Zuora — Investor Day (April 2021)
93 slides from Zuora's investor day presentation, Apr 12, 2021
Slide 1: Investor Day April 12, 2021
Investor Day April 12, 2021 Exhibit 99.2
Slide 2: Forward-looking statements
Statements in this presentation and the accompanying oral presentation include “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by the use of words such as "anticipate," "expect," "intend," "go
Slide 3: Zuora Investor Day 2021 - Agenda
Time (PT) Subject Presenters 10:00am PT What is Our Market Opportunity? Tien Tzuo, Chief Executive Officer of Zuora 10:14am PT Customer Interview: Jug Bath, CTO, Chegg Learning Services Moderator: Tien Tzuo, CEO of Zuora 10:26am PT Product: A Platform to Deliver Enterprise Subscription Experiences S
Slide 4: The Opportunity
The Opportunity Tien Tzuo, Founder & Ceo
Slide 5: Our Vision: The World. Subscribed.
8 OF TOP 10 AUTO MANUFACTURERS powered by Zuora 21 MAJOR NEWSPAPER PUBLISHING GROUPS powered by Zuora 600+ INNOVATORS IN HIGH TECH powered by Zuora 26 OF FORTUNE 100 powered by Zuora OUR VISION: The World. Subscribed. OUR MISSION: To help the world’s best companies win in the subscription economy.
Slide 6: We Lost Momentum as We Scaled
We Lost Momentum as We Scaled Over the past 2 years, we’ve made the investments we need in technology and GTM to accelerate growth. Growth Trajectory NOTE: Directional visual representation, not a quantitative forecast.6 We Are Here Scale Challenges: ● Zuora Revenue Integration into Zuora Billing ●
Slide 7: Today You'll Hear from the Team Driving Our Evolution
Today You’ll Hear from the Team Driving Our Evolution Robbie Traube Chief Revenue Officer Joined November 2019 Sri Srinivasan Chief Product & Engineering Officer Joined January 2021 Todd Mcelhatton Chief Financial Officer Joined June 2020 7
Slide 8: The World's Economic Value Has Shifted from Ownership to Usership
Source: The Harris Report, “The End of Ownership Report”, 2021. https://www.zuora.com/resource/the-end-of-ownership/ 8 Is a person’s status no longer defined by what they own? 65% U.S. 68% France 69% U.K. 65% Netherlands 58% Germany 65% Spain 68% Italy 75% China 77% Singapore 72% Japan 67% Australia
Slide 9: Usership Has Created the Subscription Economy
Technology Usership Has Created the Subscription Economy Transformation impacting every industry. Software as a service Mobility as a service Patient outcomes Subscribers Finance as a service “Pay as you throw” Automobile Medical Media Hardware Car ownership Health care Ad sold Financial Insurance G
Slide 10: Subscriptions Will Inevitably Become the Dominant Business Model
Subscriptions Will Inevitably Become the Dominant Business Model 10 1By 2023, IDC estimates that products and services from digitally determined organizations will make up over 50% of the global GDP. Source: IDC report titled IDC FutureScape: Worldwide Monetization 2021 Predictions, Mark Thomason, O
Slide 11: Incumbents Are Now Moving with Disruptors
Incumbents Are Now Moving with Disruptors 100 year old companies began to finally embrace subscription models. Incumbents 11 Disruptors
Slide 12: 2020: The Year that Caused the Herd to Break
2020: The Year that Caused the Herd to Break This is the "now or never" moment for incumbents to avoid irrelevance. “While S&P 500 sales in Q1 2020 contracted at a -1.9% annual rate, subscription-based revenue continued to thrive, growing at 9.5% in the same quarter”* *Source: Subscription Economy I
Slide 13: 2020: The Best Companies Were Prepared
2020: The Best Companies Were Prepared Zoom launches free offerings, including for K-12 and grows users by 30X Resy provides billing relief for restaurants Fender extends free trials to 1 million customers 13 *Source: Zoom growth between Dec 19 and April 2020 https://blog.zoom.us/how-to-use-zoom-for
Slide 14: They're Transforming the Nature of Their Business Models
