ZUO - Earnings call transcript Q4 2022

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Operator

Good afternoon and welcome to Zuora's Fourth Quarter of Fiscal 2022 Earnings Conference Call.

Our line has been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session.

If you would like to ask a question during this time [Operator Instructions].

If you would like to withdraw your question, [Operator Instructions] thank you. like of the remarks. Investor would Luana over I Head Wolk, Relations that, to call turn to With for introductory

Luana Wolk

you. welcome XXXX and Good Fourth Thank Fiscal Quarter to Earnings Zuora's Call. Conference afternoon

are Fourth today, purpose Todd for President our the joining to results and and Chief Executive Zuora Revenue of Officer, provide is our me Founder will review and Fiscal Tien Joining McElhatton, Traube, Robbie us The year today's Chief and Officer. call Q&A Financial outlook First Quarter Chief session. Officer, Zuora's the for our Quarter be Tzuo, also Full XXXX. and financial upcoming

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

results So due differ materially factors. as actual to a reminder, could our several

the filings today our GAAP in to reconciliations earnings release. release You measures the information with several and included can will find we most non-GAAP and in regarding be recent to And are factors those finally, SEC. measures referring earnings financial issued our risk

of our visit our to or investor.zuora.com. about visit, please a of the Zuora, to relations learn For website call, replay a earnings investor at today's copy filings, more SEC links release,

Now, Eugene. I'll to the turn call over

Tien Tzuo

And for Welcome Zuora's call. joining quarter you, you, to earnings thank outstanding We fiscal us. XXXX quarter. an Thank fourth had Luana. everyone

in not clear are we that said quarter acquisitions economy subscription year new in to start saw of this and ongoing the catalyst hold in year, this opportunities about with around that saw were We our flow to quarter but our the we dollar-based their line. this positive. We This the on thrilled started building a and economy growth the We These the guidance broaden marked continued case. us and In year. our was reflect the in with fastest-growing in new today, And large and as the big companies product in momentum for our let pursue be customers free thrilled upsell This also Fiscal and turning when quarter only revenue At we such year, the am subscriber was continued leadership customers. ambitious disruptors, in a I was as we for loss recurring I of investment goals a deliver absolutely customers the excited the The offerings beat the with of year relationships top-line record-breaking is delivered. Not bottom that the business and companies. With me that about year well our retention recognizing opportunity faster into Both operations. rate. ARR, deliver cash to with first we a could do $XXX models, with the we deliver those the way other business. we as the innovate saw I'm results growth experiences. details logos. to to additional space also growth, some that enable allows targeted to the technology QX, investing million XXXX Silverlake, subscription subscription incumbents potential exceptional undeniable to partnering enterprise that, leader non-GAAP growth. initiatives, us partnership. we value global year. relationship. on biggest that our lies in I more to investments to by that share from the revenue momentum motion, and share share a path offer focus a strong

the businesses has entire over growing to decade. the shown subscription that continue anonymizing latest In faster which this outpace index S&P long-term of data report, fact just aggregated launched. And our economy Zuora X.X customers past subscription XXX analyzes billing times time

shows at economy to create that home have to continues the their some whether businesses this holding while their All opportunities on these pandemic a our are stay to of Zuora subscription help turn into journey. and data the them overall new-year. subscribers phenomenon subscription accelerating temporary, tailwind Now, wondered for to growth companies on as was us

brought in example, leaders automotive Suzuki powering who fiscal car Corporation, on For services. 'XX, connected we like is Motor international

iWear manufacturing fact, are for the ceramics known one top on phones, help the better XX business future established models. for this is Japanese mobile Luxottica, and XX brought Oakley, many Kyocera, like new multinational like who We to Gucci Zuora IPOs. a company companies Nokia In customers chose and Zuora Gusto, and of transform today, Prada global Zuora customer leaders embrace largest - making Hitachi, and electronics brands of Global, technology year behind Disruptors preparing who and like customers. manufacturers auto now HMD just global or like scaling manufacturer, them centric

