Zuora (ZUO) 24 May 232024 Q1 Earnings call transcript

Hello. And welcome to the Zuora Fiscal Year 2024 Q1 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions]

to call like Wolk, to now President. Vice would turn over the Luana I ahead. go Please

Good you. fiscal conference quarter welcome XXXX call. Thank And earnings afternoon. to Zuora’s first

Executive Tzuo, call, Officer. Financial session. joining our Revenue Founder have us the Chief Traube, Todd Tien and will On and Zuora’s we Robbie Chief Officer, Officer; President Chief for and McElhatton, Q&A Zuora’s be the

federal be beliefs will laws. under During that and be not events statements representative of reflect as we statements today views securities our subsequent as of expectations make as concerning today’s considered date. that our may call, our represent future relied of upon any views forward-looking should These only and

several obligation forward-looking could These We that or differ disclaim cause actual any update results to from any and risks expectations. to uncertainties subject statements to materially outlook. statements are

and For important SEC. please to further our other filings financial factors that material of the results, the affect our refer discussion with risks could

today except And finally, unless mentioned otherwise numbers noted, revenue are all non-GAAP.

find release. You press both prior today’s in a results year periods and for to the current non-GAAP the can from GAAP reconciliation

Our Investor press investor.zuora.com. website a release call Relations at found on of can today’s be and Zuora’s replay

you, the I’ll over Now to call turn Tien.

start set ahead bottomline joining Luana, cash We executed We pleased earnings well years. and strides the in and on us. that Thank the great few of everyone made start top goals on also strategy towards fiscal year. the last the flow in at came has of for us we solid we both to our to you guidance year. guided the and and the QX quarter you, out profitability execution call. Zuora’s first thank with Welcome am for XXXX I and that our the

is and last currency came That revenue subscription in for XX% positive reported loss to profit at ARR reported. QX, since swing year. In X% grew a the a in X% XX% quarter. as a margin from and XX% operating we constant as grew

will cover with Todd, later usual, quarter. but as I’ll in further detail on, our Now the financials some for start commentary

know I’d macro, everyone’s we the consistent buyer with Overall, with on is behavior which minds. QX. start in that Let’s saw I in QX what was say

to shift business that ways and direct has technology it customers new for and of one emerging relationship, to template relationship revenue be critical a the of In progress. is shift. modern constantly The is our with recurring that enabling a a to continues their models that course, continues to when part monetize finding

buyers be we on and at new knowing field time, same the to the the be paying to year, focus in made some cautious, our adjustments off. to adjustments continue seem logo this At start sellers these wins of the faster, smaller,

In new any logos fact, in we of more XXXX. did QX year than fiscal quarter in closed we

the with these Corporation. telecom Canada second in than are of in annual company TELUS $XX with They more new QX billion in One logos largest revenue.

next-gen telco paces and Billing Zuora looked know wanted obviously through these they Now services. new modern They systems and as they a they at They services. Billing to for us their a system. everything selected digital ultimately power cloud-based put our

go live seeing more Gannett, Zuora. Also USA publication, powering the on going publisher Connecting QX, conversion process revenue now already XXX significantly door after Today. with we’re full subscriber are the and their including flagship million up for packaging a we to to subscribers, since order pricing X the newspapers offer and and rates leading flexible

its went annual data services. technology revenue. transportation digital €X They the on-demand a leader Billing that live billion in with in protection and security, industries and global QX as Thales automate Zuora The on more Group, well. than aerospace, streamline serves identity for

they Revenue Revenue. Zuora prepare to with for customers in late-stage more needs upcoming than SaaS security space the faster lands QX, Zuora XX,XXX as private making a for their also selected We’re In meet IPO. company their

Now, strategy. continue course, partners an of our be of to part important our

QX, partner. over of an included in fact, go-lives SI our half In

with our we’re well. backdrop, macro the partners Given as adjusting

focusing them We’re closing with a provide on smaller, that quicker ROI. faster lands

an deals. Zuora less solutions for seeing projects. The SIs large demand is In exclusively such multiyear that transformation news where are good are to global tied environment these large not

In SI our pipeline for us partners creating more fact, are year-over-year.