They’re Transforming the Nature of Their Business Models Product-Centric Business Model Customer-Centric Business Model Channels Experience Service Subscriber Customer Product Channels One-time product purchase Products as-a-service Revenue tied to product sales Revenue tied to customer usage Growth
Slide 15: Building the Dominant Subscriber Experience for Every Industry
Building the Dominant Subscriber Experience for Every Industry Re-imagine the Healthcare Experience 15 Re-imagine the Financial Services Experience Re-imagine the Transportation Experience
Slide 16: Our Opportunity Is to Help the World's Best Companies Win
16 Our Opportunity Is to Help the World’s Best Companies Win in the Subscription Economy 8 OF TOP 10 AUTO MANUFACTURERS powered by Zuora 21 MAJOR NEWSPAPER PUBLISHING GROUPS powered by Zuora 600+ INNOVATORS IN HIGH TECH powered by Zuora 26 OF FORTUNE 100 powered by Zuora
Slide 17: Up for Grabs: A $5B Market Today, Growing at 25-30% YOY
Zuora 5% $9.1 $5.0 $3.0 CY2022E***CY2020ACY2018A 32% CAGR 17 *Reflects TAM for Zuora Billing and Zuora Revenue based on MGI's report "Agile Monetization Platform (AMP) 2018-2022" published December 2018. **CY2020 TAM breakdown is derived from MGI estimates and Zuora’s TAM model. ***Forecasts are Zuo
Slide 18: Subscription Economy Evolution and Zuora Evolution
Evolution in Company Mix Disruptors and now enterprise incumbents, racing to stay relevant and re-invent themselves for the next 100 years Evolution in Technology Needs Solutions to help transform business models, and to deliver holistic, differentiated experiences to customers over time Evolution i
Slide 19: Forrester Wave and IDC MarketScape Recognition
The Forrester Wave: SaaS Billing Solutions, Q4 2019 The Forrester Wave™ is copyrighted by Forrester Research, Inc. Forrester and Forrester Wave are trademarks of Forrester Research, Inc. The Forrester Wave is a graphical representation of Forrester's call on a market and is plotted using a detailed
Slide 20: These Experiences Span the Full Customer Lifecycle
These Experiences Span the Full Customer Lifecycle Example Customer 1.0 Subscriber Journey (outside-in view) Example Customer 1.0 Delivery System (inside-out view) Discovers Registers Accesses Uses/Adjusts Troubleshoots Renews ExpandsExplores Bills CollectsRates Closes ReportsRecognizePromotes Onboa
Slide 21: Platform to Deliver Differentiated Customer Experiences
Now, We’ve Built the Platform to Deliver these Differentiated Customer Experiences Organizes the data, orchestrates the complexity, and delivers the agility required for modern subscriber experiences. ZUORA SUBSCRIPTION EXPERIENCE CLOUD 21
Slide 22: Our Platform Strategy Supports Beachhead Applications
Our Platform Strategy Supports 3 Beachhead Applications to Start Unlocking New Growth Vectors Zuora Billing Zuora Revenue Zuora Collect Strong differentiation accelerating cross-sell ROI that sells itself one-click deployment Hands-down leader unlocking TAM expansion 22
Slide 23: They're Looking for Help to Solve Higher Order Problems
They’re Looking for Help to Solve These Higher Order Problems Offering Design Subscriber Experience Enterprise Architecture Financial Model How do you design, price, and package your subscription offerings to optimize for sustainable growth? How do you create a frictionless subscription experience t
Slide 24: Blueprint and Team to Guide Their Journey
24 Today We Have the Blueprint and Team to Guide their Journey Launch Optimize LeadScale R e cu rr in g R e ve n u e G ro w th Leading the market with platform, data, and ecosystem Scaling up the business with automation Optimizing to add subscribers and drive growth Launching a brand new subscripti
Slide 25: Our Data Helps Us Guide Customers
