Zuora Inc

Good afternoon and welcome to Zoar's first quarter of fiscal 2022 earnings conference call. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star and the number one on your telephone keypad. If you would like to withdraw the question, press the pound key. With that, I would like to turn the call over to Luana Wolk, head of investor relations, for introductory remarks.

Thank you. Good afternoon and welcome to Zora's First Quarter Fiscal 2022 Earnings Conference Call. Joining me today are Team Zoe, Zora's Founder and Chief Executive Officer, and Todd McAhelton, Zora's Chief Financial Officer. We will also have Robbie Trauber, our Chief Revenue Officer, joining the Q&A session today. The purpose of today's call is for us to review our first quarter results as well as provide our financial outlook for the upcoming second quarter and fiscal 2022 year. Some of our discussion and responses today will include forward-looking statements. So as a reminder, our actual results could differ materially as a result of several factors. You can find information regarding those factors in the earnings release we issued today and our most recent filings with the SEC. And lastly, we'll be referring to several non-GAAP financial measures today, and reconciliations to related GAAP measures are included in our earnings release. For a copy of our earnings release, links to the SEC filings, a replay of today's call, or to learn more about Zora, please visit our investor relations website at investor.zora.com. And with that, let me turn it over to Tim.

Thank you, Luana, and thank you everyone for joining us today on Zora's first quarter earnings call for fiscal 2022. Overall, we get a strong start to the new fiscal year. We exceeded our guidance across our operating metrics, including total revenue, subscription revenue, non-GAAP gross margin, non-GAAP operating income, and we also posted another quarter of positive free cash flow. Our execution is also improving. Our pipeline grew significantly, highlighting the strength of our market. System integration partners were involved in two-thirds of our Q1 new business deals, showing the strength of our partner strategy. And we had a strong upsell quarter, which helped us reach 103 net dollar retention, up three points from the 100% we posted last quarter. I'd like to give a huge thanks to our CEOs for their focus and dedication in Q1. They are the reason we delivered this quarter. Today, we also announced the purchase of intellectual property assets from Live Objects, a company that specializes in AI-driven process optimization. I'll discuss later what this means, but let me first give some color on the quarter. Now, I know many of you attended our recent 2021 Investor Day just last month, So I'll keep my comments today brief. For those of you who didn't get a chance to attend, I encourage you to watch the recording at investor.zora.com. The headline for Q1 is, we executed well on the corporate strategy that we laid out at our Investor Day. At Investor Day, we talked about how we now consider ourselves a multi-product company, giving us multiple vectors for growth. With our four current products anchored on our central platform, we have the ability to upsell and cross-sell to our install base while signing on new customers. At Q1, this strategy worked. We continued to land new logos in our new verticals. In manufacturing, new wins included auto manufacturers Suzuki, In publishing, we welcomed the Mainichi newspapers. In technology, we added companies like Gainsight, now part of the Vista Equity Group. In Q1, we continue to make great progress upselling our existing products. For example, the central sandbox, a key capability, really helped drive platform upsells. It's actually our fastest solution to reach a million dollars in sales, and we doubled that in Q1. In Q1, we continue to make great progress cross-selling new products. For example, the world's largest data center infrastructure provider is a Zora billing customer. And in Q1, they added Zora Revenue to automate the entire order to revenue recognition process. We're also seeing early cross-sell traction with Zora Collect AI, our intelligent payment retry module following its March launch. In short, Our land and expand go-to-market strategy is paying off. We're seeing new products and capabilities becoming a greater proportion of the overall AATBB book in a quarter. We saw triple-digit growth in install-based bookings year over year. And as mentioned, net dollar retention kicked up from 100% last quarter to 103% in Q1. As we said in Investor Day, we believe that our install-based opportunity alone is a $250 million-plus ARR opportunity, and we are laser-focused on capturing this. And in Investor Day, we also talked about the importance of our Zora Central platform. It is the anchor helping us transform from a two-product company, billing plus revenue, to a complete subscription experience cloud that manages our customers' end-to-end subscriber experiences. The central platform provides customers with meaningful insights. It supports and automates end-to-end business processes, and it offers the agility and scalability that is required to succeed in the subscription economy. And in Q1, adoption of our platform continued to grow, making it even more sticky as it becomes central to all subscription business processes for our customers. Over half our customers are automating and simplifying their IT processes with our platform workflows. We processed over 8 million invoices on the peak day this quarter atop our platform. And last quarter, approximately half a billion workload tasks were executed, saving our customers time, and money in this this is where the acquisition of live objects intellectual property assets come in at our investor day we said we'd be opportunistic and looking at tuck-in acquisitions as a tool to accelerate our innovation and roadmap i am super super excited about this technology and how it will help us accelerate this central platform roadmap with the live objects team have built is an AI-driven process engine that we believe will allow our customers in the central platform to visualize the processes that are behind the awesome subscriber experiences that they are designing, to discover and map new hidden processes, including the ones that span multiple systems like CRM, ERP, or other fulfillment and provision systems. And it will allow them to detect anomalies in these processes that may lead to customer dissatisfaction or inefficiencies. We all know that customer expectations continue to rise. Call it the Amazon or Instacart effect. And those companies that offer the best subscriber experiences are the ones who will win. The central platform, including the new capability that the live objects acquisition gives us, is what enables our customers to deliver those differentiated subscriber experiences. At Investor Day, we also laid out our enterprise alliances strategy as part of our growth upmarket. And in Q1, we saw positive results of this strategy. Partner prime deals were up, including our first partner prime deal in Japan with Suzuki. partner-influenced bookings were up 70% year-over-year and represented approximately two-thirds of our new bookings in Q1. We also saw triple-digit year-over-year growth in new partner-driven pipeline and a considerable increase in Zora-certified consultants quarter-over-quarter, a great, great illustration of our partners' commitment to Zora's industry-leading solutions. The big one from the quarter was a billion-dollar audio-visual technology company. Not only was one of the big four global SIs involved in the deal with Zuora, the win also highlights our multi-product strategy at work. The company chose billing, collect, and essential platform to enable its multi-channel audio licensing business. In short, working with our global systems integrated partners gives us more scale and helps to accelerate our growth. And finally, at Investor Day, we explain why companies are not coming to us just for our technology, but also for our unique expertise on all things subscriptions. We've translated our 13 years of experience into a proprietary blueprint that we call the journey to usership. This blueprint is what we use to accelerate our customers on the path to building successful subscription businesses. And we gave you some examples of this during Investor Day. But let me give you three others from Q1. In Q1, a global CPG company partnered with our subscribed strategy group to completely revamp their company's subscription offering, including its overall subscriber experience. We also had a consumer robotics company partnering with SSG to educate their executives on the implications of recurring revenue on their financial metrics. And finally, you know, we work with eight of the top 10 automobile manufacturers. One of the actually first teams has worked for our expertise to optimize their telematics business in Europe. And based on that success, they are now leaning on our knowledge of agile enterprise architectures to help them build a modern platform that can launch new offerings into the market faster than ever before. In Q1, our subscribed strategy group engaged with over 20 companies, but also partnering with firms like the Boston Consulting Group to publish original research based on this data. And so in summary, we had a solid start to the year. The strategy we laid out at last month's investor day is delivering results. We continue to see our multi-product sales motion. Our SI and license partnership continues to deliver, and our unique expertise continues to differentiate us with our customers. With our clear strategy and focus, we are well positioned to continue capturing the opportunity of the subscription economy. Now, I'll turn the call over to Todd to review our financials.