#1zuora Investor Day April 12, 2021#2Disclosures Statements in this presentation and the accompanying oral presentation include "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by the use of words such as "anticipate," "expect," "intend," "goal," "plan," "believe," "seek," "estimate," "continue," "may," "will," "would," "should," "could," and variations of such words and similar expressions. All statements other than statements of historical fact could be deemed forward-looking. Statements that refer to or are based on estimates, forecasts, projections, uncertain events or assumptions, including statements relating to total addressable market (TAM) or market opportunity, future products and the expected availability and benefits of such products, and anticipated trends in our businesses or the markets relevant to them, also identify forward-looking statements. These expectations or any of the forward looking statements involve many risks and uncertainties that could prove to be incorrect, and actual results or outcomes could differ materially from those projected or assumed in the forward looking statements. Additional information regarding these and other risks and uncertainties is included in Zuora's Annual Report on Form 10-K (2021 Form 10-K) filed with the Securities and Exchange Commission (SEC) on March 31, 2021, as well as other documents that may be filed or furnished by us from time to time with the SEC. This presentation also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other information about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions and estimates of our future performance and future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk and actual events or circumstances may differ materially from events and circumstances reflected in this information. This presentation contains non-GAAP financial measures. You can find the reconciliation of these measures to the most directly comparable GAAP financial measure in the Appendix at the end of this presentation. The non-GAAP financial measures disclosed by Zuora should not be considered a substitute for, or superior to, the financial measures prepared in accordance with GAAP. Please refer to "Non-GAAP Financial Measures" disclosure in our 2021 Form 10-K for a detailed explanation of the adjustments made to the comparable GAAP measures, the ways management uses the non-GAAP measures and the reasons why management believes the non-GAAP measures provide investors with useful supplemental information. The forward-looking statements included in this presentation reflects our views as of April 12, 2021, unless an earlier date is indicated. Zuora does not undertake and expressly disclaims any obligation to update any statement made in this presentation, whether as a result of new information, new developments or otherwise, except to the extent that disclosure may be required by law. In addition, a glossary of terms is provided in the Appendix at the end of this presentation. Zuora, the Zuora logo, Zuora Revenue, Zuora Billing, Zuora Central Platform, Subscription Economy, Powering the Subscription Economy, and Subscription Economy Index and other registered or common law trade names, trademarks, or service marks of ours appearing in this presentation are our property. This presentation also contains trade names, trademarks, and service marks of other companies, including, but not limited to, our customers, technology partners, and competitors that are the property of their respective owners. We do not intend our use of other companies' trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, these companies.#33 Zuora Investor Day 2021 - Agenda Subject Time (PT) 10:00am PT What is Our Market Opportunity? 