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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________

FORM 8-K
_________________________________________

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 29, 2023
_________________________________________

Zuora, Inc.
(Exact name of registrant as specified in its charter)
_________________________________________

Delaware001-3845120-5530976
(State or Other Jurisdiction of Incorporation)(Commission File Number)(IRS Employer Identification No.)

101 Redwood Shores Parkway, Redwood City, California
94065
(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (888) 976-9056

Not Applicable
(Former name or former address, if changed since last report.)
_________________________________________


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.0001 per shareZUONew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o




Item 2.02. Results of Operations and Financial Condition.

On November 29, 2023, Zuora, Inc. (“Zuora” or “we”) issued a press release announcing the financial results of its fiscal quarter ended October 31, 2023. The press release is furnished as Exhibit 99.1 and is incorporated herein by reference.

The information in this current report, including Exhibit 99.1, are furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in Exhibit 99.1 shall not be deemed incorporated by reference in any registration statement or other document filed with the Securities and Exchange Commission by Zuora, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On November 24, 2023, Magdalena Yesil informed Zuora of her intention to resign from Zuora’s Board of Directors (“Board”) and her position as chair of the Board’s Nominating and Governance Committee, effective December 1, 2023. Ms. Yesil served on the Board for over six years and her resignation was not a result of any disagreement with Zuora on any matter relating to Zuora’s operations, policies or practices.

On November 28, 2023, in connection with Ms. Yesil’s resignation, the Board approved a reduction in the size of the Board to nine members, the re-assignment of Laura Clayton McDonnell as a Class I director (from Class III) in order to balance our three Board classes so that each class has three directors (ensuring no one class has more than one director more than any other class in accordance with Zuora’s organizational documents), and the appointment of Omar Abbosh as chair of the Nominating and Governance Committee, each effective on December 1, 2023.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is furnished as part of this report:
 
Exhibit NumberDescription
99.1
104
Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 ZUORA, INC.
(Registrant)
Dated: November 29, 2023
By:
 /s/ Todd McElhatton
Todd McElhatton
Chief Financial Officer


Exhibit 99.1

Zuora Reports Third Quarter Fiscal 2024 Results
GAAP operating margin increased 26 percentage points year-over-year
Non-GAAP operating margin increased 14 percentage points year-over-year
Subscription revenue grew 13% year-over-year
Total revenue grew 9% year-over-year
Redwood City, Calif. – November 29, 2023 – Zuora, Inc. (NYSE: ZUO), a leading monetization suite for modern businesses, today announced financial results for its fiscal third quarter ended October 31, 2023.
“We continued to execute on our strategy in the third quarter, exceeding guidance on subscription revenue, total revenue and operating income,” said Tien Tzuo, Founder and CEO of Zuora. “Three quarters in, it’s clear we’re building a durable recurring business capable of delivering strong margins and free cash flow, made possible by a growing customer base that’s committed to our differentiated technology.”