lands, our faster seeing we’re So part partners, including land-and-expand only but that’s our strategy. with of

that plenty on These enterprise focus be of giving is us room accounts. multibillion-dollar Revenue will to Our companies also are are This companies. expand. or

within sticky runway are and of enterprise a as know, gives you grow. Now land This account. an will our lot products be to us

contract Let’s the more look company’s churn $XXX,XXX average churn records of of past grew with the a number history. lowest at time what as year-over-year. months. customers an in the the in XX% percentage is QX, set or This we for ARR QX, actually second of In rates XX the in value reached QX. happened In

time. our you of Zuora out and the over If look expanded at than four more grew with quarters, past X,XXX this XX% over customers,

a you examples. give me Let few

sub QX, four say been a million just new several innovations, added recommit them they through consumption. also growth growth years. didn’t rocket and $XX They XXXX for Zoom help Well, we’ve powering we’re XXXX. We Zuora Zooms in Now in the including to rates ship advanced company. saw another

we needs. simply of Now single their ERP. fit that before decided the they they homework. was And best simply for Zuora do they consolidate renew, onto they, ask their Ultimately, should course, themselves, a

in look than leader that Let’s countries. to Zuora. more healthcare in they global operates a technology In continue at invest XXX QX,

and it medical to with specialty Now access the will in pay consumption-based hospitals major and Revenue, Billing models, be for Zuora for based able on a shift equipment how Zuora prices. with industry

us examples many retention macroeconomic environment. the at tough meet dollar-based the of despite in QX two just that XXX% rate to our enabled are These

our more what that ever-expanding and strategy product our more customers. to Of innovation, course, powers value our portfolio delivers our is land-and-expand

expand increased close not Revenue, Revenue as be star we In with deals cross-sell Zuora do example, for year-over-year, us average Take, Zuora our which the to price customers. selling of well. a our QX, but in only more helping deals continues

how global which from reaches newest delivered Forbes, portfolio of are the we XX our talked the Zephr, over do months In product QX, people our million in we leader, prior went bookings live XX% XXX there. print and Last quarter, well. and year in innovations last came about addition In to that online media Zephr. not we to on stopping continues

service more from customers Protection, we In uses transactions payments. Microsoft, Fraud QX, There our come. fleet AI fraudulent which a help lot reduce OEM launched to is analyze a and to

York be that am June next fact, share Online. we Subscribed event will customer product major I our In on New incredibly and announcements. in excited Live at XXst, to new event some City hosting

on publishing. we we’re how preview, a beyond to Zephr will bringing simply verticals media touch As just

on with to CRM and expanding We’ll making players. connectors that across manage to We environments, admin ERP Revenue we’ll allows faster tool moving Billing QA, join get started a track the to performance easier new to and be this your showcasing to environments more. and including all of get be will it all flagship our major test, We production, configurations of and Subscribed will hope And your a all these you products. preview more. be from Zuora’s and power systems Live various at unveiling us you

ESG the say is models business authentic with available our that at Finally, we Report to to that’s It our to we our to I to power. integrated Impact ESG approach ESG proud am we’ve investor.zuora.com. commitment Zuora. purpose in implemented and aligned an reaffirm latest QX, vision,

energy the help business. of that our to means Zuora, are subscribe global the for across we ways better ways That planet. people people, renewable ultimately, a row. better at want to doing second report, reached companies, better XXX% for Here to In maintaining we our announced neutrality modern in in and addition latest that offices carbon for year for we

the We’re proud progress and we’ve expanding we’re efforts. committed of our made to

for strategy in our remain the with I technology grow another us. business. solid year It’s helping closing, our clear they critical our subscribe fiscal In continues customers your to quarter. our with want thank to our We that be committed customers and to modern to as starting for commitment CEOs

Todd? I’ll turn review call financials. over to to Now the our Todd

of Thank healthy to and a start profitability. was with the good you, a year QX Tien. balance growth

pleased revenue for experienced quarter. buyer on we exceeded outlook non-GAAP in continue QX, revenue, margin as I’m and We to While cautious the goals. see our we subscription for delivered similar total we operating that behavior our

color reported, Subscription million, currency in was Let’s constant XX% revenue growing year-over-year $XX.X more exceeding into performance. the as high start our guidance. QX some end and XX% with our of

headwinds quarter on the experience of during dollar, the similar based continue in We U.S. some we what previous quarters. FX saw the strength to to

and Professional aligned is year-over-year. XX% go-forward decrease revenue expectations services. services with revenue of a our was $XX.X our for This total of professional X% million, represents