value And QX, fact multi-product and in contract with a XXX. companies annualized said we contract which a year $XXX,XXX $XXX,XXX in ACV, customers In value of over in deals and this strategy, our over we on accelerate dollars. our focus were over large XX average at execute delivered. would the year, innovation continued added net quarter resulted our eight we This four million we or ending

to how digital multi-product this billing is and broader one key subscriber quote manage to puzzle. are Our the shape differentiator. revenue Ultimately, has And strategy more Why? monetize our need become process companies the critical buying in software. more is as look our their of companies services, to entire joining up experience. to the Because they only now

customers In including first-time fact purchased of Zuora suite, our market in our entire our leading QX, product. Revenue XX%

an we Zuora billing this year and result for between Revenue, really a demand As of Revenue. the integration the successful saw acceleration in Zuora Zuora

XXXX. for [Indiscernible] nearly bookings Zuora second major doubled product our in Revenue As fiscal

customers to Research books. MGI transactions XX% AD to share year, telecommunication also turn of and customers turn research Also Revenue reduce we revenue, media had investing for there's a enhancement their help to numerous not 'XX help previously of Zuora networking them fast Revenue of revenue time brand including close billing all this dramatically pace for automate an Automated Fiscal new Zuora new nearly in Revenue Monetization, already with real-time. delivered. doubling including heavily of business. innovation, company user we X, launched real-time universal support processing a revenue, few. quarter, a innovation solution one to Unified kits, Central our off Management are TREND, report. interface, kit talent and we independent scale number along new year Zuora customers provider This why of that's that we've the and equipment Revenue software incredibly engineering to the it This on as financial in of development to subscription this their to our to proud that And recognition. firm, our we Revenue launches, purchase Zuora processes And year And invested year customer ranked a of. Zuora development gateway and just name APIs, pleased pops with We CPQ capacity manual new a a like payment we engineering saw extremely

to we our in that this by increasing we said we our what accelerate said go-to-market shifting and we the reached a we end exactly objective. XX%, XX% this the and rate growth. of got is quarter This would ARR to year, to strategy. get dollar-based did. with Last we We ARR surpassed growth Now, quarter we motion; XX% would retention year, lend-and-expand growth. We're

ARR We five fiscal our the towards XX% progress great base, points year. percentage up-sell making end of growth. of our million rates our XX% to and we a $XXX within saw XXX% to XXXX target are year. take Well, in dollar-based achieving after opportunity our retention this the surpassed of that by by would goal we opportunity, a XXX% said the just delivering going full for a QX, We we installed a this ahead

in $XX to billion for bringing volume, we the QX fact, entire handled In usage in billion year. $XX us

countries. GDP that of is over fact, of world's the more In half than the

this Finally, that bring to helping as In into bookings, we into accelerate Zuora go-to-market said laid an a the become These space. our for out we XX% us what for we business exactly influenced continue deals, larger record over strategy that's partners quarter the firms QX out happened. will marked integration important us in partner practices, and build driver growing systems and year, enterprise year-over-year. further

management the team and best believe a accelerating. and the across on go-lives our about SI economy than transformational our new along we we've got year, quarter All consultants it I partners the fantastic plan to what capital are the in opportunity are has it us partnership that is end, be processes X/X footprint. shout the ZEOs who a Lake grew the customer the industries now this been with all Zuora, expand executing And integrator year and also to business over excited where lean a position, into accomplished even and business, we the has new Silver out lies I'll year-over-year, in ZEOs the to our more of than certified me momentous After have more call with our give to expand we in our to see able ever and our are a continuing We threefold we've of world the We to now for now further. Todd in the But globally turn ahead. financials. to opportunity year. let our can around we review partner. involved number a system and everything with subscription

off. started you, with We different I'll very to And over turn than we that, how Todd. are now it a company

