ZUO - Earnings call transcript Q3 2019

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Operator

Good afternoon. My name is Mike, and I will be your conference operator today. At this time, I would like to welcome everyone to the Zuora Fiscal Q3 2019 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. now Investor call Relations. will Huh, to I of VP instructions] turn over the Joon [Operator

You begin may your conference.

Joon Huh

call. Thanks, to Mike. conference Zuora's welcome third quarter Good fiscal XXXX afternoon and earnings

Chief remainder financial me quarter well Executive the Chief Joining quarter results, the Officer. of to as for purpose outlook as fourth call The Tien and on provide are Tzuo, some Financial Officer; Tyler color for Sloat, year. today the and of Zuora's is us our today's provide Zuora's our third

discussion of forward-looking Some today statements. and our responses will include

a So materially of of our factors. as a variety reminder, differ actual results a as could result

You can most release our recent earnings find Form XX-Q the the information those in filed issued and factors we today, with regarding SEC.

non-GAAP the reconciliations several in today, Finally, are included referring financial related earnings measures we'll to release. our to and GAAP measures be

Relations links For our visit or learn a Tien more to about today's it and And over me SEC to turn filings, Investor site earnings of please call, our replay of with that, to Web Tyler. copy Zuora, let at investor.zuora.com. release, a our

Tien Tzuo

is Joon. Tien. to earnings call our This as a you, Thank third public company. Welcome

Tyler Sloat

is afternoon us for you And everyone. today. Tyler. joining good This Thank

Tien Tzuo

quarter. very to about am talk I our today third excited

EPS. our me all QX, market. metrics, Let great of our subscription We continues total results. expansion continued in saying total deliver be Growth was very to financial to QX, across quarter. we addressable it revenue, we operating a by start that In strong to strong. ahead and see income, continued came expectations In revenue, in

but entire more and just services, is industries subscription predicated market Our not launching more on shifting. companies

Renault. well Peugeot, we Motors, signed Over existing with Kia the as and customers, along GM, last on Toyota, our months, as Ford, few

can years and products, initiatives We entire five industries is space. are XX solutions growth. didn't within now and manufacturers. great we example landing vertical auto as the see world's our leading it's recognized strategy This how this top quarter, of both of to expanding even lead continue great, new Billing for an In exist car durable RevPro, to ago, that their for our a entire of six and us the connected of in the long-term behind demand strong

for many with big, you deadline might compliance from has this passed revenue That RevPro, big what for automation Regarding to ASC we're has examples that seeing, demand give now we'll XXX significantly the companies, and is for be the growth think product not a some demonstrating quarter continues that slowed. opportunity.

I'll integration see for don't in why especially the with growing Finally, Deloitte partners, to I before system and quarter. high-level the that open we our momentum well. PwC, bit quarter, we on Tyler, this with continue, continue as and touch But results a

Tyler Sloat

Sure, Tien.

million. the into quarter. In details. million. for and I'll provide guidance in As XX%, but total to to We really now you we look call, had highlights. another future, by revenue our at mentioned, good grew and revenue QX outlook also $XX.X year-over-year, metrics operational XX% let provide we QX, some I'll the our Later grew me $XX.X though, go key subscription deeper by we the when and financial financial

have one-time to an $XX.X We As our believe revenue million revenue accomplish total in loss our subscription we business. that this than in brining should able it versus but the improvement previously, while quarter. QX. revenue we a which revenue services to were this million, normalize non-GAAP down slower we a prior $X.X of had well, anomaly year related as QX operating to is the quick year-over-year last reminder, grew highlighted big that in reason RevPro uptick We'll professional growth

guidance range $X.XX. continue leverage non-GAAP negative EPS, We led this above of All all metrics. outperformance to our we scale in resulting across gain our more these model. in we As on to delivered business results