Third Quarter Fiscal 2024 Financial Results:
•Revenue: Subscription revenue was $98.0 million, an increase of 13% year-over-year and 14% on a constant currency basis. Total revenue was $109.8 million, an increase of 9% year-over-year and 9% on a constant currency basis.
•GAAP Loss from Operations: GAAP loss from operations was $8.8 million, compared to a loss from operations of $33.9 million in the third quarter of fiscal 2023.
•Non-GAAP Income from Operations: Non-GAAP income from operations was $16.0 million, compared to a non-GAAP income from operations of $0.6 million in the third quarter of fiscal 2023.
•GAAP Net Loss: GAAP net loss was $5.5 million, or 5% of revenue, compared to a net loss of $37.0 million, or 37% of revenue, in the third quarter of fiscal 2023. GAAP net loss per share was $0.04 based on 141.5 million weighted-average shares outstanding, compared to a net loss per share of $0.28 based on 132.6 million weighted-average shares outstanding in the third quarter of fiscal 2023.
•Non-GAAP Net Income (Loss): Non-GAAP net income was $12.3 million, compared to a non-GAAP net loss of $2.9 million in the third quarter of fiscal 2023. Non-GAAP net income per share was $0.09 based on 141.5 million weighted-average shares outstanding, compared to a non-GAAP net loss per share of $0.02 based on 132.6 million weighted-average shares outstanding in the third quarter of fiscal 2023.
•Cash Flow: Net cash used in operating activities was $55.7 million, compared to net cash used in operating activities of $4.9 million in the third quarter of fiscal 2023. Net cash used in operating activities for the third quarter fiscal 2024 included a payment of $68.3 million to settle shareholder litigation.
•Adjusted Free Cash Flow: Adjusted free cash flow was $12.7 million compared to negative $7.2 million in the third quarter of fiscal 2023.
•Cash and Investments: Cash and cash equivalents and short-term investments were $493.7 million as of October 31, 2023.
Descriptions of our non-GAAP financial measures are contained in the section titled "Explanation of Non-GAAP Financial Measures" below and reconciliations of GAAP and non-GAAP financial measures are contained in the tables below.

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Key Metrics and Business Highlights:
•Customers with annual contract value (ACV) equal to or greater than $250,000 were 453, up from 420 as of October 31, 2022. Seven of the deals that closed in the quarter ended October 31, 2023 had ACV equal to or greater than $500,000, two of which had ACV greater than $1.0 million.
•Dollar-based retention rate (DBRR) was 108%, compared to 109% as of October 31, 2022.
•Annual Recurring Revenue (ARR) was $396.0 million compared to $350.7 million as of October 31, 2022, representing ARR growth of 13%.
•Hosted an international series of Subscribed Connect events in London, Paris, Munich, Stockholm and Tokyo, announcing multiple product enhancements including:
◦A new native Mediation Engine within Zuora for Consumption, which helps companies create flexible meters and consolidate usage data, unlocking new customer insights to rapidly experiment with pricing and better align with customer value.
◦Subscriber IQ, a new Zephr capability, which helps product and growth teams glean valuable subscriber insights through a connected view of subscribers combined with industry benchmarks.
◦Zuora Integration Hub, one place for drag-and-drop integration that makes it even faster for technical teams to configure and maintain Zuora’s 60+ pre-built connectors to CRM, CPQ, ERP, payment gateways and more.
◦Zuora Extension Studio, which empowers admins to extend Zuora for changing business requirements, configure unique use cases and change monetization processes quickly.
•Announced a partnership with Sovos to help global businesses meet e-invoicing mandates.
•Zuora expanded its services with Google Fiber, Alphabet’s high-speed broadband internet service that spans 15 states and counting. Now, Zuora will power GFiber’s full order-to-revenue process as they continue to grow.
•New customers and go-lives included LinkedIn, FreshBooks and Dark Matter Technologies.
Financial Outlook:
As of November 29, 2023, we are providing guidance for the fourth quarter and full fiscal year 2024 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.
For the fourth quarter and full fiscal year 2024, Zuora currently expects the following results:
 
Fourth Quarter
Fiscal 2024
Subscription revenue
$99.3M - $100.3M
$382.5M - $383.5M
Professional services revenue
$10.5M - $11.5M
$48.3M - $49.3M
Total revenue
$109.8M - $111.8M
$430.8M - $432.8M
Non-GAAP income from operations1
$12.0M - $13.0M
$43.6M - $44.6M
Non-GAAP net income per share1,2
$0.04 - $0.05
$0.25 - $0.26
ARR growth3
~12%
Dollar-based Retention Rate3
107%-108%
Adjusted Free Cash Flow1
$37M+


