| JEFFREY R. VETTER | March 22, 2018 | EMAILJVETTER@FENWICK.COM DIRECT DIAL (650) 335-7631 |
VIA EDGAR AND OVERNIGHT COURIER
U.S. Securities and Exchange Commission
Division of Corporation Finance
100 F Street, NE
Washington, DC 20549
| Attention: | Barbara C. Jacobs, Assistant Director | |
| Matthew Derby, Staff Attorney | ||
| Kathleen Collins, Accounting Branch Chief | ||
| Rebekah Lindsey, Staff Accountant |
| Re: Zuora, Inc. Amendment No. 2 to Draft Registration Statement on Form S-1 Submitted March 5, 2018 CIK No. 0001423774 |
Ladies and Gentlemen:
We are submitting this letter on behalf of Zuora, Inc. (the “Company”) in response to the comments of the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”) in its letter dated March 16, 2018 regarding confidential draft no. 3 of the Company’s Draft Registration Statement on Form S-1 (CIK No. 0001423774) confidentially submitted to the Commission on March 5, 2018 (“Draft No. 3”). The Company advises the Staff that it publicly filed its Registration Statement on Form S-1 (the “Registration Statement”) on March 16, 2018. The numbered paragraphs below correspond to the numbered comments in the Staff’s letter and the Staff’s comments are presented in bolded italics. For the convenience of the Staff, we are also sending, by overnight courier, copies of this letter.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Key Operational and Financial Metrics
Recurring Profit Margin, page 70
| 1. | Please explain further why sales and marketing expense is excluded from your calculation of non-GAAP recurring profit margin as this expense, or at least a portion thereof, appears to be normal, recurring cash operating expenses necessary to operate your subscription business. Refer to Question 100.01 of the Compliance and Disclosure Interpretations regarding Non-GAAP Financial Measures. Also, clarify further for us |
U.S. Securities and Exchange Commission
March 22, 2018
Page 2
| what this measure represents and revise to further explain why management believes this is useful information to investors regarding your financial condition and results of operations. To the extent material, disclose the additional purposes, if any, for which management uses this measure. Refer to Item 10(e)(1)(i)(C) and (D) of Regulation S-K. |
In response to the Staff’s comment, the Company intends to revise the Registration Statement to remove all references to non-GAAP recurring profit margin. These changes will be reflected in a pre-effective amendment to the Registration Statement.
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U.S. Securities and Exchange Commission
March 22, 2018
Page 3
Should the Staff have additional questions or comments regarding the foregoing, please do not hesitate to contact the undersigned at (650) 335-7631, or, in his absence, Ran D. Ben-Tzur, Esq. at (650) 335-7613.
Sincerely yours,
/s/ Jeffrey R. Vetter
Jeffrey R. Vetter
| cc: | Tien Tzuo, Chairman and Chief Executive Officer |
| Tyler Sloat, Chief Financial Officer |
| Jennifer Pileggi, General Counsel |
| Zuora, Inc. |
| Gordon K. Davidson |
| Ran D. Ben-Tzur |
| Fenwick & West LLP |
| Robert G. Day |
| Andrew D. Hoffman |
| Wilson Sonsini Goodrich & Rosati, P.C. |