ZUO ER Update

Hey Zuo Fools:

This is just a quick update. I’ll come back later with a “Ticker Take” on the Quarter after I have time to listen to/read the conference call (at 5pm ET) and digest the press release and filing information. In the meantime here are a few nugget:

Zuora (NYSE:ZUO) shares have dropped 11.5% in the After Market. The company is reporting Q4 results that beat on revenue and met on EPS. Subscription revenue grew 35% Y/Y to $46.7M.

The provided guidance is provided in ASC 605 and 606.

ASC 605: Q1 total revenue of $65M to $66M with EPS of -$0.13 to -$0.12. FY20 outlook has total revenue from $293M to $297.5M with EPS from -$0.44 to -$0.40.

ASC 606: Q1 total revenue of $63.5M to $64.5M with EPS of -$0.14 to -$0.13. FY20 has $289M to $293.5M in revenue and -$0.44 to -$0.40 EPS.

Consensus: Q1 revenue, $65.36M; Q1 EPS, -$0.12; FY20 revenue, $295.5M; FY20 EPS, -$0.45.

Source of italicized information above: Seekingalpha.com

I’ll be back with more details later.

Best, Swift…
Long ZUO


Since I’d introduced this company to the Board in January; letting everyone know that following the weak Q4 results, I’ve sold my position a few minutes ago at a small profit.

Zuora is by far the smallest company in my portfolio and its growth rate is already diminishing!

In Q4, its subscription revenue, total revenue growth rates and net retention rate have all slowed sequentially and this isn’t something I wanted to see from the smallest business in my portfolio.

In Q4, Zuora’s total revenue grew just 29% yoy (versus 33%yoy growth in Q3) and its total revenue grew just 35% (versus 43%yoy growth in Q3). In Q4, its NRR has also slipped to 112% from 115% in Q3.

What did it for me is that after the weak ER, the company posted another press release citing that the subscription economy grew more than 300% in the past 7 years. I mean c’mon - seriously!???

I hate to see this type of promotional nonsense to mask weak performance; so am out.


*Typo - In Q4, its SUBSCRIPTION revenue grew just 35% yoy (versus 43% yoy growth in Q3).