Tien Tzuo

Thanks, Tyler; of really, proud quarter. our really

the let bet Now, is unique time, that is confidence period sustain on continues the solutions us bet that built we we're in demand seeing strong this to some decades. not we Expand to strategy. Land only we The this quarter, will can company which we're years that wide you continued what call strategy if delivered. fundamental lead spread color seeing for give subscription extended behind what of economy over continued that of the an the The on and level our all technology me give have this of is growth

expand focus companies other we entire landing SaaS where land industries. a and on company, single our Now, talk about within and expanding

sector, and SaaS, Let's Avalara, cloud, is SaaS vertical. and like these the here well as companies preferences shift models. have so the Still [indiscernible], we're DocuSign, Salesforce, now by of for led NetApp. as which represents our It's both of Zendesk, PTC, half about core the and Today, pay-as-you-go companies, is the The hardware, software players, to more adoption subscriptions behind known. namely technology Symantec, established at look the our first business. well

these the Now, leading growth. continues you are is, fast shift subscriptions to powering to companies entire that these is how all industry know we the now automatically are in this here key growing. The our behind guys sector, as

starting with Now, with same has media thing played newspapers. the the out industry,

again today the growth going newspapers after through years through Now, digital subscriptions. are of finding hurt,

Group Fairfax in Corp publish the land ago. and We later the Singapore; industry XXXX; years Straits Nordics. early Bonnier Times, the in that with Group, working the began of to Times helped XXXX, in which Journal The of The in Times, year. Times us shift biggest The newspapers Australia, the Street The the Globe; Telegraph Boston Wall and The then saw in publishes XXXX; of News London on The first Seattle and Sun. this we That Financial Then XXXX; UK Guardian, Now, started The and focus and they

We like is and owns landed Variety Media; magazine UK, which Media, also and who Rolling TI publishers, Penske Bloomberg; now Time Stone Magazine.

around BXB we HBO, also to expanded publishing working with and media XX help newspaper PayPal, like payment hold. launch publishing handle we're different So direct take companies digital about Today, groups. like companies businesses, new S&P And scale Global. also Amazon, you're with the Group, effect major them network to methods the or new and experiment world, debit. really seeing offerings, other like their starting We bundles, Perform

is won't over years. Well, for segment, five Now, this we it be actually Zuora transaction we can perception this Billing turned to do out news in know the growing? wrong. the sector that grown through for over see how our average system, servers; people pay have last XX% The on volumes

the millennials of subscriptions And age fact, are for industry. showed the coming In people that now majority fastest-growing over under is structural the XX. new report signals demographic. long-term from A past XXXX couple this of of Routers years the growth the

newspapers bet we've media overall early in major the does So XX% XX% what representing become that rate us? seen companies averaged mean of our It has -- means one has revenue. that subscription our year engine. into turned subscription for growth growth The about that growth largest seven and from all last our on of the verticals, has years, revenue a publishing approximately our over one engine of

which subscription So growth industries models growth of time. then through extended unlock period our you see helping an can powers we're over business

Tyler Sloat

our this highlight quarters, vertical accounts they we see which we've and model. changes close of models business people say initiatives. seen a participants don't amongst a model in itself they vertical. industry. subscription recent would consumption-based subscriptions What some aligns most a and traditional great like that against which We a newspapers enable inevitable as other in naturally example or out think key One other strategy becoming their to is competitors. when them So, think the industry line team and publishing, automobiles. is Then is and the execute within of industry, digital land few a vertical publishing is or But subscription-based business expand playing pervasive to an growth their

Tien Tzuo

That's right.

have the with auto As or call, what's years of celebrate they Toyota Motors I and going cars Probably to Lyft and on anyone only here? now mentioned cars, of obviously come, top are six trend. the to all XX buy decades. the that Self-driving But when top manufacturers, onboard. going used likely the Kia on we this Uber next will and very fewer fewer over who's we

So this. McKinsey actually below services, expand morphing And says they mall you've been the whole the Center, XX%. all to company. Trade XXXX Ford auto analytics. a report services could mobility navigation from services, exhibit down from has revenue a pools diagnostics, World the all A growth, company they're vision for a services to in services And if ever content showcases their that turning car know major manufacturers, by that

six of well picking for also becoming Today, Europe, a began services expand in ago top years we have OEMs, the vertical. XX few Service early and same connected Trucks, Wheel seeing Now, like leader the as to up and to land in as addition OnStar, the execute started Daimler the XM. playbook, and then leaders this overall we Sirius the and Volkswagen's

it's are automobile think say, subscription fair the leading I provider to entire of industry. the for now solutions we

what vertical the subscription And not in set the play new facing -- for to to handle did then also We of verticals to come newspapers, them, five just revenue same decades with autos to about and well-known we seeing but So entire industry get staggered you're and a with to the the growth, dynamics as record service help looks they up system portfolio us, is to only for with in them we're faster. of and complexity, to spin that that become years. by revenues market disruption customers for come. grow

highlighted organizations, in verticals, They're of it's that got options. YMCA service utilities like seeing highlight range I themselves the to We've midst experimenting with land days, early example, to models. reinventing a to Now, services that calls industries other membership-based two with financial subscription new further these wide in services. Quick also customers Billing the come. we and of are in new starting we're all just and but hope still future we're