10:14am PT Customer Interview: Chegg 10:26am PT 10:55am PT Product: A Platform to Deliver Enterprise Subscription Experiences Customer Interview: ZOOM Presenters Tien Tzuo, Chief Executive Officer of Zuora Jug Bath, CTO, Chegg Learning Services Moderator: Tien Tzuo, CEO of Zuora Sri Srinivasan, Chief Product & Engineering Officer of Zuora Velchamy Sankarlingam, President of Product and Engineering, Zoom Video Communications Moderator: Tien Tzuo, CEO of Zuora 11:05am PT Break 11:15am PT GTM: Driving Growth with Enterprise Transformation 11:33am PT Partner Interview: IBM Robbie Traube, Chief Revenue Officer of Zuora Matt Candy, Global Managing Partner, IBM Moderator: Robbie Traube, CRO of Zuora 11:45am PT 12:00pm PT How Will This Result in Strong and Sustainable Growth? Q&A Todd McElhatton, Chief Financial Officer of Zuora All Zuora Executives zuora#4The Opportunity Tien Tzuo, Founder & Ceo zuora#5zuora OUR VISION: The World. Subscribed. OUR MISSION: To help the world's best companies win in the subscription economy. 26 OF FORTUNE 100 powered by Zuora 8 OF TOP 10 AUTO MANUFACTURERS powered by Zuora 21 MAJOR NEWSPAPER PUBLISHING GROUPS powered by Zuora 600+ INNOVATORS IN HIGH TECH powered by Zuora#66 We Lost Momentum as We Scaled Over the past 2 years, we've made the investments we need in technology and GTM to accelerate growth. zuora Growth Trajectory We Are Here Scale Challenges: Zuora Revenue Integration into Zuora Billing Enterprise GTM Execution ● Implementation Complexity NOTE: Directional visual representation, not a quantitative forecast. zuora#77 Today You'll Hear from the Team Driving Our Evolution Sri Srinivasan Chief Product & Engineering Officer Joined January 2021 Robbie Traube Chief Revenue Officer Joined November 2019 Todd Mcelhatton Chief Financial Officer Joined June 2020 zuora#8000 8 The World's Economic Value Has Shifted from Ownership to Usership % of population who would prefer to own fewer things. 65% U.S. 00.000 69% 65% U.K. Netherlands DOO 75% 68% France 58% Germany China 65% Spain 68% Italy Is a person's status no longer defined by what they own? Source: The Harris Report, "The End of Ownership Report", 2021. https://www.zuora.com/resource/the-end-of-ownership/ 77% Singapore DO 72% Japan 骨 67% Australia 66% New Zealand zuora#99 Usership Has Created the Subscription Economy Transformation impacting every industry. Technology Hardware Software as a service NCR Automobile Car ownership Mobility as a service Ford Media Ad sold Subscribers Medical Health care Patient outcomes Financial Insurance Finance as a service Government Waste "Pay as you throw" The Guardian SIEMENS Healthineers Fidelity INVISIMINIS DENVER THE MILE HIGH CITY zuora#10Subscriptions Will Inevitably Become the Dominant Business Model 10 10 90% of tech companies are embracing subscriptions 75% of all consumer facing companies will deliver subscription services >50% of all global Gross domestic product (GDP)1 Now Tomorrow The Future Default for Leading Edge Source: Ernst & Young² Broad Subscription Adoption Source: Gartner³ A Subscriber-Centric World Source: IDC4 ¹By 2023, IDC estimates that products and services from digitally determined organizations will make up over 50% of the global GDP. Source: IDC report titled IDC FutureScape: Worldwide Monetization 2021 Predictions, Mark Thomason, October 2020, IDC #US4624692. 2Source: https://www.ey.com/en_us/performance-improvement/how-to-holistically-plan-for-switching-to-a-subscription-selling-model ³Source:https://gtnr.it/3mxG0ow 4Source: https://www.businesswire.com/news/home/20201208005393/en zuora#1111 Incumbents Are Now Moving with Disruptors 100 year old companies began to finally embrace subscription models. Disruptors zendesk zoom DocuSign box [DA ZN HubSpot SONOS Veeva + Ford Incumbents BRIDGESTONE illu Honeywell NCR PHILIPS SIEMENS gm xerox CATERPILLAR zuora#12SEI Level 2020: The Year that Caused the Herd to Break This is the "now or never" moment for incumbents to avoid irrelevance. Growth The Subscription Economy Index vs. S&P 500 and Retail Sales Growth 450 SEI 400 S&P 500 Sales Index US Retail 350 300 250 200 150 100 Q4 2012 1/1/2012 Q2 2012 Q2 2013 Q4 2013 Q2 2014 Q2 2019 Q4 2014 Q2 2019 Q2 2015 Q2 2016 Q2 2017 Q4 2017 Q2 2018 Q4 2018 Q2 2019 Q4 2019 Q2 2020 Q4 2020 Resilience During the COVID-19 induced crisis, 4 out of 5 subscription companies kept growing or had limited impact 437% Subscription growth rate is decelerating and negative Contracting 15.4% Accelerating 20.3% Subscription growth rate is accelerating Subscription growth rate is decelerating but still positive Slowing 16.9% 132% 