Todd McElhatton

you Thank everybody. Tien. good And afternoon,

measures. discussion Our non-GAAP includes today financial

made press a reconciliation non-GAAP measures adjustments the selected can current year GAAP in to that prior which results. release, today's find and reflects both our details to includes of You table

ahead. on better XXXX, a off yet and the year, to At today, strategy of our of increase Zuora to the last working. off loss. in outlined innovation close accomplished, accelerate we what serve beginning operating QX of of us strong journey our and by we non-GAAP expectations go-to-market partner I'm exceeding gives our for Silver finished As our that excited to proof happy close year another as have to customers. And the for Lake plan we've as subscription pace our fiscal and point results, guidance beating year transformation revenue is report proud efforts we our I'm I'm we that with

for This free with overall several go-to-market new from quarterly execution great in space for We delivered fiscal a the quarter reached positive record we We we meaningful and growth our cash partners. bookings SI enterprise XXXX. are deals. flow and closed strong contribution multi-product

Total plan million our in XX% Let's was up in IPO. drive go-to-market Subscription driven XX% our our with revenue up total Subscription execution. by review improve for performance work $XX.X highest represents mix revenue XX% consistent Professional since revenue, top recurring integrator was quarter, is the revenue. fourth improvement million year-over-year, was This $XX.X partners, year-over-year. the our line and our a $XX.X our supporting of to overall quarter. the revenue subscription strategy X% services revenue services of to million, level to decline more our more towards year-over-year, system

SI was of non-GAAP driving point basis margin an subscription XXX our XX%, services improvement a improvement partners, professional success result As to prior XX was basis in blended XX%, over points Non-GAAP year-over-year. our of a gross margin year. the

reminder, holiday driven in by an with move schedules. As includes services to timing a training due Non-GAAP and partners cloud. additional was to projects cost professional year-end associated intentional the of our and step-up related the XX%, gross this margin investments our to SI the public negative

which We have for partners’ and past year, this consultants certified partner source contribution fueled deals. significantly influenced increased has

last QX, loss was the operating objective at driven of XXX breakeven. with top-line of improvement in by improved $X.X to an in a This basis compared of Looking points services operating operating gross the margins. million growth of X%, run is year. negative resulted from prior our and was or ahead, in loss margin Non-GAAP million $X.X near This QX an year. non-GAAP

at was of XXX using fully method. the shares share Our quarter count treasury the approximately diluted million stock the end

for with some we At XXX, QX, to reached continue year. enterprises metrics gravitate our Large $XXX,XXX these an our quarter. guided ACV QX, represent expertise our or of above end that product of of business. continues XX In on of closed of We above sequentially, spend XX% Moving year-over-year, last and the portfolio. XXX% and XX of we at points maintained or rate Zuora for key increase flat ACV dollar-based in deals $XXX,XXX to eight the at that year-over-year. of strong retention our improvement towards to XXX%, a customers the of ahead

RPO, This total which ago. is For to ACV grew our million, multiyear The or had activity obligations deals, greater is year success $X motion $X also go-to-market than in with system remaining performance versus those our and a integrator our testament a partners. XX% evident new million strong business large year-over-year.

growth processed in transaction Turning efficiencies growth transaction our Process quarter, is our volume, revenue year-over-year. billion as XX% indicative because volume representing billing $XX of our not scale. they volume billing to systems gain of the customers rate

ARR ARR free Investor at XX% fiscal to and that year our of X In cash ARR business. flow. Now, this This at driven looking growth ahead quarter year-over-year, growth of up by we record growth was year. new objective points QX, grew XX% our and our strong last Day sells another for announced

focus to to XX% continue growth us the be our XXXX. year. flow free cash our reach allowing for in We on positive to to reach for I'm million to cash that flow happy fiscal quarter, objective ARR report by was to entire XX% $X.X free the goal

million. XX. $X.X Total to business sustainable for growth the our towards while quarter of the the progress tracking foster in was rule capex invest to continue We

needs, future made strategy, to assessed the work footprint is our to look estate barrier and the of what we reduce going determination by we over our XX%. like, real location As our considering

a incurred and space As which more million. go-to-market charge reduction initiatives impairment we generate of non-cash result, $XX.X allow a and in reinvest growth. R&D to The further leverage us will

