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This statistic highlights Zuora Inc’s Revenue by Segment, split across Subscriptions, and Professional Services, reported on a quarterly basis from Q1 2018 onwards.
|Segment||Q3 2021||Q2 2022||Q3 2022||Contribution in Q3 2022|
(All values are in millions, except percentages)
Zuora Inc’s total revenue has been on the rise Q4 2020. The company’s total revenue by segment increased from $77.25 million in Q3 2021 to $89.23 million in Q3 2022, marking a 15.5% growth on a yearly basis. It also rose from $86.49 million in Q2 2022 to $89.23 million in Q3 2022, which was 3.2% on a quarterly basis.
Zuora Inc’s revenue is further bifurcated into the following segments:
Subscription revenue consists of fees for access to, and use of, products, as well as customer support. The company generates subscription fees pursuant to non-cancelable subscription agreements with terms that typically range from one to three years. Subscription revenue is primarily based on fees to access the services platform over the subscription term. The company recognizes subscription revenue over the term of the subscription period, beginning on the date on which access to the platform is provided, which is generally on the date when the customer signed the subscription agreement.
The subscription segment generates the maximum revenue by segment, which accounts for 83% of the company’s total revenue generated by all segments as of Q3 2022. The revenue increased from $62.02 million in Q3 2021 to $73.78 million in Q3 2022, marking a rise of 18.9% on a year-on-year basis. Further, it also inclined $2.28 million, or by 3.2% as compared to $71.50 million in Q2 2022, on a quarterly basis.
The incline was because of the rise in the consumer base, consisting of both new and existing consumers. New customers contributed approximately $4.1 million to the increase in subscription revenue during the Q3 2022, while increased transaction volume and sales of additional products to the existing customers contributed the remainder.
Professional services revenue consists of fees for services related to helping customers deploy, configure, and optimize the use of the solutions. These services consist of system integration, data migration, process enhancement, and training. Professional services projects usually take three to twelve months to complete.
The company records revenue as and when services are carried out for time and materials engagements and on a proportional performance method as the services are carried out for set fee engagements. It anticipates to continue to convert a portion of professional services implementations to strategic partners, which also includes system integrators (SIs), and subsequently the company expects professional services revenue to decline over time as a percentage of total revenue.
The professional service segment generated 17% of the company’s total revenue generated by segments in the latest quarter of Q3 2022. The revenue from the professional services increased from $15.23 million in Q3 2021 to $15.46 million in Q3 2022, which was 1.5% growth on a year-on-year basis. Additionally, it also grew by 3.1% as compared to $14.99 million in Q2 2022, on a quarterly basis.
Established in the state of Delaware in 2006, Zuora, Inc. began operations in 2007. It is headquartered in Redwood City, California. It is one of the leading companies in subscription management.
Zuora provides a cloud-based subscription management platform, architected especially for ever-changing, recurring business frameworks. Its solution enables companies across numerous industries and areas to launch, manage and escalate a subscription business, automating the entire subscription order-to-revenue process, including billing, collections, and revenue recognition. The solution includes Zuora Central Platform, Zuora Billing, Zuora Revenue, Zuora Collect, and other software that supports and expands upon these core products.
The company works on the idea that one day every company will be a part of the Subscription Economy, under the tagline-“The World Subscribed”. Its focus has been on developing software that enables customers to thrive as a subscription business. The company closed ten deals with ACV of $500,000 or more, including two deals with ACV of $1.0 million or more in the latest quarter. Customer transaction volume through Zuora’s billing platform was $18.8 billion, an increase of 28% compared to last year. The common stock of the company is publicly traded on the NYSE under the symbol “ZUO” and is a component of the Russell 2000 index.
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