130% Limited Impact 47.4% 12 "While S&P 500 sales in Q1 2020 contracted at a -1.9% annual rate, subscription-based revenue continued to thrive, growing at 9.5% in the same quarter"* *Source: Subscription Economy Index report, Sept. 2020 https://www.zuora.com/resource/subscription-economy-index/ Subscription growth rate did not significantly change zuora#132020: The Best Companies Were Prepared zoom Zoom launches free offerings, including for K-12 and grows users by 30X RESY Resy provides billing relief for restaurants Fender .......... Fender extends free trials to 1 million customers 13 *Source: Zoom growth between Dec 19 and April 2020 https://blog.zoom.us/how-to-use-zoom-for-online-learning/ zuora#14They're Transforming the Nature of Their Business Models 14 Product-Centric Business Model Product Channels Customer ӨӨ Customer-Centric Business Model O Service Subscriber இ Experience Channels ☐ ...... One-time product purchase Revenue tied to product sales Growth through unit margins Products as-a-service Revenue tied to customer usage Growth over customer lifetime zuora#15Summary Goodtructing, Nethe tool sendin Building the Dominant Subscriber Experience for Every Industry 140 Re-imagine 0000 Scrubbing on 55 15 GM PHILIPS the Healthcare BARCLAYS Experience Re-imagine the Financial Services Experience GM 48 Edit Modd Button To Est Re-imagine the Transportation Experience zuora#16Our Opportunity Is to Help the World's Best Companies Win in the Subscription Economy 26 OF FORTUNE 100 powered by Zuora 8 OF TOP 10 AUTO MANUFACTURERS 21 MAJOR NEWSPAPER PUBLISHING GROUPS powered by Zuora powered by Zuora box DocuSign Veeva theguardian KIA Zillow zendesk A AUTODESK MICRO SIEMENS Healthineers DAIMLER NUTANIX nest RICOH PHILIPS XPLORNET ROGERS Vonage BRIGGS & STRATTON P poly GM CAT 16 Alcatel-Lucent NCR (((SiriusXM)) SATELLITE RADIO A FCɅ The Seattle Times FT FINANCIAL TIMES 600+ INNOVATORS IN HIGH TECH powered by Zuora vmware zoom CenturyLink™ Ford Schneider Electric AVAYA ☑ HYUNDAI sage Bobcat HBO NORDIC zuora#1717 Up for Grabs: A $5B Market Today, Growing at 25-30% YOY Fast Growing TAM* ($ in billions) $9.1 $3.0 32% CAGR $5.0 CY2018A CY2020A CY2022E*** ... That Remains Largely Untapped Custom Home Grown 36% Locally Oriented Developing Markets 23% Legacy Players 12% Customized ERP 24% CY2020 TAM** *Reflects TAM for Zuora Billing and Zuora Revenue based on MGI's report "Agile Monetization Platform (AMP) 2018-2022" published December 2018. **CY2020 TAM breakdown is derived from MGI estimates and Zuora's TAM model. ***Forecasts are Zuora estimates, based upon current expectations and available information. Actual results may differ from expectations. Zuora 5% zuora#1818 Subscription Economy Evolution Zuora Evolution Evolution in Company Mix Disruptors and now enterprise incumbents, racing to stay relevant and re-invent themselves for the next 100 years Disruptors + Incumbents From supporting any disruptor, to focusing on companies with enterprise potential and transforming the incumbents Evolution in Technology Needs Solutions to help transform business models, and to deliver holistic, differentiated experiences to customers over time Platform Supporting Transformation From best-in-class, back-office applications to a platform that drives business transformation Evolution in Business Needs A partner who can guide and support them throughout their journey Enterprise GTM From selling apps, to guiding enterprise companies on their Journey to Usership zuora#1919 FORRESTER Our Starting Point: Best in Class Applications Challengers Contenders Strong Performers Leaders IDC IDC MarketScape Worldwide Subscription Management Applications, 2019-2020 Stronger current offering Weaker current offering Chargify O RecVue Zuora Aria Systems BillingPlatform Gotransverse Recurly Salesforce SAP Stronger strategy Weaker strategy Market presence Capabilities Chargify Oracle NetSuite 2Checkout Zuora Gotransverse Leaders Aria Systems BillingPlatform Sage Intacct Salesforce Recurly SAP RecVue Vindicia Major Players Contenders The Forrester Wave: SaaS Billing Solutions, Q4 2019 The Forrester Wave" is copyrighted by Forrester Research, Inc. Forrester and Forrester Wave are trademarks of Forrester Research, Inc. The Forrester Wave is a graphical representation of Forrester's call on a market and is plotted using a detailed spreadsheet with exposed scores, weightings, and comments. Forrester does not endorse any company, product, or service depicted in the Forrester Wave. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. IDC: Worldwide Subscription Management Marketscape, 2019-2020 DC MarketScape vendor assessment model is designed to provide an overview of the competitive fitness of ICT (information and communications technology) suppliers in a given market. The research methodology utilizes a rigorous scoring methodology based on both qualitative and quantitative criteria that results in a single graphical illustration of each vendor's position within a given market. IDC MarketScape provides a clear framework in which the product and service offerings, capabilities and strategies, and current and future market success factors of IT and telecommunications vendors can be meaningfully compared. The framework also provides technology buyers with a 360-degree assessment of the strengths and weaknesses of current and prospective vendors. Strategies Source: IDC, 2019 Participants zuora#20Accessibility is inconsistent across markets These Experiences Span the Full Customer Lifecycle Registration process feels too rigid, while the pricing schema is hard to understand Only basic user dashboard capabilities Discover Registers Accesses It is unclear where, when and how memberships and subscriptions connect Example Customer 1.0 Subscriber Journey (outside-in view) Subscribers have very limited ability to adjust their subscriptions Unclear if [CUSTOMER] has dedicated support channels for subscribers This is the only chance existing subscribers have to adjust their plans Explores Uses/Adjusts Currently no options for subscribers to pivot from/to or expand their subscriptions Renew Troubleshoots Expands Promotes Onboards Engages Rates Bills Collects Recognize Closes Reports Supports Incentivizes Up/Cross Sells sub scr ibed STRATEGY GROUP 20 20 Example Customer 1.0 Delivery System (inside-out view) zuora#21Now, We've Built the Platform to Deliver these Differentiated Customer Experiences Organizes the data, orchestrates the complexity, and delivers the agility required for modern subscriber experiences. ZUORA SUBSCRIPTION EXPERIENCE CLOUD 21 24 REVENUE BILLING COLLECT Analytics FUTURE ZUORA APP Subscription Graph Experience Orchestrator CENTRAL PLATFORM APPLICATIONS Subscription App Builder CUSTOMER APP PARTNER APP zuora#22Zuora Our Platform Strategy Supports 3 Beachhead Applications to Start Unlocking New Growth Vectors Zuora Billing QeSend for th Welcome back, Richard! Here's whatshoppening with your customers dey AB RECENT LUNGUNG Q FALENTS RECENT ORDER K Payment 0 Zuora REVENUE C MANAGE MY Close Process Dashboard J A 000 12302020 129533 12531 120,531 11/2 00000254 11232020 115313 535323 135310 L200 US220 -00000024 22020 10315 117312 10/20/2820 0002 10202020 111507 000000 ama 100/200 137503 1380 135,000 922220 17/2820 -00000000 091712020 116544 LO 136079 00000 02/02/2020 11211 137220 CONFLITE 03-30-200 130 22 22 Hands-down leader unlocking TAM expansion Zuora Revenue DATA VALEATION ACCOUNTING CONCILIATION CLOSEPHOCK Book GAAP 00 =A =zuora Test C 70.3% RECOVERY LATE Action Needed DOWNLOAD ACTCH HIGH Reconciliation Success Rate Summarization job Resolve Line Stage Exceptions" www THE FOLLOWING ARE NOT RECONCILING Successfuly Complete 80% 30-Jan-2025 MORE DETAILE Waterfall Report is not reconciling with Revenue Insight Report and RC Rollforward Report Revue Actuty from the Wacom Report To Activity from the Wor ⚫ing the Weeport the Whitep 主 Tatal Revenue Awty from the Reven # Tettyen the RC Rad Contract Laity Addon Cup Billing RollForward Report is reconciling with RC RollForward Report and Revenue Insight Report Strong differentiation accelerating cross-sell ACTION MIRDIO Водител Велиное не песокото GLEASE REVIEW Op VIEW DESAL K Customer Groups High C Zuora Collect Qingforseting Search for a here 2.0 © $25642 RECONFURD Come customer groups CVE 0 1.3 Response Codes