Earnings roundup: Zuora, Okta beat estimates, Nutanix misses on revenue

Zuora's shares tanked after hours on lower than expected guidance.
Written by Natalie Gagliordi, Contributor and  Stephanie Condon, Senior Writer

Cloud-based subscription management company Zuora delivered better-than-expected fourth quarter financial results after the bell on Thursday, but its shares crashed on lower guidance due to a restructure of its sales strategy. 

The company reported a Q1 net loss of $20.59 million, or 19 cents a share. The non-GAAP net loss came to 11 cents per share on revenue of $64.1 million, up 22% year-over-year. Meanwhile, Zuora said subscription revenue came to $47.3 million, an increase of 32% year-over-year. 

Wall Street was expecting a non-GAAP net loss of 13 cents a share on revenue of $64.15 million. 

Zuora CEO Tien Tzuo said the company plans to retool its sales approach as it works to scale its business, and that the efforts will impact revenue for the remainder of the year. 

As such, Zuora expects first quarter revenue in the range of $66 million to $68 million and a non-GAAP net loss between 15 cents and 13 cents. Analysts were expecting a loss of 11 cents and revenue of $65.6 million. For the year, the company expects revenue between $268.0 million and $278.0 million, well below estimates for $291.2 million. 

Zuora's shares fell more than 24% in late trading.

"In the first quarter, we saw 32 percent growth in subscription revenue and an increase in customer usage of our solutions," said Tien Tzuo, Founder and CEO of Zuora. "We continue to be excited by the healthy demand for subscription business models, but we are making changes to our sales approach to scale the business to the next level, which tempers our expectations for the remainder of the year. Our confidence in the long term growth trajectory for the company remains unchanged."

In other earnings news, identity and device management firm Okta reported record revenue as part of its first quarter financial results. The San Francisco-based company posted a non-GAAP loss of 19 cents per share on revenue of $125 million, up 50% from the same time last year.

Analysts expected a loss of 21 cents per share on revenue of $116.86 million. Shares climbed up more than 6% in after-hours trading.

Elsewhere on the balance sheet, Okta said subscription revenue was $117.2 million, an increase of 52% year-over-year. In a statement, Okta CEO Todd McKinnon said the company's subscription revenue growth was bolstered by sales to enterprise customers.

In terms of guidance, Okta expects second quarter revenue between $130 million to $131 million, with a non-GAAP loss between 11 cents and 10 cents a share. Wall Street is expecting a loss of 14 cents a share on revenue of $127.54 million.

Nutanix also reported on Thursday. For its third quarter, Nutanix posted declining revenue due to its shifting business model. The company reported a non-GAAP net loss per share of 56 cents on revenue of $287.6 million, down from $289.4 million a year prior.

Billings came to $346 million, down from $351.2 million a year prior. Software and Support Revenue was $265.8 million, up 17 percent year-over-year. Software and Support Billings came to $324.2 million, up 11 percent year-over-year.

"While we faced a top-line impact in our third quarter as we continue to execute our strategic shift toward a recurring revenue business model, our strong foundation and commitment to our customers position us well for the long term," CEO Dheeraj Pandey said in a statement. "Successful businesses are built over time on a bedrock of exceptional products, outstanding customer support and talented and committed employees."

For the fourth quarter of fiscal 2019, Nutanix expects non-GAAP net losses per share of approximately 65 cents on revenue between $280 million and $310 million.

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