ZUO - Zuora trims full-year revenue outlook amid FX headwinds

Zuora ( NYSE: ZUO ) shares slid in early trading on Thursday after the software firm lowered its full-year revenue forecast.

Late Wednesday, the company reported its second quarter results that exceeded estimates across all of key metrics. Total revenue grew 14% Y/Y to $98.8M, with subscription revenue up 17% to $83.8M. Adj. net loss narrowed from $4.6M in the prior year quarter to $4.4M.

Adj. subscription gross margin improved over 100 basis points year-over-year to 80%, while adj. professional services gross margin was negative 3%, in line with the company's goal to run at or near breakeven.

Zuora ( ZUO ) ended quarter with $449M in cash and cash equivalents, a sequential decrease of $4M.

Outlook: The company revised its revenue outlook for full year, from $402M to $406M previously to $394M to $400M ( consensus : $402.07M). Adjusted loss per share is seen at -$0.18 to -$0.14 (consensus: -$0.16) compared to -$0.19 to -$0.15 previously. The revised outlook assumes an impact to subscription revenue due to FX and macro uncertainty.

Speaking on the result, Berenberg analyst said, "The results show strong recurring revenue, even as currency issues weighs on the outlook. ZUO’s long-term target to achieve 40% subscription revenue growth plus FCF margin remains intact and we view the weak guidance for the year as transitory."

ZUO shares had dropped as much as 5% pre-market and was down 3% shortly before 11AM ET

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