Zuora (NYSE:ZUO), the subscription management platform, has released its Q1 FY2024 results, posting revenue of $103.1 million, a 10.6% YoY increase, and meeting analyst estimates. Zuora also reported a GAAP loss of $19.3 million, down from $23.2 million the previous year.
The company also stated that its Q1 FY2024 revenue guidance was $108.8 million, which represents a 1.91% increase above the analyst consensus. Zuora’s Founder and CEO, Tien Tzuo, commented on the results, stating “We started the year with solid execution in the first quarter, coming in ahead of guidance on both the top and bottom-line, while progressing toward profitability and balanced growth.”
Highlights of Zuora’s Q1 FY2024 results:
- Revenue: $103.1 million vs. analyst estimates of $102.1 million (0.98% ahead of estimates)
- EPS (non-GAAP): $0.05 vs. analyst estimates of $0 (beat by $0.05)
- Revenue guidance for Q2 2024: $108.8 million at the midpoint, above analyst estimates of $106.7 million
- Reconfirmed full-year revenue guidance at $435.5 million at the midpoint
- Free cash flow: $13 million, up from negative free cash flow of $20.1 million in the previous quarter
- Net Revenue Retention Rate: 110%, in line with the previous quarter
- Customers: 782 customers paying more than $100,000 annually
- Gross Margin (GAAP): 63.8%, up from 61.1% in the same quarter last year
Zuora, founded in 2007, provides companies with software as a service platforms to manage subscription billing and payments. Consumers are looking to make payments conveniently and safely, while businesses look for easy-to-integrate solutions.
Zuora’s revenue increased by 10.6% YoY in Q1 FY2024 to $103.1 million, which is less than the $1.97 million increase seen in Q4 2023. While the growth has slowed, the company’s Q2 2024 revenue guidance is for a 10.1% YoY increase to $108.8 million. This shows a slowdown from the 14.2% YoY increase in revenue in Q2 2023. It is worth noting that the company’s 782 enterprise customers paying more than $100,000 annually is also an increase of 9 on the previous quarter.
Key Takeaways from Zuora’s Q1 Results
Zuora has cash reserves of more than $396.9 million, which gives it the capacity to prioritize growth over profitability. The company’s full-year guidance for revenue, adjusted operating profit, and adjusted EPS is above the current consensus. These metrics, along with the company’s performance in Q1, make it a good investment opportunity.
Investors looking for opportunities in the market should watch for generational shifts in technology, as most companies are slowly becoming technology companies themselves. The rising demand for cloud-native cybersecurity makes companies such as Crowdstrike worth considering as an investment opportunity.
The author has no position in any of the stocks mentioned.