Zuora Inc. topped expectations with its latest quarterly results but gave a lower-than-expected outlook for the current period, while disclosing that it plans to lay off about 11% of its staff.
The subscription-software company reported a fiscal third-quarter net loss of $37.0 million, or 28 cents a share, compared with a loss of $22.9 million, or 18 cents a share, in the year-earlier period. On an adjusted basis, Zuora
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lost 2 cents a share, flat with the company’s performance from a year earlier but better than the FactSet consensus, which called for a 6-cent adjusted loss per share, based on two estimates.
Total revenue rose to $101.1 million from $89.2 million, while analysts were projecting $100.1 million, based on three estimates. Zuora reported $86.6 million in subscription revenue, up from $73.8 million a year prior, whereas the FactSet consensus was for $85.7 million.
“We delivered third-quarter results at the high end of guidance as companies across industries continue to lean into recurring revenue models,” Chief Executive Tien Tzuo said in a release. “At the same time we’re making adjustments to our business to deliver meaningful profitability improvement in fiscal 2024.”
The company intends to lay off about 11% of employees due to the “macroeconomic dynamic,” Chief Financial Officer Todd McElhatton added in the release.
For the fiscal fourth quarter, Zuora executives anticipate $99.5 million to $101.5 million in total revenue along with an adjusted loss per share of 6 cents to 7 cents. Analysts were expecting $102.8 million in total revenue and a 3-cent adjusted loss per share.
For fiscal 2024, Zuora executives currently model 11% to 14% in subscription revenue growth “with the low end of the subscription revenue growth range reflecting expectations if current macroeconomic conditions worsen.”