FX $XXX.X just a revenue third and headwinds of approximately is year-over-year. Total international, our this up quarter. million as which our revenue of in million, ahead $X guide created Over reported currency ended of XX% of constant XX%

to margin by XXX-basis-point gross investment was continued expansion. further drive subscription margin was our in non-GAAP For QX, This year-over-year. infrastructure improvement driven XX%,

professional margin year-over-year. was Non-GAAP gross services reduction X%, XXX-basis-point negative a

to at plan is Our run services breakeven. long-term or professional near

However, investment growth plan some the to revenue. support services our we team make the in of our to in near-term incremental subscription

illustrates margin Our experienced improvement points improved of our on leverage ending mix basis our nearly year-over-year, and in the saw non-GAAP of XXX our XX%. the incremental at to blended margin focus the gross an model quarter subscription This we’ve business. due

topline a a in QX in million This disciplined and growth million, XXX-basis-point driven business. non-GAAP operating income investment a the loss prior resulted by non-GAAP operating over year. non-GAAP year. QX compared operating X.X%, to continued This of was was $X.X $X.X the of improvement in last margin

We expect income continue to basis a going quarterly to forward. operating non-GAAP on generate

share was end of shares and the diluted fully using million XXX.X stock count the at approximately methods. Our treasury quarter converted if the both

other X-point key retention DBRR rate Now year-over-year. QX metrics. sequentially with a let’s ended flat a We and some into of dive or XXX%, reduction dollar-based

rates continue to see strong We our solutions mission-critical how are. given retention

retention company’s QX, in of a we rate again in entering our history. the had as fact, ARR percentage the In churn and improved lowest

year-over-year. above our cohort end we and that sequentially up contract of average $XXX,XXX the X% customers XXX to at represent up business. of in XX% XX% or At QX, continues This spent value, had

as As since noted our IPO has to our overall call, this metric the cohort business. majority our on our previous of execution this of less is indicative vast become grown earnings

metric no this going forward. provide longer We will

success Starting new and metric contract are we our in spending our land-and-expand space average more enterprise should strategy. continued quarter, This of $XXX,XXX value. a the in customers investors providing visibility this provide into greater or

represents X% XX% year-over-year. had our cohort XX% we XXX of business. this sequentially up up QX, This customers and threshold, In reached

among continue to types of enterprises, impacted deals. buying those certainly environment today’s success we see has While

customer. seen success on There that faster large but transformational digital happening, fewer continued our are produce ROI deals we’ve for deals

This ACV quarter, we closed deal one $XXX,XXX of deals $X million. including over four with or more,

call, volume last metric. noted we we revisiting would our be earnings our On transaction

longer volume transaction of visibility the our company, our so we we expanded main into has a providing one product no time, three over As are business products. are

year-over-year. $XX In our processed billion volume, transaction XXXX, representing growth systems Billing fiscal of XX%

growth volume finally, our we representing XX% Collect Revenue growth of billion breadth volume, the to $XXX processed of year-over-year. XX% we billion of speak addition, year-over-year. In of depth processed of $XX And metrics These solutions. and

volumes plan and new to annually Going ebb disclosures provide forward, we as these flow. quarterly

Now looking grew free flow. at ARR the reported. ARR and of end was QX, XX% $XXX.X as million and At cash

we on cash reporting cash cash discussed now adjusted flow, expenses free is April, course and we million. In which settlements costs free $XX to non-ordinary are free and excluding adjusted As flow acquisition-related was in flow, litigation. QX, related

best As $X.X flow quarter of annual can a our CapEx cash believe fluctuate the Total was basis. cash due it’s seasonality. an timing on cash performance million. collections a to reminder, free and to basis flow quarterly on for We the assess

cash with the and $XXX.X Turning $XX a sheet. million sequential equivalents, in increase to the quarter cash balance of ended million. We

impact As cash approximately previously the a $XX year balance later will in by litigation the our settlement announced reminder, million.