Tyler Sloat

All in grow reemphasize, that over leaders growth long in our we revenues of and follow So, early them. a with line do subscription the intent others industry strategy, suit. consistent core to time. get subscription in to rates are the of delivering our XX% in period is lock that identify as with And very model, this to stages XX% transitioning this to the their for business a industry, grow is industries

Tien Tzuo

The strategy working. is

have mission-critical we that strategy both models. complexities a products highly, and And automate our land not and for concept highly RevPro. on the of subscription can the customers. by one, is makes what our financial to they're Now, technology. use we flagship generated differentiated, Billing simple these based customers, two to but course, They're work, They're

that also best the as in product recognized let's in about talk most recognized Now, market. is widely It's product as but our people the market, the best know billing RevPro.

So to MGI is the for RevPro Research, ranked software. solution example, for recognition top according revenue

you of now to number for a heard an that we've companies deadline. on days, many ask XX ASC last for XXX demand market this passed especially update RevPro, the For the seem be

systemic of that highlighted struggling all compliance, that So is that launching, XXX problem companies their flexible these was new only couldn't what public to their short-term realizing rush of they because that were with bigger companies real manually we're thing they that operations found companies is ASC these it ASC problem. the the just trend get finding manual a Excel-based this lot and These models the them be the revenue more with scale but a approach. companies recurring a Spreadsheets, XXX, to solution. do to were never are and is band-aid many consumption

was great a example, and portfolios. sciences the quarter Viva, SaaS most leader story, life many it's an a of they're I in space, give you from example success in of this past your know fantastic Let's Viva; suspect

hitting was compliant it's XXX complicated putting help solution, recognition the business. been and year, this next about revenue has of of this using last they scale and this operations, to to for the came ASC manual public ASC They but them. while, put them an year become in lot to they they're a back how $X a for year, to revenue XXX Now RevPro part spotlight now efficiently automation on quarter really effort then of and spent Viva what become a billion talking selected

Not that being last complexity competitive. like XXX is demand and platform away, this these can larger to ASC RevPro as see and a difference compliance. That's being was underlying in with for automation continue good companies in the revenue a ability there's we the on the Clarivate, the why other signed the a big, not in all of about see of simply to the on the gone One see business Digital need cover QX, public got mentioned between revenue is the the automation scale deal who their last efficiently chose RevPro integrators. how because is bring limits we and spin-out business that product and best just goals. significant many meet first bring to big also by product. Deloitte Pivotal, place. market, to automation their both you Reuters. efficiencies, compliant enterprise I now more on with RevPro revenue which helped our that's our our companies driven for saw we Thomson centered and recognition thing So The It's we've but we And a value in reason Carbonite hasn't with quarter around of system proposition and compliant. issue demand versus call

Zuora Consulting shift companies Japan subscription-based growing in This business. but with partnership earlier, Deloitte to next You a announced recently Deloitte a to Network. Global step may help great our this announcement have announcement Japan with the collaboration Tohmatsu in seen in is

with these Second, partner RevPro a channels. strategic for new stronger solutions. customers RevPro actually about of closer acquisition building our come we're That's ties partners through firms, audit a quarter actually have deal our

Zuora and have revenue for relationship demand business addressing focused on PXVC example, software. automation joint growing the For a

In help using established excellence fact, a to PXVC has succeed center of customers RevPro. and

still building system some we've great, but really can of for channel over and honestly, in turn leveraging that time relationships, healthy Now early believe our business. this these got great innings with integrators a world, partnerships the into around we we're the

for point, an turn momentum seeing our it quarter we're how industries, economy in traction is continued to of of across what quarter. in for and market, At the expansion growing a over continued good this this leads subscription Tyler results summary, to our let that's the reflected solutions, expansion in our TAM, financial which to me So ecosystem. the show

