Zuora (ZUO) Reports Q2: Everything You Need To Know Ahead Of Earnings

Jabin Bastian /
2022/08/23 4:19 am EDT
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Subscription management platform Zuora (NYSE:ZUO) will be reporting earnings tomorrow afternoon. Here's what to expect.

Last quarter Zuora reported revenues of $93.1 million, up 16% year on year, in line with analyst expectations. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and decelerating growth in large customers. The company lost 1 enterprise customer paying more than $100,000 annually and ended up with a total of 746.

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 12.7% year on year to $97.5 million, slowing down from the 15.3% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.05 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 2.59%.

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 what we can expect. Marqeta delivered top-line growth of 52.6% year on year, beating analyst estimates by 3.62% and Flywire reported revenues up 52.9% year on year, exceeding estimates by 18.7%. Marqeta traded down 2.08% on the results, Flywire was flat on the results. Read our full analysis of Marqeta's results here and Flywire's results here.

There has been positive sentiment among investors in the software segment, with the stocks up on average 4.62% over the last month. Zuora is up 3.45% during the same time, and is heading into the earnings with analyst price target of $20.3, compared to share price of $8.99.

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.