The “S” Curve (Cumulative Free-to-Fee Conversion Rate) Days After Customer Sign-up C u m u la tiv e C o n ve rs at io n R at e Can [CUSTOMER] push the “S” curve UP AND LEFT? Source: Zuora SSG and Close Research, 2019 Benchmark “S” Curve (10 SaaS Companies) [CUSTOMER] Connected Services “S” Curve (10
Slide 26: We Needed to Evolve Our GTM
HIGH TECH We Needed to Evolve Our GTM to Align with the Market and the Product FocusGTM Organization Alliances HIGH TECH MANUFACTURING Focused our GTM on the the right segments to drive repeatability and efficiency Built an alliances motion to accelerate growth and provide services scale Re-designed
Slide 27: Financial Model Designed to Drive Long-Term Sustainable Growth
We Have a Financial Model that Is Designed to Drive Long-Term, Sustainable Growth 27 Product Investments Paying Off New growth vectors, sustained differentiation and stickiness via platform GTM Investments Paying Off Growth in enterprise pipeline, higher win rates, and a clear path to ARR growth Sig
Slide 28: Customer Interview: Jug Bath, CTO of Chegg
Jug Bath CTO of Chegg Customer Interview
Slide 29: The Product
The Product Sri Srinivasan, Chief Product & Engineering Officer
Slide 30: The Core Tenets of Our Product Strategy
The Core Tenants of Our Product Strategy 30 1 Purpose built with subscription as the fulcrum 2 Central Platform is the key to our future 3 Transforming into a multi-product company 4 Multi-vector land-and-expand strategy
Slide 31: The Subscription Economy Has Changed the Way Businesses Operate
The Subscription Economy Has Changed the Way Businesses Think and Operate One-Time Purchase Ongoing Experience 31 Access Safety Navigation Music Diagnostics
Slide 32: Data: Insights Oriented Around Subscribers, Not Products
Data: Businesses Need Insights Oriented Around Subscribers, Not Products Product-Centric Data Subscriber-Centric Insights Units Sold Inventory Margin Revenue Unit Price COGS Returns ✘ Who is the customer and what do they want next? Subscriber data has 100X more volume than product data Price Plan Li
Slide 33: Processes: Orchestrate Dynamic Subscriber Experiences
Processes: Businesses Need to Orchestrate Dynamic Subscriber Experiences, Not Linear Product Workflows Linear Product Workflows Dynamic Subscriber Experiences Order Pick Pack Replenish 60% of all subscriptions change after the initial sign-up and average 4 changes per subscription per year* Order Ca
Slide 34: Agility: Act Now or Face Irrelevance
Agility: Businesses Need the Agility to Act Now or Face Irrelevance Agility to Get to Market Fast Launched InfoHub solution in less than 2 months and has already launched second subscription offering* Agility to Respond to Market Demands Extended 14-day subscription free trial from 100K to 1 million
Slide 35: Product-Centric Systems Are Not Well-Positioned for Success
Businesses Operating on Product-Centric Systems Are Not Well-Positioned for Success 35 Limited Subscriber Insight Slow to Market Lost Agility Manual data collection and transformation to approximate the concept of a subscriber Complex alignment of multiple systems without a subscription core to alig
Slide 36: Zuora Subscription Experience Cloud
Zuora Subscription Experience Cloud The only solution built to power the entire subscriber experience. 36
Slide 37: Disparate Product Systems of Record
37 Disparate Product Systems of Record
Slide 38: Each System of Record Is a Data Silo
38 Each System of Record Is a Data Silo
Slide 39: Zuora Subscription Graph Unifies Data Silos
39 Zuora Subscription Graph Unifies Data Silos around the Subscriber
Slide 40: Subscription Graph Enables the Right Actions at the Right Time
40 Zuora Subscription Graph Enables the Right Actions at the Right Time Automate Efficient orchestration of the entire subscriber experience at scale Measure Real-time insights with leading indicators for success Act Unlimited agility to take immediate action on insights
Slide 41: Orchestration Engine Designs and Automates Subscriber Experiences
