 

 

5,620

 

Deferred commissions, net of current portion

 

21,905

 

 

19,591

 

Goodwill

 

17,632

 

 

17,632

 

Other assets

 

3,848

 

 

4,825

 

Total assets

 

$

421,507

 

 

$

402,227

 

Liabilities and stockholders’ equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

2,249

 

 

$

2,098

 

Accrued expenses and other current liabilities

 

14,550

 

 

17,731

 

Accrued employee liabilities

 

29,470

 

 

24,193

 

Debt, current portion

 

4,397

 

 

4,432

 

Deferred revenue, current portion

 

127,701

 

 

111,411

 

Operating lease liabilities, current portion

 

9,630

 

 

5,755

 

Total current liabilities

 

187,997

 

 

165,620

 

Debt, net of current portion

 

1,666

 

 

6,094

 

Deferred revenue, net of current portion

 

1,529

 

 

1,007

 

Operating lease liabilities, net of current portion

 

53,590

 

 

62,307

 

Deferred tax liabilities

 

1,929

 

 

1,569

 

Other long-term liabilities

 

2,883

 

 

971

 

Total liabilities

 

249,594

 

 

237,568

 

Stockholders’ equity:

 

 

 

 

Class A common stock

 

11

 

 

10

 

Class B common stock

 

1

 

 

2

 

Additional paid-in capital

 

635,127

 

 

555,307

 

Accumulated other comprehensive income

 

796

 

 

188

 

Accumulated deficit

 

(464,022)

 

 

(390,848)

 

Total stockholders’ equity

 

171,913

 

 

164,659

 

Total liabilities and stockholders’ equity

 

$

421,507

 

 

$

402,227

 

ZUORA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

Fiscal Year Ended January 31,

 

 

2021

 

2020

 

 

(unaudited)

 

 

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(73,174)

 

 

$

(83,394)

 

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

Depreciation, amortization and accretion

 

15,308

 

 

11,866

 

Stock-based compensation

 

59,283

 

 

45,046

 

Provision for credit losses

 

3,686

 

 

3,887

 

Donation of common stock to charitable foundation

 

1,000

 

 

 

Amortization of deferred commissions

 

12,401

 

 

9,515

 

Reduction in carrying amount of right-of-use assets

 

8,265

 

 

8,584

 

Other

 

73

 

 

1,643

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

(13,671)

 

 

(14,504)

 

Prepaid expenses and other assets

 

895

 

 

(4,180)

 

Deferred commissions

 

(17,842)

 

 

(11,411)

 

Accounts payable

 

106

 

 

417

 

Accrued expenses and other liabilities

 

53

 

 

627

 

Accrued employee liabilities

 

7,065

 

 

1,590

 

Deferred revenue

 

16,812

 

 

25,522

 

Operating lease liabilities

 

(8,974)

 

 

1,202

 

Net cash provided by (used in) operating activities

 

11,286

 

 

(3,590)

 

Cash flows from investing activities:

 

 

 

 

Purchases of property and equipment

 

(13,144)

 

 

(21,424)

 

Insurance proceeds for damaged property and equipment

 

988

 

 

 

Purchases of short-term investments

 

(97,363)

 

 

(184,633)

 

Sales of short-term investments

 

2,511

 

 

3,497

 

Maturities of short-term investments

 

119,880

 

 

172,800

 

Net cash provided by (used in) investing activities

 

12,872

 

 

(29,760)

 

Cash flows from financing activities:

 

 

 

 

Proceeds from issuance of common stock upon exercise of stock options, net of repurchases of unvested common stock

 

11,784

 

 

11,960

 

Proceeds of issuance of common stock under employee stock purchase plan

 

7,637

 

 

8,980

 

Principal payments on long-term debt

 

(4,440)

 

 

(2,960)

 

Net cash provided by financing activities

 

14,981

 

 

17,980

 

Effect of exchange rates on cash and cash equivalents

 

696

 

 

(379)

 

Net increase (decrease) in cash and cash equivalents

 

39,835

 

 

(15,749)

 

Cash and cash equivalents, beginning of year

 

54,275

 

 

70,024

 

Cash and cash equivalents, end of year

 

$

94,110

 

 

$

54,275

 

 

ZUORA, INC.