and Groups Hands which should NOT tetrad sch as canceledt and what auch aufcu Decine ether temporary dedres, which may have a chores of coding System are ruting the gateasy being down Responses Grouped by Code Type Codes by Customer C Funds Collected ROI that sells itself one-click deployment zuora#23They're Looking for Help to Solve These Higher Order Problems 23 23 Offering Design How do you design, price, and package your subscription offerings to optimize for sustainable growth? Subscriber Experience How do you create a frictionless subscription experience that drives competitive advantage? Financial Model How do you architect the business model that delivers recurring revenue growth and profitability? Business Operations How do you operate with greater agility and efficiency across order-to-cash processes? Enterprise Architecture How do you architect your technology infrastructure to grow and scale with your business? SKILLS TO MASTER ON THE JOURNEY TO USERSHIP zuora#2424 24 Recurring Revenue Growth Today We Have the Blueprint and Team to Guide their Journey Launch Optimize Scale Lead SIEMENS Kayo CLEAR GM New Relic zoom Launching a brand new subscription business Optimizing to add subscribers and drive growth Scaling up the business with automation Leading the market with platform, data, and ecosystem zuora#2525 25 Cumulative Conversation Rate Our Data Helps Us Guide Customers in Ways No One Else Can 100,0% 75.0% 50.0% 25.0% The "S" Curve (Cumulative Free-to-Fee Conversion Rate) Example Customer Engagement Benchmark "S" Curve (10 SaaS Companies) sub Can [CUSTOMER] push the "S" curve UP AND LEFT? ...scr. ibed STRATEGY GROUP [CUSTOMER] Connected Services "S" Curve (10% Conversion Assumption) 10 30 50 70 90 110 130 150 170 0 0.0% Days After Customer Sign-up Source: Zuora SSG and Close Research, 2019 zuora#26We Needed to Evolve Our GTM to Align with the Market and the Product GTM Organization ..... CUSTOMER 图 Focus HIGH TECH Alliances zoom NUTANIX zendesk vmware IBM Deloitte. MANUFACTURING Capgemini accenture ............ gm Ford CAT Honeywell EY pwc TATA MEDIA FT TIMES FINANCIAL The. Guardian HBO The Seattle Times NORDIC Infosys vipro zuora Re-designed our GTM organization to increase support throughout the customer journey Focused our GTM on the the right segments to drive repeatability and efficiency Built an alliances motion to accelerate growth and provide services scale 26 26#2727 We Have a Financial Model that Is Designed to Drive Long-Term, Sustainable Growth Product Investments Paying Off New growth vectors, sustained differentiation and stickiness via platform GTM Investments Paying Off Growth in enterprise pipeline, higher win rates, and a clear path to ARR growth Significant Install Base Opportunity Reduction in churn, increase in NDR, and an opportunity within the install base zuora#28Jug Bath CTO of Chegg Customer Interview }} 3 zuora#29The Product Sri Srinivasan, Chief Product & Engineering Officer zuora#3030 1 The Core Tenets of Our Product Strategy 2 3 4 Purpose built with subscription as the fulcrum Central Platform is the key to our future Transforming into a multi-product company Multi-vector land- and-expand strategy zuora#3131 The Subscription Economy Has Changed the Way Businesses Think and Operate One-Time Purchase GM Safety Ongoing Experience Access ☐ DI Diagnostics GM 잉 Navigation bod Music zuora#3232 32 Data: Businesses Need Insights Oriented Around Subscribers, Not Products Product-Centric Data Units Sold Unit Price Inventory LOND COGS Margin Returns Revenue Subscriber-Centric Insights Price Plan Monthly Miles Driving Incidents Lifetime Value Churn Signals Potential Upgrades Favorite Music Geographic Location Who is the customer and what do they want next? Subscriber data has 100X more volume than product data zuora#33Processes: Businesses Need to Orchestrate Dynamic Subscriber Experiences, Not Linear Product Workflows Linear Product Workflows Dynamic Subscriber Experiences Upgrade Security Order Car Order Pick Pack Replenish 33 33 Ship Car Ship Track Invoice Pay Return Car Return Diagnose Repair Scrap Is it the same customer? How was their experience? What value did they gain