XXXX the we of increase and balance Fiscal million quarter million $XX over for equivalents, year Zuora. was the sheet, the prior to in ended an $XXX cash transformational Turning a cash with quarter.

the close laser-focused these of I on the amazing to our by out strategy. ZEOs work made year, who we results our As acknowledge possible keeping want

turn Now, outlook. financial to let's our

development go-to-market continue noted initiatives. our we on and accelerate calls, As investments prior to product and

XXXX. Turning for QX and to fiscal guidance

XXth days to fewer compared reminder, has quarter. our ending three quarter the prior April a first As

impact free EPS the flow the guidance Silver from Lake and Our not include does investment. cash

the Lake flow guidance update will the cash investment free after We and EPS Silver closes.

net per weighted million, of of $XX $XXX.X For operating revenue $XX QX, non-GAAP per $X.XX assuming to subscription million loss shares loss a to we share, $XX breakeven, million. $X.XX million currently total to $X outstanding share of expect of million non-GAAP $XX approximately revenue average million, of to

flow cash We expect be to QX. free positive in

revenue full year, to to million weighted expect We the approximately net non-GAAP million $X of loss shares non-GAAP outlook. breakeven, $XXX we're $XXX loss $XXX.X $X.XX to of per currently million per $X.XX a of raising share subscription average revenue million, our For outstanding of share, million, of to total million. $XXX operating $XXX assuming

fiscal a million flow a off, and to to with Robbie generate to the full To For the we we rate higher. Operator. retention to it and expect our are extremely bring. turn XXX% $XX we XXXX XX% over excited of or higher, year, dollar-based Tien, ARR questions about $XX Zuora's range And take of future, growth will that partnership the expect close are happy of Silver Lake million. cash in I or your and what we'll free With

Operator

Instructions]. [Operator

Your with first question the from DeGasperi of comes Andrew Berenberg. line

Your open. line is

Unidentified Analyst

data on some to economy going subscriptions I about think [Indiscernible] Oklahoma definitely impact is their much and index subscription way the look and so also on taking took our that Andrew. how be report, contributes this and positive XXXX get think that about you Hi, forward? that does continued growth momentum showed your you earlier, at XXXX mentioned pandemic for how Thanks able recovery. your question. targets for which a Would how And that elaborate about amid and town you you growth? to in

Tien Tzuo

at really it's twice an economy. every so published we represented building the doing terms businesses is. years look it part quarter, where that's that businesses helps report, economy that go-to-market and anything think building six we've go-to-market We're another companies, if of to if And isn't there's we've the you pretty row. puck done the that is the the long that question. over to a last get that for have in of a satisfies we in in it last a -- a we this a five over year companies innovation we X.XX believe is what in system, that economy. or disruptors. a every at is really you us We where the best is where companies look This subscription runway. description the know, by company another see We informed day, win if as for they're organization, it if It This us also the and world we're every this work and than speaks are going. what really month, And machine and incumbents of industry our tells done. over just our through excited, and growth traditional you is what decade, the is subscription the exactly and going, is both exciting this rate, This marketplace grew strategy. tells at we as you large Thanks year in will, shifting

so also good numbers the out that about long good this And feel long-term feel we about we Todd -- for our year. trajectory, upcoming laid and good

Unidentified Analyst

Thanks lot. a

Operator

Your next the with Canaccord line of comes Vafi Genuity. Joseph question from

open. Your line is

Joseph Vafi

year here the guys. and Hi, in to end to growing the it's nice momentum Terrific see business.