Orchestration Engine Designs and Automates Subscriber Experiences Examples: Device Network Provisioning & Entitlement Tracking & Fulfillment Usage Mediation 41 Zuora Central Platform executed 1.4B callouts to external systems in FY21
Slide 42: Purpose-Built Subscription Application Builder
Example Applications ● Monitor usage of connected services ● Track device provisioning & entitlements ● Track product shipments ● Upload and aggregate usage Future Zuora Applications Future Customer Applications Future Partner Applications 42 Purpose-Built Subscription Application Builder
Slide 43: Zuora Central Platform Shows Strong Momentum
+73% Subscription Data FY20 to FY21 Zuora Central Platform Shows Strong Momentum +44% Active Subscribers +35% Subscription Transactions +279% Workflows Executed +186% Workflow Tasks Executed +99% Notification Callouts 0 80M Custom Objects Stored 0 3.9M Data Queries Executed 0 85 Central Sandbox Cust
Slide 44: Multi-Application Strategy Expands Entry Points
Multi-Application Strategy Expands Entry Points to the Subscription Experience Cloud 44
Slide 45: Billing: Expanding Market Opportunity
Billing: Expanding Market Opportunity with a “Subscription First, Not Subscription Only” Strategy *Source: IDC MarketScape: Worldwide Subscription Management Applications 2019-2020, Forrester Wave: SaaS Billing Solutions 2019 **Source: Zuora Example Benefit: Companies are launching new subscription
Slide 46: Revenue: Strong Differentiation and Accelerating Cross-sell
Revenue: Strong Differentiation and Accelerating Cross-sell with Unified Platform Example Benefit: Companies are reducing the time to close the books from 15 days to 2 days ● Market leading revenue automation application ● Unified by the Zuora Central Platform for faster and easier deployments ● Onl
Slide 47: Collect: Significant Customer ROI
Collect: Significant Customer ROI Driving Material Attach Rate Opportunities for New and Existing Customers Example Benefit: Companies are recovering up to 20% more revenue ● New AI application powered by Zuora Central Platform ● Most robust training dataset in the Subscription Economy ● Massive ROI
Slide 48: Central Platform Should Reduce Deployment Time
Zuora Central Platform Should Reduce Deployment Time for Every Application 8 months 3 months Billing + Revenue 6 months 1 month Revenue 3 months Collect -63% -83% -67% 1 month FY22 Objectives* 48 Source: Zuora *FY22 Objectives are based upon current expectations and available information. Actual res
Slide 49: Multi-Product Strategy Unlocks Land and Expand Opportunities
Our Multi-Product Strategy Unlocks Multiple Land and Expand Opportunities 49 Central Platform Billing: Volume Billing: Advanced Billing: Volume Billing: Base Revenue: Volume Revenue: SSP Revenue: Base Collect: AI Collect: Base Platform: Workflow Platform: Sandbox Platform: Analytics
Slide 50: Product Strategy Creates Three Durable Growth Vectors
Product Strategy Creates Three Durable Growth Vectors 50 Billing Revenue Collect Future Central Platform D ri ve U p se ll G ro w th Expand Market Penetration of Beachheads Cross-sell New Products 1 3 2
Slide 51: New Product Strategy
New Product Strategy From best-in-class, back-office applications to a platform that drives business transformation. Platform for Business Transformation 1 Products purpose-built with subscription as the fulcrum2 Delivering faster time-to-value3 4 Back-Office Applications Product Investments 51 Cent
Slide 52: Customer Interview: Velchamy Sankarlingam, Zoom
Velchamy Sankarlingam President of Product and Engineering, Zoom Video Communications Customer Interview
Slide 53: Go to Market
Go to Market Robbie Traube, Chief Revenue Officer
Slide 54: Our Track Record Gives Us Access to the C-suite