Tyler Sloat

both with then operating I'll Tien. is key QX. on growth key growth rate maintained Customers really solid move in metrics ACV start of financial our I'll of and saw results healthy metrics then our in We Thanks, and operating to guidance. base XXXK over our a on We quarter This in these improving over customers our XX total to of and ended XXX. our total year-over-year, represent with metric XX% important of ACV. rate QX XX%. XX% more the as a customer of continues added of growth this

customers grow of in as to as a with continuing this transaction In had addition, we set grow are upsell of QX. XX% they them volume

about to dollar-based key Our upsell driven retention churn metric is we activity. Last by dollar-based This retention the near range outperformance dollar-based of of at In to increased XXX%. incremental for is or QX, second dollar-based recent of retention. end the settling long-term grow talked improvement robust coupled 'XX. our high fiscal end with our the year quarter, retention this may up better metric, high-end given XXX% XXX% range slightly

and XX% our In volume, Billing representing transaction processed us important the as our to X.X to we transaction approximately allow to is volume metrics, X.X saw grow Zuora system. more addition billion two through billion expand year-over-year, our nearly to because also our is platform. key model designed pricing QX, volume This processed we customers to growth In above transaction in continue QX.

moderate dissipates to ASC expect year was now let's previously XX% this quarter over this QX. how our to Total was XX%, XXX growth services million. led So, XX%. that growth for amount we services QX, XXX to mentioned in subscription XXXK, grew be robust upgrade translates Professional about revenue upgrade the at ASC and less We activity revenue professional even financial this talk $XX.X results. by for as In it the of time. grew

services non-GAAP subscription for line in margin QX. with gross in X% Turning quarter, and the was negative professional was QX; to non-GAAP margin XX% margins,

million XX GEI non-GAAP We index, increase XX continued expect efficiency in improvement our lower year-over-year to our structure non-GAAP We margin number to GEI, this by versus GEI sales subscription example In revenue our of the marketing better. leverage to business. we've similar sequentially QX, QX. the We margin $XX.X measures X% in the been comparing trailing as another improved be our efficiency is the and QX gross our in leverage marketing operating spend. million; we continue of grow as growth QX. operating by An operating compared which X.X, cost to improve the in the of our of expense months $XX.X sales for X.X to and measure subscription months non-GAAP trailing the creating

goal achieving while we've As growth long-term rates. said all our to GEI improve or the maintain along, is our

Tien Tzuo

Tyler. Thanks,

our in balance a drive you're what to future seeing is efficiencies between investing overall while So numbers growth continuing business. around for

questions billings some investors spending worth talking have about and about as cash time these probably it's often So numbers. flow

Tyler Sloat

start with spend we pushed cash call, million. second-half earnings mentioned our of of this that Sure, in me some we year. In the resulting saw of In of let free the prior negative through our some come at flow. QX, cash we expenditures flow $XX.X

more some see in QX. will We late of spend

applying In a some call QX. spend addition, we're from in

example, cash related new will office space, flow. may For to hit have free that and significant we deposit

As negative a with to fiscal we cash said last flow for continue year result, quarter. line of we in what 'XX million free expect $XX

Now to our consistent run, on in revenue turning the to XX%. this growth because Billings, on and more in accurate rate is trailing to believe line a reflection our of with growth to rates we expect one we've XX% another, from XX-month long been quarter business, settle focusing growth the long-term the billings subscription overall grow fluctuations we in view, and of

in mix customer-driven billings saw were this QX $XXX.X billings part representing professional terms and services a is thing into million, Professional higher growth. based trailing XX, calculated One pulled annual billing billings note, QX XX% was timelines. subscription strong quarter October billings year-over-year trailing on for XX% growth. of of XX-month $XXX.X or billing, that our was As as million, some to proxy of calculated XX-month we revenue year-over-year service

low the 'XX. call, provided number percentage On fiscal a QX we growth billings XX-month year XXs of for

Given XX increasing fiscal QX, our months our for calculated expectation we're XX% trailing for year 'XX. outperformance in growth to billings

Now future numbers let expectations. on me views and current our finish guidance with the

$XXX.X currently For expecting million net to and outstanding total negative loss QX, revenue to of of million year approximately of million shares are net $XXX.X million, million, of million, subscription translates $X.XX, to revenue to we're $X.XX expectations of share approximately non-GAAP non-GAAP operating non-GAAP $XX.X fiscal This loss the assuming $XX.X $X.XX, outstanding numbers. to and $XX.X $XX.X $X.XX million of per per million, of weighted of million to to of assuming to million, million, shares operating $XXX.X revenue $XX.X share loss million $XX.X of 'XX Tien, $XXX.X total million. non-GAAP those weighted revenue full-year loss subscription $XX.X $XX $XXX.X to XX.X million. to