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(1) For information on how we derive our non-GAAP financial measures, see the section titled "Explanation of Non-GAAP Financial Measures" below. Zuora has not reconciled its guidance for non-GAAP income from operations to GAAP loss from operations or non-GAAP net income per share to GAAP net loss per share because stock-based compensation expense cannot be reasonably calculated or predicted at this time. Additionally, adjusted free cash flow has not been reconciled to operating cash flows as it cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation of these non-GAAP measures is not available without unreasonable effort.
(2) Non-GAAP net income per share was computed assuming 144.2 million and 140.1 million weighted-average shares outstanding for the fourth quarter and full fiscal year 2024, respectively.
(3) Refer to the "Explanation of Key Operational and Financial Metrics" section below for how these metrics are calculated.
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.
Explanation of Key Operational and Financial Metrics:
Customers with annual contract value (ACV) equal to or greater than $250,000. 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. We define the number of customers at the end of any particular period as the number of parties or organizations that have entered into a distinct subscription contract with us and for which the term has not ended. Each party with whom we have entered into a distinct subscription contract is considered a unique customer, and in some cases, there may be more than one customer within a single organization.
Dollar-based Retention Rate (DBRR). We calculate DBRR 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.

Annual Recurring Revenue (ARR). ARR represents the annualized recurring value at the time of initial booking or contract modification for all active subscription contracts at the end of a reporting period. ARR excludes the value of non-recurring revenue such as professional services revenue as well as contracts with new customers with a term of less than one year. ARR should be viewed independently of revenue and deferred revenue, and is not intended to be a substitute for, or combined with, any of these items. ARR growth is calculated by dividing the ARR as of a period end by the ARR for the corresponding period end of the prior fiscal year.

Webcast and Conference Call Information:
Zuora will host a conference call for investors on November 29, 2023 at 2:00 p.m. Pacific Time / 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 through November 29, 2024. The call can also be accessed live via phone by the toll-free dial-in number: 1-888-440-5655 or toll dial-in number: 1-646-960-0338 with conference ID 8022374. An audio replay will be available shortly after the call and can be accessed by dialing 1-800-770-2030 or 1-647-362-9199 with conference ID 8022374 available from November 29, 2023 at 4:00 p.m. PT to December 6, 2023 at 11:59 p.m. PT.

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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 subscription gross margin; non-GAAP cost of professional services revenue; non-GAAP professional services gross margin; non-GAAP gross profit; non-GAAP gross margin; non-GAAP income from operations; non-GAAP operating margin; non-GAAP net income (loss); non-GAAP net income (loss) per share; adjusted free cash flow; and subscription revenue and total revenue that exclude the impact of foreign currency exchange rate fluctuations (constant currency basis). 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 non-GAAP financial 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, 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, because we do not believe it has a direct correlation to the operation of our business.
•Charitable contributions. We exclude expenses associated with charitable donations of our common stock. We believe that excluding these non-cash expenses allows investors to make more meaningful comparisons between our operating results and those of other companies.
•Shareholder litigation. We exclude non-recurring charges and benefits, net of insurance recoveries, including litigation expenses and settlements, related to shareholder litigation matters that are outside of the ordinary course of our business. 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.
•Asset impairment. We exclude non-cash charges for impairment of assets, including impairments related to internal-use software, office leases, and acquired intangible assets. Impairment charges can vary significantly in terms of amount and timing and we do not consider these charges indicative of our current or past operating performance. Moreover, we believe that excluding the effects of these charges allows investors to make more meaningful comparisons between our operating results and those of other companies.
•Change in fair value of warrant liability and debt conversion liability. We exclude the change in fair value of warrant liabilities and debt conversion liabilities, which are non-cash gains or losses, as they can fluctuate significantly with changes in Zuora's stock price and market volatility, and do not reflect the underlying cash flows or operational results of the business.