let’s financial to outlook. Now our turn

$XX Professional of growth representing million, revenue XX% million million last seeing of will midpoint. to currently year-over-year to Total relative continue million. revenue of at to year-over-year the subscription representing similar behavior and Starting are remainder $XX a guidance million conditions to the quarter are $XXX.X at We million, $XX these with QX. of We XX% we our of assuming the of $XX.X for $XXX growth for services midpoint. year. revenue expect the buying

income per weighted net shares share share approximately operating per assuming $X a $XXX.X $X and outstanding to to million $X.XX share, Non-GAAP of million non-GAAP of income million. per of $X.XX a

$XX revenue million net to For a million million non-GAAP XXXX, operating approximately to non-GAAP year $XX million year-over-year and expect $XXX $XXX growth representing total ranges, the the to million to $XX outstanding professional our midpoint, subscription services a total $X.XX and for year-over-year guidance the of of of $X.XX, million. revenue shares a of operating share we million, non-GAAP of revenue growth $XX of end XX% of income per at low full We at raising assuming and income and million $XXX.X $XXX are a now midpoint, the of $XXX to million, weighted XX% income. raising fiscal representing of our revenue subscription

committed For $XX from improvement million, $XX of XXXX. least we’re over adjusted fiscal XXXX, flow delivering at million free significant cash to fiscal a of

operating We and non-GAAP X% are year, minimum are a our objective points for also increasing now the deliver up guide. XXX profit our basis operating to committed from margin previous

to Turning and DBRR growth. ARR

DBRR XX% XXXX, XX%. year, with we ARR X%. to share of expect of For X% XXX% be under for XXX% growth expect annual we and fiscal of the continue fiscal target dilution And to to in a midterm to

For year, at by as awards equity the end calculated the this is four total during dilution outstanding the granted, the year. shares fiscal of purpose, pictures of number of net fiscal divided the

regardless the growth balancing and Looking environment. macro ahead, focused on we profitability remain of

for challenges critical run Collection Revenue to our to Billing to to Our and be solutions from business customers solve their recognition. continue

portfolio the more innovate grow their We multiproduct to to our monetize continuing offerings. for to create offers agility and look necessary expand them customers forward and with opportunities Our us. to

housekeeping a One we’ve note, stock-based table website, supplemental which down breaks our line. compensation IR OpEx by to added

to will and it With your and turn Operator? over I questions Operator. take the that, Tien, Robbie I’ll

Your Canaccord. [Operator line question Instructions] the from go of of Vafi ahead. Thank comes first you. Joseph Please

guys. Revenue Hi, on Maybe the we And for believe, have pretty strong. a and just the it’s to Nice up since guide was relative it. the nice operating I see the results guide nice margin there income, previous line, through If up the and than to maybe which went the the on -- the just leverage couple the performance afternoon. start year. Is operating the business? just assumptions see quick the in follow-ups. real to guide we versus of then guide Good in other million anything $X.X here in I guide in

Joe. Hi,

took we the revenue gave based at we the QX a we right. what that the raised guidance, the absolutely look when of So upon QX. We you’re guidance in and midpoint the end of lower for had

profit points. operating the up brought by also We XXX

about there and look, And and do really two the we’re for that One being course, certainly through to we’re we’re continue being continue to getting out opportunities things. thoughtful the our really everything we’re we’ll gain of extremely leverage us is as to we that growing, And getting are from model disciplined, leverage that of spend. year.

seen kind after go-to-market that close it’s size it’s positive the going for you over time. can do deal some Thanks versus smaller kind given really the large expanding net that But of then of of -- deals time And mean, may enough. maybe macro on the -- the it Fair kind that how those retention into rapid clearly Sure. the deals tweak these guys. term deals perhaps deals over macro, to and lot if we I probably without a more have occur dive see a of what headwinds? and means longer

We’ve larger no There’s subscription are Tien. towards is This models companies, we how change skews scale on ahead. focus models, always segment. go believe to about business this their we and in I’ll marketplace talked continuing Joe, business the that strategy.

that’s We We the an made obviously segment. account. think right

continue We to grow.

