Zuora (ZUO) Q3 Earnings: What To Expect
Subscription management platform Zuora (NYSE:ZUO) will be reporting earnings tomorrow after the bell. Here's what you need to know.
Last quarter Zuora reported revenues of $108 million, up 9.4% year on year, missing analyst expectations by 0.7%. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and underwhelming revenue guidance for the next quarter. However, investors should note that this drop stems from lower-than-expected professional services revenue, which is lower margin than the company's subscription revenue. Thus, Zuora still raised its adjusted operating income and EPS guidance.
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 7.5% year on year to $108.7 million, slowing down from the 13.3% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.06 per share.
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 only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 1.2%.
Looking at Zuora's peers in the finance and HR software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Flywire delivered top-line growth of 29.5% year on year, beating analyst estimates by 2.9% and Marqeta reported revenue decline of 43.2% year on year, exceeding estimates by 14.1%. Flywire traded down 14.4% on the results, Marqeta was flat on the results.
Read our full analysis of Flywire's results here and Marqeta's results here.
There has been positive sentiment among investors in the finance and HR software segment, with the stocks up on average 11.9% over the last month. Zuora is up 12.9% during the same time, and is heading into the earnings with analyst price target of $13, compared to share price of $8.2.
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The author has no position in any of the stocks mentioned.