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•Acquisition-related transactions. We exclude acquisition-related transactions (including integration-related charges) that are not related to our ongoing operations, including expenses we incurred and gains or losses recognized on contingent consideration related to our acquisition of Zephr. We do not consider these transactions reflective of our core business or ongoing operating performance.
•Workforce reduction. We exclude charges related to the workforce reduction plan we approved in November 2022, including severance, health care and related expenses. We believe these charges are not indicative of our continuing operations.
Additionally, we disclose "adjusted free cash flow", which is a non-GAAP measure that excludes acquisition-related costs (including integration-related charges) and expenses related to non-ordinary course litigation (including settlement charges) from GAAP operating cash flows, and includes capital expenditures. We believe this measure is meaningful to investors because management reviews cash flows generated from operations excluding such expenditures that are not related to our ongoing operations.
Zuora also provides subscription revenue and total revenue, including year-over-year growth rates, adjusted to remove the impact of foreign currency rate fluctuations, which we refer to as constant currency. We believe providing revenue on a constant currency basis helps our investors to better understand our underlying performance. We calculate constant currency in a given period by applying the average currency exchange rates in the comparable period of the prior year to the local currency revenue in the current period.
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.

Forward-Looking Statements:
Zuora’s Financial Outlook and other statements in this release that refer to future plans and expectations are forward-looking statements that involve a number of risks and uncertainties. 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 September 6, 2023 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: we may be unable to attract new customers and expand sales to existing customers; adverse impacts on our business and financial condition due to macroeconomic or market conditions, such as inflation, rising interest rates, and banking system instability; we may not be able to manage our future growth and profitability plans effectively; monetization platform software and related solutions, as well as consumer adoption of products and services that are provided through such solutions, may develop slower than we expect; challenges related to growing our relationships with strategic partners such as systems integrators and their effectiveness in selling our products; the risk of loss of key employees; the risk of currency exchange rate fluctuations; we face intense competition in our markets and may not be able to compete effectively; we have a history of net losses and may not achieve or sustain profitability; our products may fail to gain, or lose, market acceptance; our product development efforts may be unsuccessful; we face risks with our debt obligations; we may not be able to develop and release new products and services, or successful enhancements, new features and modifications to our existing products and services; customers may fail to successfully deploy our solution after entering into a subscription agreement with us; 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; we may be unable to adequately protect our intellectual property; we may experience interruptions or performance

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problems, including a service outage, associated with our technology; litigation and related costs; geopolitical conflicts or destabilizing events, such as the ongoing conflict in Ukraine and Israel; other business effects, including those related to industry, market, economic, political, regulatory and global health conditions and other risks and uncertainties. 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.
About Zuora, Inc.
Zuora provides a leading monetization suite for modern businesses across all industries, enabling companies to unlock and grow customer-centric business models. Zuora serves as an intelligent hub that monetizes and orchestrates the complete quote to cash and revenue recognition process at scale. Through its industry leading technology and expertise, Zuora helps more than 1,000 companies around the world, including BMC Software, Box, Caterpillar, General Motors, Penske Media Corporation, Schneider Electric, Siemens and Zoom nurture and monetize direct, digital customer relationships. Headquartered in Silicon Valley, Zuora operates offices around the world in the Americas, EMEA and APAC. To learn more about the Zuora monetization suite, please visit www.zuora.com.
Investor Relations Contact:
Luana Wolk
investorrelations@zuora.com
650-419-1377
Media Relations Contact:
Margaret Pack
press@zuora.com
619-609-3919
© 2023 Zuora, Inc. All Rights Reserved. Zuora, Subscribed, Subscription Economy, Powering the Subscription Economy, Subscription Economy Index, Zephr, and Subscription Experience Platform 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