to we Silver to little some attractive seeing probably of process do thought what a going to Lake I investment. on you're shop do your you a just with down Now bit think aspects could the business. in they're But mean, premier some follow-up? just kind investment the and clearly going drill those to in about general the in M&A process and then thought all the the it be on funds? on and the initiatives, pedal Is the taking place perhaps or first internal in, of more of kind investment metal more then

Tien Tzuo

concept whole of investing. here. the and is you incredibly and investment for this mean, I thank -- Tien a [Indiscernible] is the I question. the excited. This I'm firm Yeah. technology technology

were companies back the in first the solely technology that the in I just firm XXs. think only there invested

they Dell, about position due the our they capital. would is and path what the that with the here the VMware, They the Airbnb, like they days excited they with expertise, with that having ahead seeing believe economy. like in is they're hood did And underneath subscription see really their their their Twitter. looked company leadership saw, their diligence. in with subscription and these economy, name about but You everybody their we say network, had. believed and Unity, They we're associated excited with and certainly it, I And

ahead. on into will, to you lean the If side, help our really us opportunity

or an new insatiable M&A on build a last big demand. subscriber engineering As for when acquisitions And talk faster doubled you would at Lake technologies, We're more. have innovating they year. we're team digital say be We really a to to I help meet than will certainly of More solutions our but our great imagine, pace can business ours. customers, them their this growing experiences, about appetite more this focus to having to monetize never, our models, side them Silver help build offerings. I excited

Joseph Vafi

And enterprise maybe know breakdown great again, it quarter of That's some a How Tien. the pure enterprise you and quarter. of And subscription bookings you the had versus me in in logos? then like had you're quarter for focused great more would large this the new characterize terms on sounds you deals. I players

Tien Tzuo

pretty see We healthy distribution.

do, media I is look emerging continue what at if say manufacturing companies, technology companies, within you companies, I we space to the technology it verticals. would think there's power disruptors. there's certainly we

on. the being talked companies think signed that of we we about I one Gusto

we technology I have just every our the [Indiscernible] phrase power be the many -- at think is if the think [Indiscernible] you think part And software, SaaS world over that and public so business. of a you about use gone look But them. X, becoming of the recent continues company. that company look, more X more that to If X, companies important years, last I

in is what service we would I software [Indiscernible] what of and path is to a become think a parallel Maybe is company. you seeing call the where business the looking quarter? model, company say up economy Robbie, the subscription you world, we're saw it every

Robert Traube

get looking in value out differentiated and is way what saying, of of the need they totally the we way in technology the customers in [Indiscernible] that quarter, we're it. terms the the have it

the we're scale, growing. no It's got it ERP in that so the companies. regarding Empires. what And team got think before think is supply in it's we and is essence replacement we're think still by the the enterprise cheap I surround, all something competitors They lot where twice of and is the more a handle, also in particular. and bottom end the you they same Same We the meet go matter there saying that the QX, of seeing it, A complexity I thing cannot the said and is what I end. market and cannot don't overall. scale. we're really the really think the attractive. con that top the good I've complexity reasons QX they've as ready enterprise scale best-of-breeds CR fact Plus, replacing we that definitely see the they that's especially for had

Joseph Vafi

cloud, cloud follow-up. That's got apples-to-apples thanks. margin investment know one costs that margin a perhaps more just public means expansion will Robbie, perhaps bit and down gross Todd. one might despite public more to maybe gross have that and cloud interesting I what additional then depend to and I be more And what great maybe drill the public year-over-year in and a your color, just was to bit then move for up

Todd McElhatton

Okay. Hey, thanks, Joe.