half about if of really intact strategy. once land going an right? the that so still these segments so companies part we’re about we our the And we the of deals, the second And same talking that strategy, feel that remains talking smaller get we’re land-and-expand we’re good expand customer part after,

footprint the certainly The talked I of we our the that Joe, customers that the we remarks continue. year, expanded in expect XX% hit fact will Zuora thing and with, would other is their with earlier you about during also

at taking our sure what look current a really is making environment directing the people macro be the where we’re and So on is done we just can sales where based we’ve to most now right productive environment.

the line Your of Josh Please next ahead. comes Needham from go & question of Reilly Company.

environment. a my know on here Thanks is questions. all and for challenging taking quarter job macro we Nice what the

a So is recession recover the Is at the before the are did this U.S. we’ve can market? European U.S., because seeing you’re possibly and You on they actually just the point? you large the heard entered economy. going trends something versus that IT any in business that the of market touch that side to technology the the U.S. maybe have in fairly before European Europe diverging on

Josh. Robbie. It’s Hi,

of Board really of the geographies within execution And the side And balance. across and see interest a strong that’s very high good get we to cautious have think behavior we think I strong, it’s is our our interest what strong a a across I teams. solutions. for there’s geos, there industries really there’s diversity levels is across more enables although fire really, more good our and the us because really

Got it. Okay.

I doubt, all you right, will just slowdown macro. experience add, look, tech, is there’s there guys in no a

do. You we macroeconomic What than business The situation regardless of and we is interest shift it that, regardless know where better of still subscription still see that is secular the are, important rates model to continues. is heading. where

the the that economy. and of And have in and and remain region we that so regardless technology important given relevant that’s marketplace

become if is Got Is on helpful. $XXX,XXX. metric per you just right look at the us, the switching figure multiproduct then help or metric? That’s Can become why any you that it. threshold color business that appropriate where to at that’s the this $XXX,XXX judge And customers performance? to on a level ARR new why customer average -- versus typically under

XX% very felt anymore. So, Josh, the becoming we relevant It really were metric, it, when $XXX,XXX of business. was wasn’t looking just we at our

is absolutely also that fact land-and-expand we view. of that things said the the of have point a One we’ve

of where we to put we $XXX,XXX XX% It the so our were the the like from right similar felt in land $XXX,XXX And when about metric. standpoint a Revenue to covering place us. plus was

in the that space, demonstrated enterprise to to going I that. of think landing And that’s after and types of be our ability the we’re going really so grow customers

from ahead. next line Sachs. Your comes go of Goldman question Hotchkiss of Please the Adam

taking I color for questions. go-to-market strategy. on in wanted should Do Could playing customers a couple customer these on for of trajectory and that Tien, you give we just looked go next behavior versus what the typical Great. for my years? like smaller to amongst about different historically think some Thanks us to the products larger? customers cross-sell back has landing out typically or that how upsell see land you

far on how depends when back go. say history, all it Well, you you

of I decade there to of and there were sort space, we this might think cost later, we something years over into we’re years hindsight lot two that should period anywhere. saying, subscription size right, a when didn’t this land probably, do hey, the out we deal a I three experiments, models see close companies a analyze XX years, smaller go a where And try. over four is when were in business year,

companies just important. of you You saying, and companies billions when We’re right? and revenue seeing Their revenue. models often you at that, not subscription public of are look, these recurring at companies, CEOs these out are with dollars look are look are business guys, multi-decade old there CEOs of XXX-plus-year

companies really We the just target of talking have manufacturing of not right? talking here, things. companies a in XX%, like XX%, same traditional And the revenues being are we’re that XX% We’re are our saying space. subscription technology XX%,

large would I saying, you we’re place. no start And more have in look, a to much there’s say, comfortable reason

of products. your from success our looking You’re impact can that quick looking show We much we smaller for We you footprint You’re some business. a and success, grow get we right? there. ROIs, deploy can can for on a can quick

the we a working innovation made our really long-term motions, expand that’s the to is hey, the so And sense value. Why of lot and deal, giving right? investments in do that what’s we if given comfort a wouldn’t seeing us you’re out customers, is customer to and with it a this makes success environment? spend locked do that, still proving It customer say, what current smaller into