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ZUORA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands, except per share data)
(unaudited)
 Three Months Ended
October 31,		Nine Months Ended
October 31,
 2023202220232022
Revenue:
Subscription$98,048 $86,567 $283,232 $248,878 
Professional services11,801 14,505 37,760 44,168 
Total revenue109,849 101,072 320,992 293,046 
Cost of revenue:
Subscription1
20,378 21,727 62,304 60,024 
Professional services1
14,650 18,553 47,851 55,140 
Total cost of revenue35,028 40,280 110,155 115,164 
Gross profit74,821 60,792 210,837 177,882 
Operating expenses:
Research and development1
27,504 28,413 79,428 77,639 
Sales and marketing1
40,245 46,973 124,488 132,576 
General and administrative1
15,893 19,327 54,160 55,433 
Total operating expenses83,642 94,713 258,076 265,648 
Loss from operations(8,821)(33,921)(47,239)(87,766)
Change in fair value of warrant liability and debt conversion liability6,997 452 2,241 9,348 
Interest expense(5,610)(4,444)(14,604)(10,647)
Interest and other income (expense), net2,272 1,187 13,639 98 
Loss before income taxes(5,162)(36,726)(45,963)(88,967)
Income tax provision340 308 1,396 1,145 
Net loss(5,502)(37,034)(47,359)(90,112)
Comprehensive loss:
Foreign currency translation adjustment(696)(973)(1,383)(1,648)
Unrealized (loss) gain on available-for-sale securities(18)(337)494 (1,013)
Comprehensive loss$(6,216)$(38,344)$(48,248)$(92,773)
Net loss per share, basic and diluted$(0.04)$(0.28)$(0.34)$(0.69)
Weighted-average shares outstanding used in calculating net loss per share, basic and diluted141,488 132,579 138,789 130,461 
_____________________
(1) Stock-based compensation expense was recorded in the following cost and expense categories:
Three Months Ended
October 31,		Nine Months Ended
October 31,
 2023202220232022
Cost of subscription revenue$2,350 $2,437 $6,889 $6,517 
Cost of professional services revenue2,747 3,479 8,997 10,186 
Research and development7,165 7,536 20,661 20,967 
Sales and marketing8,191 10,188 24,857 27,603 
General and administrative5,648 5,367 16,569 14,772 
Total stock-based compensation expense$26,101 $29,007 $77,973 $80,045 

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ZUORA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
 October 31, 2023January 31, 2023
Assets
Current assets:
Cash and cash equivalents$414,832 $203,239 
Short-term investments78,905 183,006 
Accounts receivable, net78,297 91,740 
Deferred commissions, current portion15,298 16,282 
Prepaid expenses and other current assets23,554 24,285 
Total current assets610,886 518,552 
Property and equipment, net25,570 27,159 
Operating lease right-of-use assets25,296 22,768 
Purchased intangibles, net10,689 13,201 
Deferred commissions, net of current portion26,658 28,250 
Goodwill55,000 53,991 
Other assets4,035 4,677 
Total assets$758,134 $668,598 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$465 $1,073 
Accrued expenses and other current liabilities27,810 103,678 
Accrued employee liabilities30,992 30,483 
Deferred revenue, current portion158,407 167,145 
Operating lease liabilities, current portion7,396 9,240 
Total current liabilities225,070 311,619 
Long-term debt356,645 210,403 
Deferred revenue, net of current portion1,719 442 
Operating lease liabilities, net of current portion38,060 37,924 
Deferred tax liabilities3,723 3,717 
Other long-term liabilities7,340 7,333 
Total liabilities632,557 571,438 
Stockholders’ equity:
Class A common stock13 13 
Class B common stock1 1 
Additional paid-in capital936,147 859,482 
Accumulated other comprehensive loss(1,808)(919)
Accumulated deficit(808,776)(761,417)
Total stockholders’ equity125,577 97,160 
Total liabilities and stockholders’ equity$758,134 $668,598 



