Zuora Inc. Reports Q3 Earnings Amid Acquisition

Zuora Inc ( (ZUO) ) has released its Q3 earnings. Here is a breakdown of the information Zuora Inc presented to its investors.

Zuora Inc., a company specializing in monetization solutions through subscription services, operates within the technology sector and is renowned for its flexible software platform that aids companies in evolving their monetization strategies. In its third quarter of fiscal 2025 earnings report, Zuora reported a total revenue of $116.9 million, reflecting a 6% year-over-year increase, with subscription revenue contributing $105.3 million. However, the company faced a GAAP net loss of $32.2 million, partly due to acquisition-related expenses and a debt redemption liability linked to its proposed acquisition by Silver Lake and GIC.

Despite the GAAP losses, Zuora demonstrated robust performance in non-GAAP metrics with a net income of $24.8 million, up from $12.3 million the previous year, and a non-GAAP income from operations of $25.1 million, a significant increase from $16.0 million year-over-year. The company also reported a positive net cash flow from operations of $22.4 million, a notable improvement from the previous year’s negative cash flow.

Strategically, Zuora is undergoing a significant transition with the announcement of its acquisition by Silver Lake and GIC for $1.7 billion. This transaction, expected to close in the first quarter of 2024, will result in Zuora becoming a privately held company. This move is accompanied by a slight decrease in high-value customers, with those having an annual contract value of $250,000 or more dropping from 453 to 451.

Looking ahead, Zuora has withdrawn its previous financial guidance owing to the proposed acquisition. While the acquisition presents an opportunity for strategic realignment and growth, the company remains focused on maintaining its strong market position and leveraging its monetization platform to drive future success.