or lose? Add Music Package Subscribe to Mobility Renew Subscription DI == +0 S Downgrade GPS Tracking Suspend Diagnostics Resume Diagnostics Add Driver 60% of all subscriptions change after the initial sign- up and average 4 changes per subscription per year* *Source: Subscribed Institute Benchmark: Subscription Changes Zuora#34= 34 Agility: Businesses Need the Agility to Act Now or Face Irrelevance Agility to Get to Market Fast BRIGGS & STRATTON Agility to Constantly Experiment Fender Agility to Respond to Market Demands zoom Launched InfoHub solution in less than 2 months and has already launched second subscription offering* Pricing model flexibility enabling quick reactions to market conditions and user feedback* Extended 14-day subscription free trial from 100K to 1 million new subscribers* *Source: Zuora Case Studies zuora#3535 Businesses Operating on Product-Centric Systems Are Not Well-Positioned for Success Limited Subscriber Insight Slow to Market Lost Agility Manual data collection and transformation to approximate the concept of a subscriber Complex alignment of multiple systems without a subscription core to align to Hardcoding workflows makes it impossible to design new subscriber experiences Zuora#3636 Zuora Subscription Experience Cloud The only solution built to power the entire subscriber experience. REVENUE BILLING COLLECT Analytics FUTURE ZUORA APP Subscription Graph Experience Orchestrator CENTRAL PLATFORM APPLICATIONS Subscription App Builder CUSTOMER APP PARTNER APP zuora#3737 32 CLM RMA Disparate Product Systems of Record Inventory PCM E-Commerce CRM Partner Service SCM CSM Campaign ERP CPQ PSA loT Support zuora#3838 CLM RMA Each System of Record Is a Data Silo Inventory PCM E-Commerce CRM Partner Service SCM CSM loT Campaign ERP PSA CPQ Support zuora#3939 Zuora Subscription Graph Unifies Data Silos around the Subscriber CLM Inventory RMA PCM E-Commerce CRM Partner Service Subscriber SCM CSM loT Campaign ERP PSA CPQ Support zuora#40Zuora Subscription Graph Enables the Right Actions at the Right Time Measure Real-time insights with leading indicators for success 40 40 E-Commerce CRM Subscriber SCM CSM Act Unlimited agility to take immediate action on insights Automate Efficient orchestration of the entire subscriber experience at scale zuora#41=zuora Home Worldlows Hardware Trocking & Fulfillment Har Zuora Home Workflows Usage Mediction App [Utility/Telco] =zuora Uso Orchestration Engine Designs and Automates Subscriber Experiences Home Workflows loT Device Provisioning & Entitlement loT =zuora Home Workflows EV Charging Network App (Automotive) EV Charging Network App [Automotive] +70€ LYying App WORKFLOW RUN HISTORY TASKS SETTINGS DOCUMENTATION Query +Stan La PENDING PROCE Success For Each E Case: Charge Query Existing Sub-Account Ex Locale Uplif Sub-Account Success SSED Records TRU Q Query Parent Success Create Account Contact CreateDebt Meme Existing Sub-Accart 1 T Success Create Debit Nema New Sale Account 41 Zuora Central Platform executed 1.4B callouts to external systems in FY21 Ford BOSCH PHILIPS origin Pet Debit Mens Update Status PROCESSED Examples: Device Network Provisioning & Entitlement Tracking & Fulfillment Usage Mediation Zuora#4242 42 Purpose-Built Subscription Application Builder =zuora Home Platform Custom Objects < Vehicle Account Information ACCOUNTNUMBER A00000001 Ford H BOSCH PHILIPS Qorigin Vehicle Record Summary MAKE Acme YEAR 2021 EV Charge Provisioning a Type here to filter results... BUCKET TYPE 1.Freet EV Charge Transactions Net MRR $40 $43.7M Dec 2020 NAME Zuora Inc MODEL Brum VIN 4T4BF1FK4CR236139 ZU-pdesal zuzuora.com [email protected] STATUS Active COLOR White EDIT OBJECT DEFINITION E PURCHASE QTY BUCKET UOM BUCKET PRICE PER UNIT BUCKET PRICE CURRENT QTY ASSOCIATED DEBIT MEMO 250 kWh 0 0 250 DM00004930 SN2000 Senice Oiec 2019 Mar 3020 Ju New 2020 2020 MRR Changes SOM $5M Mar 2000 2020 Ne 2020 About Zuora News & Press Privacy Careers Contact Us Copyright © 2008-2021, Zuora Inc. All Rights Reserved. 