Why Shares of Zuora Are Surging Today

What happened

Shares of Zuora (NYSE: ZUO) rose on Thursday after the subscription software company reported its second-quarter results. Zuora beat analyst estimates on all fronts, and raised its guidance for the full year. The stock was up about 9.2% at 11:10 a.m. EDT.

So what

Zuora reported second-quarter revenue of $69.7 million, up 21% year over year and nearly $3 million higher than the average analyst estimate. Revenue from subscriptions went up 24% to $50.6 million, while revenue from professional services jumped 12.5% to $19.1 million. A blue stock chart with an orange line in a zigzag pattern.

Image source: Getty Images.

The total transaction volume run through Zuora's platform was up 35% year over year to $10.1 billion, while the number of customers with annual contract value greater than $100,000 grew 19% to 566. Zuora's dollar-based retention rate, which measures revenue expansion among existing customers, was 107%.

Non-GAAP (adjusted) earnings per share came in at a loss of $0.09, up from a loss of $0.12 in the prior-year period and $0.05 better than analysts were expecting. The company lost $0.19 on a GAAP basis, worse than an $0.18 loss in the second quarter of last year.

"We made progress with operational execution, product innovation and launched our Zuora Central Platform, all focused on delivering durable, long-term growth," said CEO Tien Tzuo in the earnings release.

Now what

Zuora expects third-quarter revenue between $69 million and $71 million, along with a non-GAAP EPS loss between $0.10 and $0.19. For the full year, the company expects revenue between $273.5 million and $278.0 million and a non-GAAP EPS loss between $0.38 and $0.40.

Previously, Zuora had guided for full-year revenue between $268 million and $278 million and a non-GAAP EPS loss between $0.40 and $0.44.

With Zuora beating expectations and raising its guidance for the year, the stock was trending higher Thursday morning.

10 stocks we like better than Zuora
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Zuora wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of June 1, 2019


Timothy Green has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Zuora. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More