Tien Tzuo

Tyler. Thanks,

I the I'll the automation market that in of Zuora in based. the we've the start the build system that bit competition, XX them a growth billing just fully on verticals newspapers see media, is that other and digital of over the as in in a questions to we a transportation, at ability top years we're for in continue call, and early, talked not decades It's turn vision our to key economy. stages like we'll I'm the to a we retail, as it that and diversified We're see every solutions best going because I'm of digital continuing headlines manufacturing over the a auto momentum. industry portfolio been now. As highlight can read we this story. ecosystem it to The just be shift we We saying other to realize, customer take secularship to but call, revenue and of started the We're because long-term expanding growing a rapidly early feels happy subscription got we years, with saying industries. our today integrators fueling Subscribed, entire started. ways in took many transformation recurring consider day. XX-year and getting transforming so the of take we and completely partners. it revenue the to head it in your and and it of we've software, mentioned little nature I'm got midst and it this ago about to play the on XX many call, This And a operator. in a of durable towards build major World you, proud it what's called fact that's it's

Operator

DiFucci John Instructions] [Operator Your from first from question comes Jefferies.

Tien Tzuo

John. Hey,

Operator

question Richard John open. is line the from Canaccord. next the DiFucci, your Davis of line from And comes

open. is line Your

Richard Davis

be how so. Hey, much. what transition, of you this someone that, going something kind give -- once you get very to do you've anyone, of is that. cycle tools think kind in questions, in and about true to you are the Prime. a think using A few you've talked customer right Amazon one, I this but moment before, or it's you're your in Thanks some then people much. thanks because and little success off. related like of you turn of can sure bit I'm am Talk I time there's quick when or Zuora, moment how and think Netflix myself about to conferences pretty you're very stuff make that heads-up that sticky, if going feel I renew teams at I like about I to And kind seen or of when when to going for well, subscribe that me that like, not, But should

Tien Tzuo

Fortune Yes, transitioning. on a know their on about right. economy. customers how a is major BXB what their for do And so Global I call -- a company launch like, subscriptions, just really key XXX the one was conference look phone product that their these morning XXX, all of BXC are success they're starting and company demand this today, things services. was the but subscription does They're subscription new the to customers customers, both question, with

the of of and relationship the model tell the can we factor, churn one winds about and companies customers. swing the things is a with chance of business you being to thousands strong the work talked level activity got are how relationships. the on around are. active the they These world, up And You've with based

So churning, thing measurements of marry and of which have view history customers these to customers all with to things that really put an internal that which capability, And you would not most, order our new from are have. say part I of this successful It's customers model. if in of do being the to together the system our key is a that. in business are really up-sell information all, using

Tyler Sloat

Yes, just and usage and say and that the right, as get out churn able Richard, identify also would on the being data you as I on packaging things to time from and you Zuora important be can of utility your patterns that product. up-sell you is for that And assign to kind through can of that. which and with, over engaging optimize your change then customers you to they learn and should pricing how based like

Tien Tzuo

model that could that more much of example a three fixed Web customers you out companies how And their a involved your twice based where grow to year, that. faster. every our modify for talked how their a about actually customers modify And give information, modification and across conference back as companies act earlier, lessons, if they're site companies come on their and our their example, of those faster. go grow subscriptions, shows, much back customers our we quick fixed business XX of subscriptions actually for it customer grow seem those balancing will, model does to the and But fast. to in a on of this is their model two and average, the subscriptions, but data can subscriptions, you Subscribed consumption. faster. a average do in there's I'll every see We usage-based of And on grow but you on And if come versus companies then right, one is times where actively based customer

as they this but us growth. people to to us, business see in we them information they're server optimize growth why see to can And come all for our big And a so as we base, capture help subscription business. our right. how looking actually driver customer to publish People come their that big, models this to us because that's to

Richard Davis

That's so super helpful. much. Thanks

Operator

from comes from Stan question next Your Zlotsky Stanley. Morgan

Stan Zlotsky

Hey Hey, apologies, we're a couple guys. This today. of is handing Stan calls Zlotsky. different

from the a aspect Thank question, QX been as get is from as involved? guys ecosystem to lap then that my How right, the thinking build contribution as the partner to take pardon just go about continue if from the really and inorganic as maybe already asked, important we ago ecosystem, to What shift heading that do thinking overall should billings, it out to be QX very a a level your big we just higher forward? about of go-to-market, start we right. prepayments. more are end, And certified well ecosystem? you. continuing you partner So where how does the professionals see and And year has to billings a partner the contribution you

