Shares in Zuora have risen following the announcement of its Q3 financial results, with stock up 6 percent in after-hours trading. The company surpassed Wall Street’s expectations, reporting $77.2m total revenue, an increase of 8 percent year on year, and a subscription revenue of $62m, up 15 percent year on year.
Customers with annual contract value equal to or greater than $100,000 was 653, which represents 11 percent year on year growth. In addition, Zuora’s billings platform saw $14.6bn in total transaction volume, up 31 percent.
Having reported a negative free cash flow of $5.1m this time last year, Zuora was expecting to achieve breakeven free cash flow by the end of the fourth quarter. The company’s Q3 results show it has reached that target three months early.
Tien Tzuo, founder and CEO of Zuora, said: “In the third quarter, we exceeded expectations across our key financial metrics, including subscription revenue, income, and meeting our free cash flow target one quarter early. Our enterprise go-to-market initiatives are gaining traction, helping us land the largest deal in the company’s history. The demand for subscription business models remains strong and we have strengthened the foundation for Zuora to continue to lead the market.”