And I…

Robbie. Go ahead,

year-over-year. start I grew across customers And is mean I as the will thing Tien to And there our I one I beyond $XXX,XXX-plus you million cohorts, about us, story go us they XX% us time. I they’ve come say then if of over the it will grew $XX with and at significantly you that, were they add grown right? think looking Zoom, the top. back mean, with said XX% it’s you Board, on and

$XXX,XXX, I’m And we land, it’s going correlation but them the today, have grow much largest the I the picked customers over right started have landing and one think, almost not to product think customer, right customers. right with the ability we every of about around we Adam, when say, is to I the time. we if those so our where maybe

them initial really And of give quick continue than can we’re for we’ve we advantage get can really And to what to where so is ability and really doing with right upsell is, that’s size then grow what something to that much now land, they the correlates our taking it. shown rather the companies value we’ll customer.

to in execution position? viewing Got us how strong need helpful. to feel it. lot plus an portfolio if really Zephr, there’s you’re opportunities after curious to the anything could else and Thanks. just inorganic And order relatively capabilities expansion go I you how given but cash like of your there’s cash? go you existing Great. on update about recognize in you a of give all fully That’s you’re then platform further thinking

a the goes position have which tend product customer a and them an that fantastic for if story is, to you from into Well, innovate, a it simple you when account to gives you sticky life, if expand. us happy, have keep continue to you

You’ve years with ago. Revenue seen us do that recognition

that only us believe subscription experience to of are shift the product. about, absolutely models. business seen with be because continued there’s new is Zephr new coming some innovations of that do expansion, and You’ve with subscriber And we do going right, the areas to you’re that

those giving don’t other sheet have the but be why this thought Some we from might that any announce categories. Lake of the to right is specific us Silver execute investment taking away is to strategic things. now, share balance We from

Zephr. well with it’s that acquisition, pleased certainly do confidence us more. year say, saw it to gives last That and going to You do us I’m

innovations time, same our very, very also At exciting. the organic are

And innovations XX Those last of organic coming so that months. XX% innovations. from over all the bookings were

this And some our subscribed event going for of event. announcements I’m do in June XXst think, few so have weeks, up a to that live save I we coming and

Craig-Hallum. Your go from of line next Bennett ahead. question Please comes the of Chad

taking Thanks questions. my Great. for

from you’ve on linearly net the the And million I a a under ARR, just guess? standpoint as the out think, some do volatility or the think, I QX off reiterated ARR ARR have a guess, year you it kind for dollar basis, would of that you’re your far I So guide to grow year. baseline how think, Todd, sequentially little throughout kind see the $X maybe from from can new of lays today, as sequentially. is I or of you April kind in that, of quarter

is companies. flows always with back ebbs enterprise as in certainly part the most it know, our of But year it. SaaS there’s Chad, a the strongest as and year few the you half of is

we So most I were accelerate say, us the of year. you the through rest in probably recent would to where the probably see surround continue and quarter

Okay.

stand today? growth year-over-year decent in good in and decent ARR the implies we kind have is growth year considering you half sight line new everybody feel the what from a that half net on of a of So And the standpoint. second you’re seeing macro, new ARR basis second into as a just seeing year-over-year of pretty you net

interaction may but we see expectation with it seeing of guide year what ARR as referred growth do customers. get we’re prudent getting expect is lot having a be the reflect to And that a given does better, the little we’ve that the with certainly growth the we’re that my on the worse. the earlier, funnel I nor is year I that believe and We and the to

from ahead. Your Andrew comes of next question Please the DeGasperi go line of Berenberg.

strong really -- you also Thanks logos. if first mentioned logos really there? you any And my in I added? the kicking on of question. then the new numbers channel were function new this just elaborate it taking these could in Is gear? really partner add a mean terms what’s you I quarter. terms Can you guess the into maybe of competitive happening of that there for wins

It’s Robbie speaking. Hi, Andrew.

something new terms a the is do have logos overall, think, really in of are land what really on it quicker see focused really, I doing. we I that we that strong where have we’re execution.

be buy well. change, prescriptive we are to strong understand and and looking what pipeline As are support looking to The so markets very from good our there that continued, source people they well. what and as partners how us the very for, partners momentum

