Zuora to cut 8% of jobs

 (source) Zuora announced a plan to cut 8% of jobs:

Zuora, Inc. (Zuora) announced a workforce reduction plan today resulting in a net reduction of 8% of our workforce that is designed to better align the organization with the company’s current business priorities and enable further investment in key areas, along with strengthening our commitment to profitable growth. Zuora also announced its preliminary expectations that, for its fourth quarter and fiscal year ended January 31, 2024, subscription revenue, total revenue, non-GAAP income from operations, and adjusted free cash flow are expected to be consistent with previous guidance as reported in the “Financial Outlook” section of its earnings press release for the third fiscal quarter of 2024 as furnished in its Current Report on Form 8-K on November 29, 2023. For the period ended January 31, 2024, we currently anticipate Annual Recurring Revenue (ARR) growth of approximately 10-10.5% year-over-year, and dollar-based retention rate (DBRR) will be approximately 106%.

These preliminary expectations are based on information available to Zuora as of the date of this Current Report on Form 8-K (this “Form 8-K”) and are subject to the completion of Zuora’s year-end financial closing procedures and audit by Zuora’s independent registered public accounting firm. Zuora expects to release its final fourth quarter and fiscal 2024 financial results in more detail and host a conference call in conjunction with the quarterly earnings release in the coming weeks.

Explanation of key financial metrics:

Annual Recurring Revenue (ARR). ARR represents the annualized recurring value at the time of initial booking or contract modification for all active subscription contracts at the end of a reporting period. ARR excludes the value of non-recurring revenue such as professional services revenue as well as contracts with new customers with a term of less than one year. ARR should be viewed independently of revenue and deferred revenue, and is not intended to be a substitute for, or combined with, any of these items. ARR growth is calculated by dividing the ARR as of a period end by the ARR for the corresponding period end of the prior fiscal year.

Dollar-based Retention Rate (DBRR). We calculate DBRR as of a period end by starting with the sum of the annual contract value (ACV) from all customers as of twelve months prior to such period end, or prior period ACV. We then calculate the sum of the ACV from these same customers as of the current period end, or current period ACV. Current period ACV includes any upsells and also reflects contraction or attrition over the trailing twelve months but excludes revenue from new customers added in the current period. We then divide the current period ACV by the prior period ACV to arrive at our dollar-based retention rate.

Annual Contract Value (ACV). We define ACV as the subscription revenue we would contractually expect to recognize from a customer over the next twelve months, assuming no increases or reductions in their subscriptions. We define the number of customers at the end of any particular period as the number of parties or organizations that have entered into a distinct subscription contract with us and for which the term has not ended. Each party with whom we have entered into a distinct subscription contract is considered a unique customer, and in some cases, there may be more than one customer within a single organization.