8



ZUORA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Nine Months Ended
October 31,
 20232022
Cash flows from operating activities:
Net loss$(47,359)$(90,112)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization and accretion13,684 13,725 
Stock-based compensation77,973 80,045 
Provision for credit losses457 1,403 
Donation of common stock to charitable foundation— 1,000 
Amortization of deferred commissions14,415 14,250 
Reduction in carrying amount of right-of-use assets4,876 5,859 
Change in fair value of warrant liability and debt conversion liability(2,241)(9,348)
Change in fair value of contingent consideration— (1,800)
Other2,630 575 
Changes in operating assets and liabilities:
Accounts receivable12,476 5,666 
Prepaid expenses and other assets878 (2,454)
Deferred commissions(12,013)(15,418)
Accounts payable(634)3,415 
Accrued expenses and other liabilities(82,904)2,819 
Accrued employee liabilities509 282 
Deferred revenue(7,461)(2,607)
Operating lease liabilities(10,962)(9,979)
Net cash used in operating activities(35,676)(2,679)
Cash flows from investing activities:
Purchases of property and equipment(6,913)(8,471)
Purchases of short-term investments(66,665)(205,464)
Maturities of short-term investments175,128 89,013 
Cash paid for acquisition(4,524)(41,000)
Net cash provided by (used in) investing activities97,026 (165,922)
Cash flows from financing activities:
Proceeds from issuance of convertible senior notes, net of issuance costs145,861 233,901 
Proceeds from issuance of common stock upon exercise of stock options1,000 2,097 
Proceeds from issuance of common stock under employee stock purchase plan4,765 4,485 
Principal payments on debt— (1,480)
Net cash provided by financing activities151,626 239,003 
Effect of exchange rates on cash and cash equivalents(1,383)(1,648)
Net increase in cash and cash equivalents211,593 68,754 
Cash and cash equivalents, beginning of period203,239 113,507 
Cash and cash equivalents, end of period$414,832 $182,261 

9



ZUORA, INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except percentages)
(unaudited)

Subscription Gross Margin
Three Months Ended
October 31,		Nine Months Ended
October 31,
2023202220232022
Reconciliation of cost of subscription revenue:
GAAP cost of subscription revenue$20,378 $21,727 $62,304 $60,024 
Less:
Stock-based compensation(2,350)(2,437)(6,889)(6,517)
Amortization of acquired intangibles(607)(586)(2,083)(1,512)
Asset impairment
(439)— (439)— 
Workforce reduction— (147)(38)(147)
Non-GAAP cost of subscription revenue$16,982 $18,557 $52,855 $51,848 
GAAP subscription gross margin79 %75 %78 %76 %
Non-GAAP subscription gross margin83 %79 %81 %79 %

Professional Services Gross Margin
Three Months Ended
October 31,		Nine Months Ended
October 31,
2023202220232022
Reconciliation of cost of professional services revenue:
GAAP cost of professional services revenue$14,650 $18,553 $47,851 $55,140 
Less:
Stock-based compensation(2,747)(3,479)(8,997)(10,186)
Workforce reduction— (399)(46)(399)
Non-GAAP cost of professional services revenue$11,903 $14,675 $38,808 $44,555 
GAAP professional services gross margin(24)%(28)%(27)%(25)%
Non-GAAP professional services gross margin(1)%(1)%(3)%(1)%


10



ZUORA, INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
(in thousands, except percentages)
(unaudited)

Total Gross Margin
Three Months Ended
October 31,		Nine Months Ended
October 31,
2023202220232022
Reconciliation of gross profit:
GAAP gross profit$74,821 $60,792 $210,837 $177,882 
Add:
Stock-based compensation5,097 5,916 15,886 16,703 
Amortization of acquired intangibles607 586 2,083 1,512 
Asset impairment
439 — 439 — 
Workforce reduction— 546 84 546 
Non-GAAP gross profit$80,964 $67,840 $229,329 $196,643 
GAAP gross margin68 %60 %66 %61 %
Non-GAAP gross margin74 %67 %71 %67 %

Operating (Loss) Income and Operating Margin
Three Months Ended
October 31,		Nine Months Ended
October 31,
2023202220232022
Reconciliation of (loss) income from operations:
GAAP loss from operations$(8,821)$(33,921)$(47,239)$(87,766)
Add:
Stock-based compensation26,101 29,007 77,973 80,045 
Amortization of acquired intangibles607 586 2,083 1,512 
Asset impairment1,592 — 1,592 — 
Charitable contribution
— — — 1,000 
Shareholder litigation(3,508)16 (3,265)246 
Acquisition-related transactions19 1,268 211 1,612 
Workforce reduction— 3,660 265 3,660 
Non-GAAP income from operations$15,990 $616 $31,620 $309 
GAAP operating margin(8)%(34)%(15)%(30)%
Non-GAAP operating margin15 %1 %10 %— %