5- 1-11 < > 2020 2020 Example Applications Monitor usage of connected services Track device provisioning & entitlements Track product shipments Upload and aggregate usage Future Zuora Applications Future Customer Applications Future Partner Applications zuora#4343 43 +44% +73% +35% Active Subscribers Subscription Data Subscription Transactions FY20 to FY21 Zuora Central Platform Shows Strong Momentum +279% Workflows Executed +186% Workflow Tasks Executed +99% Notification Callouts Source: Zuora 0-80M Custom Objects Stored O▸ 3.9M Data Queries Executed 0-85 Central Sandbox Customers zuora#44Multi-Application Strategy Expands Entry Points to the Subscription Experience Cloud 44 REVENUE BILLING COLLECT Analytics FUTURE ZUORA APP 모모모모 Subscription Graph Experience Orchestrator CENTRAL PLATFORM APPLICATIONS Subscription App Builder CUSTOMER APP PARTNER APP zuora#45Billing: Expanding Market Opportunity with a "Subscription First, Not Subscription Only" Strategy Market leading application named by Forrester, IDC* • 30% growth in FY21 Net Billing Volume** Only platform powering high volume and high complexity scale for B2B and B2C businesses • Unlocking new enterprise market share in existing customers and new business opportunities 45 Example Benefit: Companies are launching new subscription services in 90 days, changing pricing in weeks, scaling operations to 8.8M invoices in a single day =zuora QLooking for something? Search for it here. Welcome back, Richard! Here's what's happening with your customers today. Aging Balance Monthly Last 6 Months $5 $2.5M 2020 ACME Industnes, Inc. Tenant 10 MANAGE MY DASHBOARD Recent History g Avis Car Rentals Customer A-500000149 Subscription Payments Invoices Sap Ott 2020 www 2020 Dec 2020 Bill Runs RECENT BILL RUNS RECENT PAYMENT RUNS DRAFT INVOICES O FAILED PAYMENTS RECENT ORDERS Q Type here to filter results Y BILL RUN # TARGET DATE EXECUTED ON TOTAL CUSTOMERS OF PROCESSED DOCUMENTS OF INVOICES OF CREDIT MEMOS STATUS BR-00000859 12/30/2020 12/30/2020 11:12AM UTC 120.533 120.531 120,531 1 11/23/2020 BR-00000754 11/23/2020 119,323 119.323 119.310 0 POSTED ㅁ 10:22AM UTC 11/12/2020 BR-00000725 11/12/2020 60,532 60.510 10:33AM UTC 60,510 ° COMPLETED ㅁ 10/29/2020 BR-00000724 10/29/2020 117,335 0950AM UTC 117,342 117,332 2 COMPLETED 10/20/2020 BR-00000712 10/20/2020 117,507 117,527 117,507 5 10-45AM UTC 10/01/2020 BR-00000701 10/01/20201 116,899 116.890 116,880 11:02AM UTC O 09/22/2020 BR-00000695 09/22/2020 3,032 3.022 3,015 D CANCELLED 0 11 DAM UTC 09/17/2020 BR-00000690 09/17/2020 116,544 116.550 116,539 2 COMPLETED BR-00000682 1024AM UTC 09/02/2020 09/02/2020 117,223 117,235 117,220 10 00:55AM UTC 0 Rows per page: 10- 1-10 of 200 K < > > *Source: IDC MarketScape: Worldwide Subscription Management Applications 2019-2020, Forrester Wave: SaaS Billing Solutions 2019 **Source: Zuora zuora#46Revenue: Strong Differentiation and Accelerating Cross-sell with Unified Platform Market leading revenue automation application Unified by the Zuora Central Platform for faster and easier deployments Only complete order to revenue solution purpose built for subscription and non-subscription businesses New Real-Time Revenue eliminates the concept of closing the books =Zuora REVENUE Dashboard/Cose Process Dashboard Close Process Dashboard JAN-21 DATA VALIDATION ACCOUNTING RECONCILIATION CLOSE PROCESSING ACME in Ten 10 DOWNLOAD Summarization Job Successfully Complete LAST RAN 30-Jan-2021 Reconciliation Success Rate THE FOLLOWING ARE NOT RECONCILING STATUS Waterfall Report 80% Bing RollForward Report w/to view more MORE DETAILS WARNINGS Waterfall Report is not reconciling with Revenue Insight Report and RC RollForward Report Total Revenue Activity from the Waterfall Report Book: GAAP Org Test Inc. Action Needed January 19th ACTION NEEDED Resolve 3 Line Stage Exceptions VIEW DETAIL > January 25 ACTION NEEDED A Beginning Balance not Reconciling VIEW DETAIL > January 31 PLEASE REVIEW P 2 Orphan Transactions VIEW DETAIL # Total Revenue Activity from the Revenue Insight Report 46 46 Total Revenue Activity from the Waterfall Report 4 Total Revenue Activity from the RC RollForward Report: Beginning Balance from the Waterfall Report = Ending Balance of Prior Period from the Revenue Insight Additions from the Waterfall Report = Contract Liability Additions from RC