Q1 2025 Zuora Inc Earnings Call Transcript
Key Points
- Zuora Inc (ZUO) reported a 10% year-over-year increase in subscription revenue, reaching $99 million.
- The company achieved a record non-GAAP operating income of $18.6 million, representing a 17% operating margin.
- Adjusted free cash flow hit an all-time high of $31.4 million, a significant increase from $13 million in the same quarter last year.
- Zuora Inc (ZUO) is on track to exit the fiscal year at a Rule of 40 framework of 30%, up from 26% last year.
- The acquisition of Togai is expected to bolster Zuora Inc (ZUO)'s capabilities in usage-based pricing, particularly in the SaaS market.
- New logo business continues to be affected by macroeconomic headwinds, with companies delaying large multi-million dollar projects.
- The number of customers with an annual contract value of $250,000 or more decreased by 10 sequentially.
- Dollar-based retention rate (DBRR) decreased to 104%, down 2 percentage points quarter-over-quarter and 4 percentage points year-over-year.
- Professional services revenue decreased by 19% year-over-year, representing a decline in this segment.
- The company experienced longer sales cycles and fewer transformational deals, impacting ARR growth and DBRR.
Thank you for standing by. My name is Pam, and I will be your conference operator today. At this time, I would like to welcome everyone to the Zuora, FY25 Q1 earnings conference call. (Operator Instructions) I would now like to turn the conference over to Luana Wolk, Head of Investor Relations. You may begin.
Good afternoon, and welcome to Zuora first-quarter fiscal 2025 earnings conference call. On the call, we have, Tien Tzuo, Founder and Chief Executive Officer; and Todd McElhatton, Chief Financial Officer; Robbie Traube, our President and Chief Revenue Officer; will be joining us for the Q&A session.
During today's call, we'll make statements that represent our expectations and beliefs concerning future events that may consider forward looking under federal securities law. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date. We disclaim any obligation to update any forward-looking statements or
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