Zuora (ZUO) Reports Earnings Tomorrow. What To Expect

Max Juang /
2023/08/22 8:03 am EDT

Subscription management platform Zuora (NYSE:ZUO) will be reporting earnings tomorrow after the bell. Here's what to expect.

Last quarter Zuora reported revenues of $103.1 million, up 10.6% year on year, in line with analyst expectations. It was a strong quarter for the company, with accelerating growth in large customers. In addition, the company provided favorable guidance for the next quarter, surpassing consensus estimates for revenue. The company added nine enterprise customers paying more than $100,000 annually to a total of 782.

Is Zuora buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Zuora's revenue to grow 10.2% year on year to $108.8 million, slowing down from the 14.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.04 per share.

Zuora Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 1.75%.

Looking at Zuora's peers in the finance and hr software segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Marqeta delivered top-line growth of 23.8% year on year, beating analyst estimates by 5.13%, and Flywire reported revenues up 50.1% year on year, exceeding estimates by 17.2%. Marqeta traded up 5.8% on the results, Flywire was up 6.12%.

Read our full analysis of Marqeta's results here and Flywire's results here.

Technology stocks have been hit hard by fears of higher interest rates and while some of software stocks have fared somewhat better, they have not been spared, with share price declining 6.43% over the last month. Zuora is down 1.84% during the same time, and is heading into the earnings with analysts' average price target of $12.9, compared to share price of $10.14.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.