Company’s strong growth and momentum demonstrates the accelerating shift to the Subscription Economy

May 12, 2010 — Company News

• Zuora, the company that defined and continues to lead the subscription billing industry, reported today that it has signed over $1 Billion in contracted subscription revenue in the first quarter of its new fiscal year, which ended April 30th.
• The $1 Billion in contracted subscription revenue is of particular note in light of Gartner’s estimate that SaaS billing industry-wide would reach $7.5 billion in 2009, demonstrating Zuora’s commanding share of this booming market.
• The $1 Billion in contracted subscription revenue drove more than 100% quarter-over-quarter growth for the company across all dimensions: revenue, bookings, and cash flow. This is on top of the 400% year-over-year growth the company experienced in its previous fiscal year.
• This is more evidence that the world is shifting to the Subscription Economy. Customers today are leading a revolution that demands more products and services via the cloud, including: SaaS applications, computing power and storage, telecom services, online services, digital media and content, textbooks, and much more. Enterprises are scrambling to accommodate this shift, which requires a new infrastructure to manage large transaction volumes with variable, fragmented, and usage based pricing structures.
• Zuora automates pricing schemes of virtually unlimited complexity while providing complete, dynamic visibility into the impact of pricing on revenue, replacing ERP solutions built for the offline world with systems and models architected explicitly for the cloud economy.

Q1 2011 Results

• Zuora also reported strong financial performance in Q1 2011, ending April 30 2010, highlighting a growth trajectory that rivals the best SaaS companies in the industry.
• Zuora’s financial performance for Q1 2011 included:
  • 181% quarter-over-quarter growth in annualized bookings over Q4 2010
  • 102% growth in revenue
  • 127% growth in organic cash flow
  • Cash flow positive operations during the quarter
• Zuora’s growth in Q1 came across all segments, highlighting that the shift to the Subscription Economy is happening across all industries. Key customer wins include:
  • SaaS: Rearden Commerce, Xactly, Concur Breeze
  • Online Media: Pandora Media
  • Cloud: IC&S, a leading cloud vendor based in Amsterdam, and Stantive, a developer of native Force.com applications
  • Telecom: Open Range Communications
  • Open Source: Varien, the makers of the Magento eCommerce platform
  • Online Video: HDCloud
• Zuora’s Q1 growth comes on the heels of a strong fiscal 2010:
  • 245% year-over-year growth in revenue
  • 298% year-over-year growth in bookings
  • 393% year-over-year growth in organic cash flow

Zuora Commentary

• Said Michael Feinberg, Senior Vice President of EMC’s Cloud Infrastructure Group: “As a Zuora customer for a full year — during which time we’ve processed more than nine million transactions with them — EMC has seen firsthand the transformative impact of the company’s vision on our own business and on the industry as a whole. We saw a major disruption happening last year with the move to subscription billing, and Zuora gave us a way to capitalize fully on this opportunity and keep our business at the leading edge of the new Cloud economy. We’re big believers in Zuora and look forward to continued success together.”
• “We came out in 2008 and evangelized our vision that the world is moving to a Subscription Economy,” said Zuora co-founder and CEO Tien Tzuo. “At a time when no one thought of subscription billing as an industry, we recognized that the world was moving to a subscription model, from online consumer services to the new breed of Cloud businesses. Our strong first quarter results, indicated by the $1 Billion of subscription revenue we have contracted, demonstrate that this shift to the Subscription Economy is happening today.”

About Zuora, Inc.

Zuora’s subscription billing and commerce platform changes the way subscription businesses manage and sell to customers, allowing them to bring new products to market in less time, with more flexibility and less hassle. Zuora customers are up and running within 30 to 90 days and often recognize 200% ROI within weeks. Zuora is built from the ground up by SaaS industry visionaries and veterans from salesforce.com, WebEx, Accenture, Google, eBay, Oracle and Vitria. Zuora customers include Reed Business Information, Coremetrics, InsideView, Marketo, Ricoh, Box.net, Xactly, HD Cloud, Cloud Central and Sun Microsystems. To learn more about Zuora, please visit www.zuora.com.

In the past year, Zuora has achieved compliance with the most widely recognized and demanding standards for IT controls and security including SAS70 Type II and PCI Data Security Standard (DSS). Zuora has maintained exceptional performance for its customers with 99.99 percent uptime throughout 2009 and continuing in Q1 2010. And Zuora has received wide industry recognition including being named to the AlwaysOn OnDemand Top 100, a SIIA CODiE Award Finalist in Best Software-as-a-Service, and a TiE50 Top Startup Finalist.

To learn more about Zuora, please visit www.zuora.com.