I what here. is This is say. Tien This Yeah. would

heard our us about multiproduct strategy. You’ve talk

land do You’ve talk the we with how have heard about us Billings. capability to

the land have We capability the with with Revenue.

the have We capability with to Zephr. land

I few from one being think about expanded and of Revenue Chegg started countless that years really we talked a with of there. ago, as There’s then customers our other examples well.

go digital marketplace right, right? transformations for news great our strategy, we’re larger us saying, a But lot of of either the doing I’d the maybe skewed because and suites, because of say perhaps product our so look, last year, architecture, right, our and companies SIs, could way. there’s the is, marketplace towards we

flex love and market start you love we saying, in So with your that fact if the coming start of But standpoint, can marketplace fact the suite, we we we with you. look, budgeting justification modules an one have this is certainly the the from easily. really, and ROI grow right can a the is the really let’s with place and that to

seeing pickup maybe in to that then, your you you customers shift Are SaaS or of Tien, at a subscription a higher any models? helpful. That’s level, usage-based from seeing And all? are at

Yeah.

So full-on a usage-based usage-based was -- that company our was of we’ve one, model doing a model. additionally eventually Coremetrics be day bought first been since by customer, which to happens IBM

experience. You XX% deep out got best usage, we’ve come says coming more So institute comes might from not having that from your of no right? revenue revenues the companies sense. want research don’t really blend, make a our use We’ve got usage that subscriber of any but than

business I definitely Snowflake you would or skew because I’d say models, because if towards industry, say this is consumption-based of the companies, especially will. very industry embracing are Amazon, infrastructure of you tech specific. if usage

I you’re dollars their unbundling that, see on media more at a offerings. less right? and look about rebundling see you if of and X to They’re month. still pricing and They’re industry, going the packaging

And telecom you sector, to $X.XX not look now that. at charged used get we’re you and you look the call at doing if might a your remember, bill, we

you blended you a overage amount models, do though, gigabytes certain opt see where to these of in fees. then so you and And pay

to great module you to is, got technology so platform And in We things drawdowns. you want, that a like advanced handles prepaid like continue way the consumption advance. right? news that price we’ve allows an We any had

see to continue to really it collect technology But us the going this valuable our it more the invest in more is, You’re impacting pricing becomes. can area.

Your comes of Brent Please ahead. the next from line question Jefferies. of Thill go

portfolio on had Thank Luv of think as to impact products specifically and that Thill. developing for This it Robbie Zuora my within the the I of taking of for is you, first Todd could as you artificial products, what have Revenue? questions. the and relates you question guess on the was Tien. Brent just I internally comment Thank you briefly you. today, Tien, Sodha for Tien, intelligence you’re

years. a been strategy would Zuora relates has I part big to artificial Specifically for as say, intelligence it our of many our Revenue.

and which us with seen has AI product, a the retry lot retry Collect is card. decide use of credit to that. You’ve best configurable and that the statistics that success basically using so got logic we’re the We’ve time to for when

lost for payments our of upwards many of XX% recover to XX%, customers. able of We’re

generative multidimensional. so certainly is AI wave around exciting. the very AI new It’s And of

whether that it’s productivity We’re a looking at from or standpoint developer non-developers. obviously internally, productivity

better code, an better code interfaces We’re being looking as customer point example a customers. or the starting terms our customers, for for support, in our at documentation that sample experiences right, right right, of into

We say things being to orders natural unleash language data these have I is hey, the able to of last of really lot really and pass-through auditor the interface are a capabilities. certainly audit are or quarter like, exciting ones audit really, all which the should that

anybody great we’re I’ve on to But, available. the to let AI for Look, else and sure engineers I’m about build got it bandwagon take some as ready. obviously, that my the not call. capabilities want when we’re I now new jump really time, then announce are innovations excited the that this

guess is pipeline on quarters the Todd, ARR the do start down I Got year year-over-year you’ve you baking and on six and question net full again for the you it. quarters. when will say, then, guess, net let’s think I trough seven expanding it’s lowest given ARR question ARR you. Thank meaningfully as and new you’re one -- seen and ARR or net new coverage, what got, in, net follow-up your a expectations based And guide? into was that

that in Well, continue to we see it’s through year. go are the will we that the absolutely gave as what we we acceleration guide baking

we’re I no think anybody it’s -- different than been else.

were We’re the what’s in first year, the that half we slower not immune from had happening guidance year. of macro. as we And would be we for this the in where set the the it expectation

I think were we we right came said we to in where going do.