11



ZUORA, INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
(in thousands, except per share data)
(unaudited)

Net (Loss) Income and Net (Loss) Income Per Share
Three Months Ended
October 31,		Nine Months Ended
October 31,
2023202220232022
Reconciliation of net (loss) income:
GAAP net loss$(5,502)$(37,034)$(47,359)$(90,112)
Add:
Stock-based compensation26,101 29,007 77,973 80,045 
Amortization of acquired intangibles607 586 2,083 1,512 
Asset impairment1,592 — 1,592 — 
Charitable contribution
— — — 1,000 
Shareholder litigation(3,508)16 (3,265)246 
Change in fair value of warrant liability and debt conversion liability(6,997)(452)(2,241)(9,348)
Acquisition-related transactions19 1,268 211 1,612 
Workforce reduction— 3,660 265 3,660 
Non-GAAP net income (loss)$12,312 $(2,949)$29,259 $(11,385)
GAAP net loss per share, basic and diluted1
$(0.04)$(0.28)$(0.34)$(0.69)
Non-GAAP net income (loss) per share, basic and diluted1
$0.09 $(0.02)$0.21 $(0.09)
_________________________________

(1) For the three months ended October 31, 2023 and 2022, GAAP and Non-GAAP net income (loss) per share are calculated based upon 141.5 million and 132.6 million basic and diluted weighted-average shares of common stock, respectively. For the nine months ended October 31, 2023 and 2022, GAAP and Non-GAAP net income (loss) per share are calculated based upon 138.8 million and 130.5 million basic and diluted weighted-average shares of common stock, respectively.





12



ZUORA, INC.
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)
(in thousands, except percentages)
(unaudited)

Adjusted Free Cash Flow
Three Months Ended
October 31,		Nine Months Ended
October 31,
2023202220232022
Net cash used in operating activities (GAAP)
$(55,657)$(4,861)$(35,676)$(2,679)
Add:
Shareholder litigation71,377 54 72,130 237 
Acquisition-related costs28 — 135 — 
Less:
Purchases of property and equipment(3,075)(2,387)(6,913)(8,471)
Adjusted free cash flow (non-GAAP)$12,673 $(7,194)$29,676 $(10,913)
Net cash provided by (used in) investing activities (GAAP)$2,005 $(19,416)$97,026 $(165,922)
Net cash provided by financing activities (GAAP)$145,899 $575 $151,626 $239,003 

Constant Currency Revenue
Three Months Ended
October 31,		Nine Months Ended
October 31,
20232022% Change20232022% Change
Subscription revenue (GAAP)$98,048 $86,567 13 %$283,232 $248,878 14 %
Effects of foreign currency rate fluctuations821 5,594 
Subscription revenue on a constant currency basis (Non-GAAP)$98,869 14 %$288,826 16 %
Total revenue (GAAP)$109,849 $101,072 9 %$320,992 $293,046 10 %
Effects of foreign currency rate fluctuations711 5,592 
Total revenue on a constant currency basis (Non-GAAP)$110,560 9 %$326,584 11 %


13


v3.23.3
Cover
Nov. 29, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 29, 2023
Entity Registrant Name Zuora, Inc.
Entity Central Index Key 0001423774
Amendment Flag false
Entity Incorporation, State or Country Code DE
Entity File Number 001-38451
Entity Tax Identification Number 20-5530976
Entity Address, Address Line One 101 Redwood Shores Parkway
Entity Address, City or Town Redwood City
Entity Address, State or Province CA
Entity Address, Postal Zip Code 94065
City Area Code 888
Local Phone Number 976-9056
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A common stock, par value $0.0001 per share
Trading Symbol ZUO
Security Exchange Name NYSE
Entity Emerging Growth Company false
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