54 Our Track Record Gives Us Unparalleled Access to the C-suite 8 OF TOP 10 AUTO MANUFACTURERS powered by Zuora 21 MAJOR NEWSPAPER PUBLISHING GROUPS powered by Zuora 600+ INNOVATORS IN HIGH TECH powered by Zuora 26 OF FORTUNE 100 powered by Zuora
Slide 55: An Evolution in Our Approach to GTM
An Evolution in Our Approach to GTM We’ve made significant investments in our GTM motion to execute against the opportunity. Lead Enterprise Transformation 1 Right Organization Right Focus2 Right Partners Right Expertise 3 4 Sell Applications GTM Investments 55
Slide 56: Set Up Our GTM to Drive Enterprise Growth at Scale
We’ve Set Up Our GTM to Drive Enterprise Growth at Scale Media Provider Energy Services Company High Tech Company $130K of Billing ARR Oct. 2015 2016 – 2017 2017 2018 – 2019 Sep. 2018 Oct. 2019 Jan. 2021 April 2021 Initial Sale Today Contracted Ramp of Volume New Product: Zuora Collect Additional Vo
Slide 57: Product Investments Unlock Multiple Land and Expand Strategies
Our Product Investments Unlock Multiple Land and Expand Strategies 57 Billing Revenue Collect Future Central Platform D ri ve U p se ll G ro w th Expand Market Penetration of Beachheads Cross-sell New Products 1 3 2 1 Land Transform Expand
Slide 58: New Organization Designed to Land, Transform, Expand
New Organization Designed to Land, Transform, Expand Restructured the organization, with new functions, supporting enterprise customer lifecycle. Account Executive Resource Quarterback & POC Sales Engineer Technical pre-sales support, demos, new product add-ons Customer Success Manager Primary clien
Slide 59: Reducing Churn with a Customer-centric Organization
59 Reducing Churn with a Customer-centric Organization and a Focus on the Best-fit Market Segments Reduces Churn by 67% Customers with dedicated customer support resources churn significantly less than those without Reduces Churn by 70% More Support Better Fit Larger and mid-sized customers churn si
Slide 60: Focus on Key Verticals and Segments Igniting Growth
*Source: Zuora Focus on Key Verticals and Segments Igniting Growth Allows more efficient pipeline creation and higher win rates. HIGH TECH MANUFACTURING MEDIA 2 Strategic Segment Focus FY21 YoY Win Rate in $100k+ Customers* Vertical Focus 80+% +400 bps FY21 YoY Pipeline Growth*
Slide 61: Playbook that Will Scale to Other Sectors
61 Playbook that We Expect will Scale to Other Sectors Over Time HIGH TECH MANUFACTURING MEDIA Today Tomorrow FINSERV RETAIL / MEMBERSHIP HEALTHCARE Strategic Segment Focus 2
Slide 62: Making Alliances Programmatic to Add Scale
GLOBAL SYSTEM INTEGRATORS Making Alliances Programmatic to Adding Scale & Accelerating Growth ● Source new opportunities & accelerate deals ● Develop joint product solutions ● Provide robust product delivery ● Bring deep industry expertise ● Support transformation of professional services organizati
Slide 63: Partners Provide New Access, Accelerating Growth
Example FY’21 Partner Primed Projects Partners Provide New Access, Accelerating Growth “Transformation” mission closely aligned with GSI needs. ● Partners supported 80% of Q4’21 deals* ● More partner primed deals in Q4’21 than all of FY’20 combined* ● Multiple joint solutions now in market *Source:
Slide 64: Allows Zuora to Scale without Adding Services Expense
64 Allows Zuora to Scale without Adding Services Expense Zuora GS Organization becomes more focused, expert services arm. *Forecasts are Zuora’s estimates based upon current expectation and available information. Actual results may differ from expectations. FY21 FY22E* FY23E* FY24E* P S F o re ca st
Slide 65: SI Partnership Strategy Scaling Quickly
65 SI Partnership Strategy Scaling Quickly Q4FY21 results reflect an inflection point that will accelerate going forward. Partner Sourced Pipeline, 2x QoQ Growth Q4 over Q3 Partner Influenced Bookings, 2x QoQ Growth Q4 over Q3 Source: Zuora Q1 21 Q2 21 Q3 21 Q4 21 Q1 21 Q2 21 Q3 21 Q4 21 3 Alliances