Tien Tzuo

partner projects revenue turn of it's really whether to definitely in ecosystems Yes, growing into very are it it's right, And on chose importance. because department, talk I'll deep in the revenue these the do involved recognition the the CFO over the these. partner side, one, VP and the auditing department, are that much I'll highlight can about to see and companies billings. we We to then Tyler

of so business the we channel. highlight that that is actually And through coming XX%

projects. a On transformation more digital complicated. Billing it's side, the These are little

you're going Accenture to see companies, bunch Deloitte, a these other going of to to going there, right. You're you're see

And say so I companies. would is what these we're lot working a of with

excited something going us place. it's see in to in more We that the future. you're But about have talking And certification about. programs we're that pretty

Tyler Sloat

Hey, Stan, this Tyler. is

on about Let to me think expect QX your and question, what billings billings, touch and QX you just I asked there.

And also, We out billing we was quarter. and everybody pleased just QX we guidance time. we're that of though, called some QX. in of change amount the every there's over do quarter-to-quarter months. that, on XX which the things a pull-in QX, that a look, two saw quirky reason And a we trailing from trailing we'll was into But very year, a for raised see growth. little to XX a also was normally also some we terms there We to general our which the contributed decent good the we raised. kind that's to things of So, billings the that that with actually billings but see quarter. focus And really fluctuations that bit months, see. want In XX% QX billings in

Stan Zlotsky

Got it. Thank you.

Operator

from line Berg of next from Scott Your comes Needham. the question

Scott Berg

Thanks for here. guess couple of them retention a for was Tien, you gross being taking out a of one gentlemen. my called being net Hi, but better. reasons, I around dollar retention better couple guys questions.

any manage that next better of You that's more bit a years? place guys being is something over systems quarters in the to put to or be maybe little anything couple there anything, or to actively next

Tien Tzuo

big obviously Well, effect have companies churn to swing that you subscription is here. model a understand have going

of to So it's we something place improvements hope anything last these focus new show that huge XX in and But in obviously I it's a numbers. continuous wouldn't to ours, say on the days. continue we've there's that put year-over-year

we good. feel so And really

once revenue It's you of that product, fact core it's operations; in, the have the And product. sticky. company's on right, businesses. I the on look think whether we from our it the side, it's when goes a benefited sticky billing very the we're heart it's recognition running at

year-over-year. well how influence improvements we factors brining show are, And to live, two where one, are us and continue we for doing so customers that's that churn the

And the is The year I'd launching say are the of more second, streams companies subtle are that subscription them -- to increases. businesses passes revenue importance that probably surviving. these every

tried projects These say, science that shut year really after where a they And We're ago strategic or happen they anymore, two. initiative. these of initiatives; they're five, company's not something; it seeing been down part so transformation might've digital years I'd six, are right. a

amount gives so that really want to business. the still to And fact economy that tailwinds it's our we an on then that emphasize early and that right, us continues innings, to as enormous points of the subscription mature,

Scott Berg

becoming are the the your a Got And just into last with bigger a business. partner seen perspective question years' couple of answered that then helpful. it, partners influence I've follow-up from is, that was

have these Zuora around One six what a of that are I holds and significant over value about last it, getting Is the sometimes for in partners significantly deals customers. the take think, it platform they the get or talks they worried just you're larger things today? which sales momentum and deals for that the actually all-around about whatnot. larger because goodness larger, are slow business component deal is a as months lot these is the seeing of that worried approval something solution get picked or you're But the these longer I just your down up that is, sizes to cycles of wrapping think get these could

Tien Tzuo

big digital which go a of initiatives. you're right. And Yes, transformation in. These so requires are absolutely that systems set

around that. conference, recently actually of time Dreamforce, looked And will, stack, that think Deloitte you manufacturing stack, during Salesforce's Deloitte there stack. the at announced transformation embedded was If announcement Dreamforce I in a from manufacturing digital and if you an we're

us. And so lot that's news of for a positive

deal part are second mean growing these does longer. The is that cycles

think our happens very our is pipeline carefully. organization, sales I we what manage

a if will. they're to the marketing there's something, but a your budgeted to not that that's going decision keep that when happens, put a broader you going right. know interest Because short, is how actually when project bucket, a call And is it's move, there ready project, a company to then we happen that is that deal do our And we timeframe. cycles deal. so known do there's only we in if known you And

how We build engage you when have our to events. conversations our keep true of that's really size we consistent that pretty them continue as process And to the ready. you allows cycles regardless before of the invite but customers, them deal with customers system we cycles whether a to have involved. they're ready, deal to with But integrator they're sales is or our measure projects a

Scott Berg

Got helpful. questions. Thanks taking my it, for super

Operator

Your of next question comes line DiFucci from John the Jefferies. from

Your line is open.

