Zuora Inc (NYSE:ZUO) Q3 2018 Earnings Conference Call - Final Transcript

Nov 29, 2018 • 05:00 pm ET

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Zuora Inc (NYSE:ZUO) Q3 2018 Earnings Conference Call - Final Transcript

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Q & A
Executive
Tien Tzuo

it is based on consumption. And then companies where their customers come back and modify their subscriptions, right, they're actively involved in their subscriptions, if you will, grow faster. And on average, if one out of 10 customers actually come back and modify their subscriptions, those customers seem to grow twice as fast.

And the companies where on average every customer does a modification to their subscriptions every year, those companies grow three times faster. And so, we can actually see this in our server as we publish all this information to our customer base, but that's why people come to us, right. People come to us because they see subscription business models as a big, big growth driver for their business. And they're looking to us to help them optimize how to capture that growth.

Operator
Operator

Stan Zlotsky, Morgan Stanley.

Analyst
Stan Zlotsky

This is Stan Zlotsky. Hey, apologies, we're handing a couple of different calls today. So from my end, and pardon if this already has been asked, the Q4 Billings, right, how should we be thinking about as we start to lap the Q4 Billings and the inorganic contribution from a year ago, as well as just a big shift to prepayments?

And then maybe just a higher level question, the partner ecosystem, right, is a very important aspect of your overall go-to-market, right. How are you guys thinking about continuing to build out that partner ecosystem? What does it take to continue to get more certified professionals involved? And where do you see the contribution from the partner ecosystem really heading as we move forward?

Executive
Tien Tzuo

I'll do the partner one, and then I'll turn it over to Tyler to talk about Billings. We chose to really highlight the partner ecosystems because we can definitely see that it's growing in importance. And whether it's on the revenue recognition side, right, these are projects deep into the CFO department, the VP of revenue department, and the auditing companies are very much involved in these. And so, we highlighted that 25% of the business is actually coming through that channel.

On the Billing side, it's a little more complicated. These are digital transformation projects. You're going to see Accenture there, you're going to Deloitte, you're going to see a bunch of these other companies, right. And so, what I would say is, we're working with a lot of these companies. We have certification programs in place. And you're going to see us talking more about that in the future. But it's something that we're pretty excited about.

Executive
Tyler Sloat

Stan, this is Tyler. Let me just touch on your Billings question, I think you asked about Q3 and Q4 Billings, and what to expect there. So, look, Q3 was a really good Billings quarter. We called out two things that also contributed to that, which was kind of a pull-in a little bit of Q4 Billings into Q3, which we do see some of that every quarter. And we saw a decent amount in Q3.