ARR the In same fact, of we the the end holding to the guidance, range. guidance, DBRR the go lower you rest and raised on of Revenue we’re if the

profit we the the brought minimum operating operating X%, improvement. also of thing And say last so up profit is the another XXX-basis-point I’d to a non-GAAP or

the as throughout expect of do macro. else than acceleration certainly we move But, again, we’re impact different year. the the we no anybody So with

Jacob the ahead. next of line Street Markets. Please of Your comes question Capital Instructions] Lake from [Operator go Stephan

guys. taking for Hey, my Thanks questions.

that could maybe some Just, margin of seeing. touch gross Todd, you levers on are if you the

of you’re in infrastructure about investments making? kind the talk the that Just

Thanks a Jacob. lot,

as has So our heavier benefit. mix so The a time. business, of we been a bit certainly and on is margin, we spent quite that subscription the a the overall mix by impacted of gross have obviously, business

though, to strengthen. particular, with has continued the business, In that subscription

making a from have dual which that’s us we of and certainly hyperscaler only is strategy, something lot -- now time helping not sure efficiency a spending of maximizing benefit a the our we’re perspective. We’re hyperscalers pricing

We’re operations. time also we spending such automate on as do and technical how support items

of help all we’ll those on so time, gross areas And an to subscription and focus us, that over drive higher continue that even will are margin.

to breakeven. negative hearing? going Okay. longer term, still you kind on services like I’m you’re guess, business that Maybe gross professional the the it implies would grow And team. but then operate Is slightly, this at what just side, of well, that margins, I have sounds higher near-term expect that you to maybe

or profitable. or our quarter we to this like But help the at have some growth. breakeven next investors we’d run term, opportunities business over have so Longer probably that Absolutely. overall customers accelerate slightly to and

guide the trade-off fits profitability. to make that with that the we’ve certainly and willing I’m today so in given And that within increase

questioner. one for time have more We

and We last next have Mattiacci Nick your question the is line of ahead. from Please of Craig-Hallum. go

the for guys. taking Thanks Hi, question.

are of there, about I’m And you think may you about that you competitive mix So about can environment seeing macro replacing? to replacing other, lending the are have the new able say? additions replace is being so one type if you trying you the talk solutions? and the and more solutions as how solutions logo than between think homegrown to the to current think we the guys versus changed momentum

Yeah. or market say replacing between a I shift commercial is there system. homegrown a customer system behavior in wouldn’t a

is, business the your to in you towards point reality the to when us. your in more higher business look, new going that’s cycle doing going system and just you’re the hitting whatever not probability industry more dynamic if using think need more a on system right, I the is, come that is the where, these a is, your what and just shift competitive cut models, you your not is industry industry your to is it is do

that. And do seeing need again, the regardless point do, need to when your tends we’re you get what strategy, you be And you strategy, and to that what of to right? environment, that so macroeconomic your because is still

with be in our the sense could I marketplace. smaller could in we Billing, in have you’re the our to seeing one it think is right, these then continues And if relevant the ability logos payments. what be two, could of look, it and -- be Revenue modules it to be recognition, one, land makes product new heck

companies anything bottomline, there got as eager to Billing there yet, can system we right the We’ve problem we’ve well. not to our start got payments saying, just a replace we’re solved we goes now and but are gigantic look,

And so customer investments I the be drive growth and that think on I feel success really this good made in about our focus to that to position to technology able continue marketplace. and we’ve made we’ve the

color and I really to that a Zephr. add the new look that at if last added piece balance I logos Tien would we Nick, good take the quarter, is, of Revenue between Billing, last

Got it.

all products So customers. resonating with those are

Awesome.

at remarks. questions for this time. sir. I the like back further turn no call are to concluding CEO go now of Please would There to Zuora Tien Tzuo, ahead,

June New everyone, to to to in and the Thank City you, Subscribe Live hope very join online. us York joining thank XXst do for today. And I forward having last us look Well, plug, you on you much. as

This concludes today’s call. conference

disconnect. may You now