John DiFucci

guys. thanks Yes,

can't I the am difficulties, but phone. technology sorry a analyst work about technical And I a

that. about Sorry

Tien Tzuo

Good morning, John.

John DiFucci

that's want better we've talked go pretty the last than I quarter. the since So, first even is about net over on years, to Scott's question, a back retention, -- to which and in lot

customers capacity that, just that RevPro much there, year from like Billing we buying like the that Collect of curious, how how are of whether the what this is buys or or it, existing then you or is net top started CPQ, more all can like, Or retention - like of another on it more product. -- they last they primarily gross back from Tyler, much the that was say, a so even I'm us, in up-sell is was Billings part and, or let's and delta So like improvement? coming back of customer XXX%, know tell now that's with, something, And the and of RevPro? agreeing comes XXX%,

Tyler Sloat

Yes, that's John. a question, good

in embedded two I think there's there. questions

on at done, from? and of really we there's And how said asked, it. able what them. is for better about on it's where So keep they the we've it's these the serious - true kind for past, the have gross to retention, so initiatives XX about And in are coming because what contribution side projects all side. doing So, our days. up-sell where end nothing you do happy up to we churn the there, in earlier we're getting gross a been churn Tien then net customer more But last Scott it are mentioned we've

Second, And really lastly, customers. implementing good growing getting they're we're and then kind of with us. at

a RevPro of XX% we up-sells the both synergistic. long which to so are that overlap We these up-sell mentioned in of piece, still, and customers. there terms products; all good with few very, we've coming that about for and still transaction highlight we which We the And continue grow them a one a highlighted is gets very using of got just really customers from. the that The going that are they that, has Billing. on number, continue of which of be system, reasons it that but our the not testament And just as to closing it's is that able that run is going to that cross-sales of that we been RevPro to of our cross-sale volume. new than the are to is continual necessarily but comes second billion, from products, of we're the very changed from also Billing think volume, deals. they're the to up-sell customers Nothing is focusing, number. majority And transaction open less at need over customers where in $X

John DiFucci

I pushing, could is delta in I'm know an improvement, you And gross those from to year-over-year, it's anyway. but me the tell it know you Great. us, one the like just is point, two percentage even -- important it

Tyler Sloat

Yes, and churn, gross to rate, think, and keep at we're And again exact not the churn have your getting lot you a going we're with I just talked better it. but really happy we percentage, this. better John, I I mean, about and give

John DiFucci

Yes, okay.

Tien Tzuo

-- think the going Yes, combination that grow put to as I the and other. our It's really together right, transaction benefit, of be the this the volume. ability drive churn, key they customers in reduction it's not that a is it's both with to also in

them you their companies how larger larger, the that's how across help we them and tend newspapers, call we services chose can the successful, of we into can mentioned why a that industry expand land but then go and and industry the that's and starting we know, have grow strategy, way grows. why at is auto, inside that's we highlight can as fair deal growing think that to and have the I like to company right, and faster, be into go we a we a where it, land, to think we launch in, most look iterate, I expand it that gets land

to growth how and tech. and engine that, and a growth dollar a in emerging We've of net in to like We've media. building that, see as going we're really, that's strategy. got really you in We've inside you're we're engines retention growth And growth number a you that us going part is that's so, of engine engine the know, multiple to see auto, company. that's continue the see top can got really got a

John DiFucci

thanks. Nice Well, you. thank job guys, Great.

Tien Tzuo

Thanks, John.

Operator

I no are the turn to the at presenters. back this time. call There questions will further over

Tien Tzuo

you from look Great. very to we you much hearing you Thank forward to Thank joining talking the quarter. us, and for you. throughout and

Tyler Sloat

Thank you.

Operator

This concludes today's call. conference

disconnect. now may You

Zuora (ZUO) 29 Nov 182019 Q3 Earnings call transcript