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES

(in thousands, except percentages and per share data)

(unaudited)

 

 

Three Months Ended January 31, 2021

 

 

GAAP

 

Stock-based
Compensation

 

Amortization
of Acquired
Intangibles

 

Internal-
use
Software

 

Certain
Litigation

 

Non-GAAP

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription revenue

 

$

15,181

 

 

$

(1,308)

 

 

$

(423)

 

 

$

(759)

 

 

$

 

 

$

12,691

 

Cost of professional services revenue

 

16,951

 

 

(2,662)

 

 

 

 

 

 

 

 

14,289

 

Gross profit

 

47,155

 

 

3,970

 

 

423

 

 

759

 

 

 

 

52,307

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

20,918

 

 

(5,161)

 

 

 

 

583

 

 

 

 

16,340

 

Sales and marketing

 

31,752

 

 

(4,118)

 

 

 

 

 

 

 

 

27,634

 

General and administrative

 

13,131

 

 

(2,101)

 

 

 

 

158

 

 

(1,050)

 

 

10,138

 

Operating loss

 

(18,646)

 

 

15,350

 

 

423

 

 

18

 

 

1,050

 

 

(1,805)

 

Net loss

 

$

(18,791)

 

 

$

15,350

 

 

$

423

 

 

$

18

 

 

$

1,050

 

 

$

(1,950)

 

Net loss per share, basic and diluted1

 

$

(0.16)

 

 

 

 

 

 

 

 

 

 

$

(0.02)

 

Gross margin

 

59

%

 

 

 

 

 

 

 

 

 

66

%

Subscription gross margin

 

77

%

 

 

 

 

 

 

 

 

 

81

%

 

 

Three Months Ended January 31, 2020

 

 

GAAP

 

Stock-based
Compensation

 

Amortization of
Acquired
Intangibles

 

Internal-
use
Software

 

New
Headquarters
Costs

 

Non-GAAP

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription revenue

 

$

14,447

 

 

$

(785)

 

 

$

(423)

 

 

$

(781)

 

 

$

(75)

 

 

$

12,383

 

Cost of professional services revenue

 

19,700

 

 

(2,108)

 

 

 

 

 

 

(94)

 

 

17,498

 

Gross profit

 

36,246

 

 

2,893

 

 

423

 

 

781

 

 

169

 

 

40,512

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

20,736

 

 

(5,878)

 

 

 

 

1,351

 

 

(150)

 

 

16,059

 

Sales and marketing

 

27,446

 

 

(3,058)

 

 

 

 

 

 

(43)

 

 

24,345

 

General and administrative

 

12,513

 

 

(1,804)

 

 

 

 

 

 

(120)

 

 

10,589

 

Operating loss

 

(24,449)

 

 

13,633

 

 

423

 

 

(570)

 

 

482

 

 

(10,481)

 

Net loss

 

$

(23,752)

 

 

$

13,633

 

 

$

423

 

 

$

(570)

 

 

$

482

 

 

$

(9,784)

 

Net loss per share, basic and diluted1

 

$

(0.21)

 

 

 

 

 

 

 

 

 

 

$

(0.09)

 

Gross margin

 

51

%

 

 

 

 

 

 

 

 

 

58

%

Subscription gross margin

 

74

%

 

 

 

 

 

 

 

 

 

77

%

(1) GAAP and Non-GAAP net loss per share are calculated based upon 119,902 and 113,160 basic and diluted weighted-average shares of common stock for the three months ended January 31, 2021 and 2020, respectively.

 

ZUORA, INC.

