OPINION: Over the last 12 to 18 months, Zuora has improved steadily in execution, sales focus, and R&D discipline while implementing stronger cost controls and generating more positive customer feedback. Investment into microservices architecture is allowing for more modular packaging and faster time-to-market. The company is adding lightweight modules for CPQ and a Payment Management component that also provides expanded Collections capability. With the acquisition of revenue recognition specialist Leeyo, Zuora has annexed skilled talent and an attractive client base; it has also presented a significant new offering—RevPro (not rated here)—that falls currently in the sweet spot of customer demand. Zuora’s IPO in April of 2018 debuted to a generally favorable reception from institutions. As of this rating, the company’s component scores are all up except for Finance which reflects a larger EBITDA loss than the pre-IPO estimates. The next few quarters will be a significant test for Zuora as it navigates operating as a public entity and tries to meet or exceed growth expectations. In our view, Zuora has significant headroom for further growth.
USE CASE: Monetization projects that need subscription management with medium transaction volumes and modest to moderate complexity across a spectrum of company sizes (from SME to very large) with billing value of $25 million to $250 million as the sweet spot.
COMPETITORS: Aria Systems, BillingPlatform, goTransverse, Oracle BRM, SAP Hybris Billing