Slide 66: Blueprint that Drives Transformation
66 We Have the Blueprint that Drives Transformation Over a decades worth of insight, billions of data points on what works along the journey. 4 Blueprint for Transformation Launch Optimize LeadScale R e cu rr in g R e ve n u e G ro w th Leading the market with platform, data, and ecosystem Scaling u
Slide 67: We Can Engage and Support Anywhere along the Journey
We Can Engage and Support Anywhere along the Journey We’ve architected the teams, with tools and knowledge to insert and support at every point. Launch Optimize LeadScale R e cu rr in g R e ve n u e G ro w th 4 Blueprint for Transformation
Slide 68: Product Insights Support Customers with GTM Teams
4 Blueprint for Transformation Product Insights Support Customers in Conjunction with GTM Teams and Vertical Blueprints Performance insight direct from product Applied with proven, repeatable frameworks to each stage and vertical Robbie Traube 9:05 AM Today Analytics driven from the platform - SSG u
Slide 69: An Evolution in Our Approach to GTM
An Evolution in Our Approach to GTM We’ve made significant investments in our GTM motion to execute against the opportunity. Lead Enterprise Transformation 1 Organization to land, transform, expand Focus on the right customer segments2 Alliances strategy to drive scale and acceleration A blueprint t
Slide 70: Partner Interview: Matthew Candy, IBM iX
Partner Interview Matthew Candy Global Managing Partner of IBM iX
Slide 71: Business Model & Financials
Business Model & Financials Todd Mcelhatton, Chief Financial Officer
Slide 72: Long-Term Financial Success
Long-Term Financial Success ● Sustainable topline acceleration ● Plan to grow subscription revenue ● Long-term model delivering “Rule of 40” 72 Key Pillars of Our Growth Strategy Superior Execution ● NDR improvement taking shape ○ Upsell momentum; lower churn ○ Sustainable expansion within current b
Slide 73: Key Investments Showing Results: Product
Investment Key Investments Showing Results: Product 73 Central Platform with Analytics launched with new features and functionalities1. Revenue integration with Zuora Billing 2. Released Zuora Collect AI3. Driving adoption, reason we win larger deals, improves retention, and allows us to monetize ad
Slide 74: Opportunity to Nearly Triple Current ARR
Opportunity to Nearly Triple Current ARR* Source: Zuora *Forecasts are Zuora’s estimates based upon current expectation and available information. Actual results may differ from expectations.74 Path to Sustainable Expansion with Current Product Portfolio ● Grow as they Grow ● Business Unit Expansion
Slide 75: Multiple Products Each Could Be >$100M in ARR
USAGE Central Sandbox Analytics Workflow Orchestration AppBuilder <10% Cross Sell Advanced features AI/Machine Learning <20% BU expansions Cross Sell Advanced features Add-ons Cross Sell Add-ons <10% Source: Zuora *Potential are Zuora’s estimates based upon current expectations and available informa
Slide 76: NDR Improvement Taking Shape
Source: Zuora *FY22 Target is a Zuora estimate based upon current expectations and available information. Actual results may differ from expectations. 104% 103% 99% 99% 100% 105%+ NDR Improvement Taking Shape 76 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 FY22 Target*
Slide 77: Powerful Customer Economics: Cohort ASP
Source: Zuora CAGR FY16 FY17 FY18 FY19 FY20 FY21 Powerful Customer Economics Customer Cohort ASP (Customers at or > $100k) 77 FY2020 Cohort FY2019 Cohort FY2018 Cohort FY2017 Cohort 24% 21% 21% 18%
Slide 78: Powerful Customer Economics: Top 15 Customers per Cohort
Source: Zuora CAGR FY16 FY17 FY18 FY19 FY20 FY21 78 FY2020 Cohort FY2019 Cohort FY2018 Cohort FY2017 Cohort 30% 22% 29% 23% Powerful Customer Economics Customer Cohort ASP (Top 15 Customers per Cohort)
Slide 79: Key Investments Showing Results: GTM