sold cost million during goods entire about of was quarter. the year, up in for the the that $X almost business the the and fourth for migration we ended spending On subscription of half

margins invest the constant. areas over time. overall is expect give in some hold to we year, Shree to got greater still that us relatively We to Next other going efficiencies

the and us breakeven would margin at so to to we a XXX a then to see as talked give fiscal overall expect XX. gross also level expect our going And guidance. up year. points bit will flat next that stay year-over-year, little services would margins basis a we margin between the about, closer acceleration I we but be for as year, We of then XXXX go ourselves maybe out So

Joseph Vafi

going and you team your area is then bay just one about would by how going that know mean real a reduce XX%. you work terms more lot reduced that potentially ultimately I of guys. assume you're -- just footprint in that feeling Thanks real are what And estate estate your I mentioned costs? to a of to virtual That's transition? And lot, great.

Tien Tzuo

I of were So where at, we lack people out where looked really place with were think the we've where the bay within area. primary

second we're The are I say what really and think the that's thing -- that the talking flexible collaborate. would we're usually into to what is, giving I seeing be ability things and is what is, about people we're we're specific people for coming seeing office to is

cost-effective to an we're all the QBRs, has they're think closes, like during if move in home. countries. has the certain we've teams last office distributed. see a earnings couple at forward Zoom But location bit on. no our little think our look to in during meeting increased their thoughtful the collaborating I going But we've us So more as way really do you're team, here each I about last going going as sales Sri good my And think would putting strategy job very got the that you're and going here engineering And a Everybody The thing we capacity engineering be doing traffic is say in on, more like. we're for a there's during commute. things you're for more that done to hey, sitting and more and what and in And this that. year But, I day, of coming teams, hour been to seeing of together. example, days. they've been things when certain sense is, I

not those those us return places investment. moving, better or some a you'll adding roles on get we roles so in moving adding where can And those of but roles; see our

Joseph Vafi

guys. Thanks color. for that you. Thank Great job,

Tien Tzuo

Joe. Thanks,

Robert Traube

Thanks, Joe.

Todd McElhatton

Thank you.

Operator

with question of comes the Brent from Phil next Jefferies. line Your

open. Your line is

Luv Sodha

customers commentary we pull-forward Hey, that? And you you This on one again some Robbie, about Maybe the comment Tien, heard within Luv taking demand for seeing buy and amongst Sodha overall like in the for to is on could maybe you demand any Phil. from environment? for Are Robbie. And Todd, first Thank and software? appetite continuing my your software. what's Tien questions. Brent of

Robert Traube

say great the was [Indiscernible] as you really see good I'd that a it as had And we as focal business is areas. whole. predicted, QX. as spread One sorry. a we looked across that, can our thing Really at

[Indiscernible] is overall we how anyway is where I'll we at it aspects, and good of look very [Indiscernible], also look when a to we in and I this as QX. we expected about and do And feel executed pipeline, I are so about

Todd McElhatton

[Indiscernible] Robbie love when for inbound pipeline RFPs, and has to about see a came of demand building is that's talked [Indiscernible] strong. remained RFIs, also

Luv Sodha

it. year, any comments And the based $X I net about do on how following the a churn? a may, at Todd, and think Got if XXX%, pathway XXX% next for over to you maintained retention or higher of the course

Todd McElhatton

Robbie being we're a where and with Day, to balanced just about nice their But think with quarter our credit levels, fact, new start that customer also to this saw good the this We $XXX say all-time very we last talked in as and infrastructure feel very a million and really investment around I last products the to Matter your the I'll good hovering our is been take-up added seeing retention. logos going in that to So of year, XXX% with along in getting balanced we is lows. team, back impact if adds up-sell. talked over new really row product. some we opportunity important, would think year, expand question. dollar-base churn balanced that we're as tremendous over have of lot a the with maybe tell ad would a I new And last And about DBRR it's about Analyst we've continue us increase that What about. standpoint. We that you feel able of we I the customer plus of there that The a had cross-sell is success has or helping we we usage. added very again, place really put quarters. really for seeing good maybe retention improvements people I to has in feel good the about anything, as third the see growth products. on

I've selling things this customers, their got and platform more dollar-based stool. like the retention. So helping our those us all the usage of product, We're new drive talked usage going about and through three-legged them it's the retaining we're past, are in

Luv Sodha

you. Thank [Indiscernible]

Tien Tzuo

Thanks Luv.