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES

(in thousands, except percentages and per share data)

(unaudited)

 

 

Fiscal Year Ended January 31, 2021

 

 

GAAP

 

Stock-based
Compensation

 

Amortization
of Acquired
Intangibles

 

Internal-
use
Software

 

Charitable
Contribution

 

Certain
Litigation

 

Non-GAAP

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription revenue

 

$

58,808

 

 

$

(4,849)

 

 

$

(1,692)

 

 

$

(1,781)

 

 

$

 

 

$

 

 

$

50,486

 

Cost of professional services revenue

 

71,962

 

 

(9,952)

 

 

 

 

 

 

 

 

 

 

62,010

 

Gross profit

 

174,650

 

 

14,801

 

 

1,692

 

 

1,781

 

 

 

 

 

 

192,924

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

76,795

 

 

(19,562)

 

 

 

 

4,051

 

 

 

 

 

 

61,284

 

Sales and marketing

 

116,914

 

 

(15,839)

 

 

 

 

 

 

 

 

 

 

101,075

 

General and administrative

 

54,803

 

 

(9,081)

 

 

 

 

158

 

 

(1,000)

 

 

(3,252)

 

 

41,628

 

Operating loss

 

(73,862)

 

 

59,283

 

 

1,692

 

 

(2,428)

 

 

1,000

 

 

3,252

 

 

(11,063)

 

Net loss

 

$

(73,174)

 

 

$

59,283

 

 

$

1,692

 

 

$

(2,428)

 

 

$

1,000

 

 

$

3,252

 

 

$

(10,375)

 

Net loss per share, basic and diluted1

 

$

(0.62)

 

 

 

 

 

 

 

 

 

 

 

 

$

(0.09)

 

Gross margin

 

57

%

 

 

 

 

 

 

 

 

 

 

 

63

%

Subscription gross margin

 

76

%

 

 

 

 

 

 

 

 

 

 

 

79

%

 

 

Fiscal Year Ended January 31, 2020

 

 

GAAP

 

Stock-based
Compensation

 

Amortization
of Acquired
Intangibles

 

Internal-
use
Software

 

New
Headquarters

Costs

 

Non-GAAP

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of subscription revenue

 

$

53,036

 

 

$

(2,772)

 

 

$

(1,776)

 

 

$

(2,560)

 

 

$

(75)

 

 

$

45,853

 

Cost of professional services revenue

 

81,145

 

 

(7,265)

 

 

 

 

 

 

(94)

 

 

73,786

 

Gross profit

 

141,876

 

 

10,037

 

 

1,776

 

 

2,560

 

 

169

 

 

156,418

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

74,398

 

 

(17,568)

 

 

 

 

4,506

 

 

(150)

 

 

61,186

 

Sales and marketing

 

108,264

 

 

(11,129)

 

 

 

 

 

 

(43)

 

 

97,092

 

General and administrative

 

44,879

 

 

(6,312)

 

 

 

 

 

 

(120)

 

 

38,447

 

Operating loss

 

(85,665)

 

 

45,046

 

 

1,776

 

 

(1,946)

 

 

482

 

 

(40,307)

 

Net loss

 

$

(83,394)

 

 

$

45,046

 

 

$

1,776

 

 

$

(1,946)

 

 

$

482

 

 

$

(38,036)

 

Net loss per share, basic and diluted1

 

$

(0.75)

 

 

 

 

 

 

 

 

 

 

$

(0.34)

 

Gross margin

 

51

%

 

 

 

 

 

 

 

 

 

57

%

Subscription gross margin

 

74

%

 

 

 

 

 

 

 

 

 

78

%

(1) GAAP and Non-GAAP net loss per share are calculated based upon 117,598 and 111,122 basic and diluted weighted-average shares of common stock for the fiscal year ended January 31, 2021 and 2020, respectively.

Free Cash Flow

 

 

Three Months Ended
January 31,

 

Fiscal Year Ended
January 31,

 

 

2021

 

2020

 

2021

 

2020

Net cash provided by (used in) operating activities

 

$

3,135

 

 

$

4,009

 

 

$

11,286

 

 

$

(3,590)

 

Less:

 

 

 

 

 

 

 

 

Purchases of property and equipment, net of insurance recoveries

 

(1,070)

 

 

(8,546)

 

 

(12,156)

 

 

(21,424)

 

Free cash flow

 

$

2,065

 

 

$

(4,537)

 

 

$

(870)

 

 

$

(25,014)

 

 

Investor Relations Contact:
Luana Wolk and Carolyn Bass
investorrelations@zuora.com
415-445-3232

Media Relations Contact:
Jayne Gonzalez
press@zuora.com
408-348-1087

Source: Zuora, Inc.

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