Investment Key Investments Showing Results: GTM 79 Alliance development & pipeline creation1. Customer success integration with Zuora Billing and improve capabilities2. Strategic Account Teams3. Pipeline up 40% YoY in 2H’FY21 with improved win rates for large accounts1. Churn returned to historical
Slide 80: SI Partnership Strategy Scaling Quickly and Showing Results
Our SI Partnership Strategy Is Scaling Quickly and Beginning to Show Results Source: Zuora80 Benefits to Zuora ● Provide robust product delivery ● Bring deep industry expertise ● Global reach ● Improve time to go-live ● Improve overall GMs SIs are investing in Prime practices ● FY21 prime SI deals m
Slide 81: Strategy Driving Effective & Scalable Growth
Source: Zuora FY20 FY21 +400 bps700 bps FY20 FY21FY20 FY21 23% Strategy Driving Effective & Scalable Growth 81 FY20 FY21 24% Average Bookings / Rep New Business ASP % of Reps Meeting Quota Win Rate >$100K ACV
Slide 82: Growing New Business at Large Enterprises
New Business ASP Growing New Business at Large Enterprises Source: Zuora82 +23% FY20 FY21FY19 +2%
Slide 83: Gross Margin Leverage
Source: Zuora *Presented on a non-GAAP basis. Refer to the Appendix for a reconciliation of these non-GAAP measures. Gross Margin Leverage 83 FY20 FY21 Professional Services (% of Total Revenue) FY19 25% 20%30% FY20 FY21 Subscription Gross Margin* FY19 78% 79%77% FY20 FY21 Blended Gross Margin* FY19
Slide 84: Strong Balance Sheet and Capital Allocation Strategy
FY21A Cash & Short-Term Investment $187M Total Debt $6M Capex (FY21 Total) $12M Strong Balance Sheet Capital Allocation Strategy FCF positive on an annual basis going forward Continued organic investment in the business Significant cash position and minimal debt provide flexibility to pursue opportu
Slide 85: Historical Financial Performance
FY17A** FY18A** FY19A FY20A FY21A Total Revenue Growth 23% 51% 37% 17% 11% Subscription Revenue Growth 32% 36% 35% 25% 17% Non-GAAP Subscription Gross Margin* 76% 78% 77% 78% 79% Total Non-GAAP Gross Margin* 59% 57% 55% 57% 63% Non-GAAP Operating Margin* (32%) (16%) (18%) (15%) (4%) Free Cash Flow M
Slide 86: FY22 and FY25 Financial Targets
FY21A FY22E* FY25E* Subscription Revenue Growth 17% 12% – 14% 25%+ Professional Services (as a % of Total Revenue) 21% 18% – 19% <15% Non-GAAP Subscription Gross Margin** 79% 80% 82%+ Non-GAAP Operating Margin** (4%) (4%) – (2%) 10%+ Free Cash Flow Margin** (0%) 0% – 4% 10% – 15% Source: Zuora *Fore
Slide 87: Introduction of New KPIs to Track Progress
Metric Definition FY21A FY22E* FY25E* ARR Growth Current period annualized value of all subscription contracts compared to same period of prior year 12% 17% 25%-30% Net Dollar Retention Current period ARR compared to prior year’s ARR from existing customers 100% 105%+ 112%-115% Rule of 40 Sum of sub
Slide 88: Zuora Investment Highlights
Zuora Investment Highlights Zuora is Recognized as the Clear Leader 1 Accelerate ARR Growth to 25-30% NDR of 112-115% 2 Achieve the Rule of 403 Large and Growing Opportunity FY25 Objectives 88 New, Seasoned Senior Management Team GTM Initiatives Driving Adoption and Expansion Lead Enterprise Transfo
Slide 89: Q & A
Q & A
Slide 90: Thank you.
Thank you. Il
Slide 91: Appendix
A ppendix Il
Slide 92: Reconciliation of Non-GAAP
RECONCILIATION OF NON-GAAP (Dollars in Thousands) FY17 FY18 FY19 FY20 FY21 GAAP subscription revenue $89,836 $122,482 $164,805 $206,555 $242,340 GAAP total revenue $113,008 $171,106 $234,989 $276,057 $305,420 GAAP cost of subscription revenue $22,840 $31,077 $42,993 $53,036 $58,808 Subtract: Stock-b
Slide 93: Acronyms
ACV Annual Contract Value GSI Global System Integrators AE Account Executive GTM Go-To-Market AI Artificial Intelligence LTV Lifetime Value ARR Annual Recurring Revenue MRR Monthly Recurring Revenue ASP Average Selling Price NDR Net Dollar Retention CAC Customer Acquisition Cost NPS Net Promoter Sco