Operator

Your comes Craig-Hallum. of line next the question Bennett with from

Your line is open.

Chad Bennett

my Great. for questions. taking Thanks

on lead, couple the for down last on even just a Todd. maybe qualitative drilling me, So just And question expansion. net

I of think us how over relative we this quarter the and volume renewals? of and where and uplift that relative all were for deals we're that stuff did volume potentially a period to Was expectations? sold we pricing the be kind got going hump and in how changed, that And that tailwind that in forward on how pricing to terms a a out headwind. play on the case your would

Todd McElhatton

your volume between as grew platform purchased needed, us think of situation seeing, but from they as of this so went what transactions we've certainly last where helped that and volume have through. that some point, customers add-on, volume we're I a So had consistency you've on balance during the seen again, the super XX% we standpoint the seen year, more didn't the

a seeing upsell and we're us And there. again, the give product take-up. continuing So that's the nice new on volume to lift nice

Chad Bennett

it that basis, net good heading what there net last from with even and expansion lopped why on a anything were a quarter, maybe trailing and was But, assume into would bad improved expansion, on quarter? expansion clearly just missing you replaced the which side a on the net off the the year. we're quarter. -- effectively wouldn't XXX, ago I you year Is a you targeting And Okay. above

Todd McElhatton

for a we had to historically. look that you keep it think need and the to year, biggest started we've the Yes, first we in thing you of had it is QX I you our our ever probably quarter back back the at the quarter mind, time upsells, was QX to at quarter fantastic -- it where really was really if reaccelerate and still go last one -- was when

So it's a really tough compare.

really strong a off year leveraging QX is expansion onetime ago. a that or growth onetime that So

Chad Bennett

Good points. ahead. Go

Tien Tzuo

might of think to based low I a the retention [Indiscernible] a continue we've what dollar we're for little but bumpy, XXX%, that committed with and quarter Todd to upcoming a point taken year. on net be rise every from

Chad Bennett

the it Subscription we effectively, the that think guide, midpoint a that to I subscription maybe look do growth year rate and guide, growth, in that last ended. guess. you you one just at of the those on growth. that could. we just upfront at the should quantification, level maybe had standpoint impact I I how same close deals think midpoint, of the the we're I think year this subscription Then upfront hit And From last XX% if recall XX% Todd. It onetime year. about the things if some did

Todd McElhatton

things. about say Chad. year, think Thanks, I'd a When I last couple Yes. of

we customers it of on First growth. X happen really of forward-looking the our bookings about. all, And one of ARR subscription in the it takes the always wanted is starts to the that until now, we to showing quarters on best that's things subscription people do It's one and X, things up line. get revenue X, talk focused business. The metric the

feel And so exited growth. good, we we really XX%

about we off and we migration our their we've when term product license. benefits -- some that have customers You had benefited we And their in some done that, we've on-cloud mention renewal offering. we've had one-time final one-time of as customers they've of the on talked - some the as from through on revenue look had done rightfully Zuora that year, the did prem moving so

And a maybe benefits impact so or headwinds that the a in keep probably mind in plus maybe those currency of point little XX% that has of get. But headwinds quarter some that year-over-year. of we as at other do we into growth. are would And the won't move good as we year. X.X year we about thing ARR I so a And exiting that the got point overall, really

Chad Bennett

much. Got it. Thanks

Operator

Your Needham. next question Reilly comes from Joshua with the line of

Your open. line is

Joshua Reilly

Hey, guys, my thanks taking questions. for

color a a did over that deal of how relationship the on curious, mentioned I'm deals longer in about? should expect single acquisitions. be could And investment. Lake whether any like investment potential coming series you Silver us smaller period then the time? Can of on you a we potentially or larger give congrats So transformational

