Zuora (ZUO, $6.33) posts narrower-than-expected fiscal Q3 loss

Zuora Inc. quarterly earnings that beat expectations, but provided a lower-than-expected guidance. It also announced plans to retrench around 11% of its staff.

The software company incurred a fiscal third-quarter net loss of -$37.0 million, or -28 cents a share, worse than the year-ago loss of -$22.9 million, or -18 cents a share. On an adjusted basis, Zuora lost -2 cents a share, flattish vs. the year-ago period, and better than the FactSet consensus expectation of a -6-cent loss per share.

Total revenue rose to $101.1 million (from $89.2 million), beating analysts’ expectations of $100.1 million. Subscription revenue of $86.6 million rose from $73.8 million a year earlier, and was above FactSet consensus of $85.7 million.

For the fiscal fourth quarter, Zuora is anticipating an adjusted loss per share of -6 cents to -7 cents, compared to analysts’ forecast of -3 cent adjusted loss per share. The company is expecting revenue in the range of $99.5 million to $101.5 million, vs.  analysts’ estimate of $102.8 million.

For fiscal 2024, Zuora is expecting 11% to 14% in subscription revenue growth “with the low end of the subscription revenue growth range reflecting expectations if current macroeconomic conditions worsen.”

Zuora plans to lay off about -11% of employees due to the “macroeconomic dynamic,” CFO Todd McElhatton mentioned in a statement.

Contributor

Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.