The following is a summary of the Zuora, Inc. (ZUO) Q1 2025 Earnings Call Transcript:

Financial Performance:

• Zuora reported a Q1 subscription revenue of $99 million, marking a 10% increase year-over-year.

• Non-GAAP operating income exceeded guidance at $18.6 million, representing a 17% operating margin.

• Adjusted free cash flow for the quarter was significantly high at $31.4 million.

• The company is on track to exit the fiscal at Rule of 40 framework, a significant jump from the previous year's level 26.

• ACV growth for customers over $250,000 per year increased by more than 10% this quarter.

• Despite the challenging market conditions, an ARR growth of 8% to 10% is expected by the end of the year.

Business Progress:

• Zuora made significant progress in expanding their customer base, fueled by increasing customer satisfaction levels.

• The company saw a noticeable increase in cross-selling, with customers adding other Zuora products or adopting their technology in new business units.

• The acquisition of 'Togai', a leading metering and rating solution, expanded the company's offerings beyond just billing to a complete monetization software stack for diverse business models.

• Zuora continues to pivot towards more digital and inbound techniques for pipeline generation.

• Emphasis is placed on retaining high-quality customers and enhancing expansion within the existing customer base.

• There is significant pipeline growth due to efficient lead generation strategies, including the use of digital technologies and AI tools.

More details: Zuora IR

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