Todd McElhatton

Hey, Josh, it's Todd.

in. that the with and start he jump I'll maybe team, once can color I So [Indiscernible]

them. spent options, strengthen relationship them wanted the folks growth? really we felt things we Sheet of at strong about to look really help some opened accelerating, that introduced to like, we give were it'd as I've We look one really M&A, growth analysis, and at wanted really Lake, the product the Tien we and we or seeing Silver industry started assist partner you're in different need time accelerate that capacity strategy, time did came really our liked the -- ourselves to think of what our became do Balance is and about, to to talked When whether I started as we or the their about what a to up, strength us, Balance and and we we for subscription looking we need Sheet, And compelling. the some about have the -- they their been an quite talking to did that that be they take knowledge, it ecosystem with economy.

started that we ability compelling, the what that that talking one us was to in $XXX million, look offered get things the needed like, was Sheet of but about Balance really down to tranches. take they to As the

flexibility. lot first we certainly next of we and XX that a So over at down XXX tranche XXX the us gives then take down take the can months

to to adjacent out this in a what look period, if to strong earlier, as us looking that very volatile those especially having lots Sheet is it a a rates. wanting to about XX% to to be get And go There's of are at just going to Balance and of are our like we and relationship, we us But we're so of From to really to think having not customers demand. Tien go through mentioned feel see standpoint able and I areas go help Silver be great partner to XX% we growth and Lake be feel point, think really I'm us really at. our opportunities, through M&A. of turn I we an good we through lot this the insatiable M&A, helpful kind rates a think will accelerate

Tien Tzuo

Yeah. I'll just --

Joshua Reilly

Yeah.

Tien Tzuo

excited I [Indiscernible] obviously big picture we think I a that is we're about. mean, And mean, this. a that's the look, have I roadmap

is think our I big is the business going picture really, really well.

management would We have many are companies the of products. a I best best what And base bias customer the -- is my view that the industry, the strategic say really of team are for and of give we've in because got because view they them to a partner, our envious us because and of leadership they more. in us of hungry innovations, as our expertise, our

say And to to our transactions Silver we they now is whitespace really so there's anything what with based think dialogue with anything roadmap And be or the models. customers. our of experiences fantastic customers, business in Lake have subscriber right. about a else, our We're of yeah, side. build don't to order our close on by in going We right led lot our by and partner, need size monetize new

Joshua Reilly

could investments investment not follow-up adjust that ultimately beyond could a with from the on to lead Got closes, beyond priorities adjustment factored you just it. into are convert? And acquisitions when accelerating that deal that. And expense? there And here make growth funds then that could used guidance? currently the Are an interest that the after be for

Todd McElhatton

operating really No, the at this about margin. good particular point, we feel

line, line, warrants on and once be. and million, I And closes, give what I we're $XX.X expect that's then the final we transaction look expected what you only on $XX the the the so would bottom accounting like and amortization. we'll bottom changes will finalizing of guidance the the the still but interest think the million to

Joshua Reilly

guys. helpful. That's super Thanks, it. Got

Operator

call CEO will to Thanks, Tzuo turn remarks. There Josh. are for Tien I no back closing the further questions.

Tien Tzuo

today a big ahead us. you Thank look on a FYXXXX across like our you thank fantastic to strong the say for would as we close the globe all I you. towards to FYXXXX. Thank joining chapter and ZEOs

Our position you year. be. incredible entire proud another are only we've what Thank XXXX make exciting fiscal place are up I'm accomplished like what QX an for in we is I much. together, not the very And just be to shaping really Zuora to year. in people of fiscal

Operator

concludes today's This for your call, thank conference you joining.

You now disconnect. may

Zuora (ZUO) 3 Mar 222022 Q4 Earnings call transcript