RotForward Report Example Benefit: Companies are reducing the time to close the books from 15 days to 2 days Billing RollForward Report is reconciling with RC RollForward Report and Revenue Insight Report Source: Zuora zuora#47Collect: Significant Customer ROI Driving Material Attach Rate Opportunities for New and Existing Customers New Al application powered by Zuora Central Platform • Most robust training dataset in the Subscription Economy Massive ROI in an application that pays for itself Easily attach new application with one click deployments =zuora C 70.3% RECOVERY RATE Customer Groups High Volume Customers All Remaining Customers 47 Example Benefit: Companies are recovering up to 20% more revenue Source: Zuora $25642 ACME Industries, me. Tenant 101 * Looking for something? Search for it here © 2.0 DAYS RECOVERED Response Codes and Groups Recovery Rate 75.2% Average Days Outstanding 13 Average Number of Attempte 11 Recovery Rate: 39.33 Average Number of Attempts: 1 Group Pub Dedee Cick card to manage customer grus Responses Grouped by Code Type Funds Collected De 1.3 ATTEMPTS Description Success Successful payment gateway responses Gateway responses which should NOT be retried such as canceled ex, fraud card Gateway responses which should be retried such as insufficient funds Decline or other temporary declines, which may have a chance of succeeding on future em System Gateway system errors resulting from the gateway being down or Click and to manage your response codes Codes by Customer Croup So Decline Sp zuora#4848 48 80 Zuora Central Platform Should Reduce Deployment Time for Every Application months -63% FY22 Objectives* -83% +67% 3 months 6 months 3 1 month months 1 month Billing + Revenue Revenue Collect Source: Zuora *FY22 Objectives are based upon current expectations and available information. Actual results may differ from expectations. zuora#4949 49 Our Multi-Product Strategy Unlocks Multiple Land and Expand Opportunities Billing: Volume Billing: Advanced Billing: Volume Billing: Base Revenue: SSP Revenue: Volume Revenue: Base Collect: Al Collect: Base Platform: Analytics Platform: Sandbox Platform: Workflow Central Platform zuora#5050 50 Product Strategy Creates Three Durable Growth Vectors Drive Upsell Growth 2 1 Expand Market Penetration of Beachheads Billing Revenue 3 Central Platform Collect Future Cross-sell New Products zuora#5151 New Product Strategy From best-in-class, back-office applications to a platform that drives business transformation. Back-Office Applications Platform for 2 Business Transformation ო Product Investments Central Platform powers the entire subscription experience Products purpose-built with subscription as the fulcrum Delivering faster time-to-value Multi-product portfolio unlocking multiple land and expand vectors Zuora#52Customer Interview Velchamy Sankarlingam President of Product and Engineering, Zoom Video Communications }} 3 zuora#53Go to Market Robbie Traube, Chief Revenue Officer zuora#5426 OF FORTUNE 100 powered by Zuora Our Track Record Gives Us Unparalleled Access to the C-suite 8 OF TOP 10 AUTO MANUFACTURERS 21 MAJOR NEWSPAPER PUBLISHING GROUPS powered by Zuora powered by Zuora 600+ INNOVATORS IN HIGH TECH powered by Zuora box Veeva DocuSign zendesk ▲ AUTODESK SIEMENS Healthineers DAIMLER XPLORNET (((SiriusXM))) SATELLITE RADIO vmware zoom ROGERS NCR CenturyLink™ Ford theguardian KIA Zillow MICRO MICRO PHILIPS NUTANIX nest RICOH Vonage BRIGGS & STRATTON ➤ poly CAT GM The Seattle Times Schneider FCɅ ☑ FT FINANCIAL TIMES HYUNDAI Electric sage Bobcat HBO NORDIC AVAYA Alcatel-Lucent 54 Zuora#5555 55 An Evolution in Our Approach to GTM We've made significant investments in our GTM motion to execute against the opportunity. GTM Investments Right Organization Sell Applications Lead Enterprise Transformation 2 Right Focus 3 Right Partners Right Expertise zuora#5656 99 We've Set Up Our GTM to Drive Enterprise Growth at Scale High Tech Company $130K of Billing ARR Oct. 2015 of Volume Contracted Ramp New Product: Zuora Collect Additional Volume 2017 2016-2017 Purchased 2018-2019 Add-on Modules Platform Upgrades Sep. 2018 Oct. 2019 Additional Tenant Purchased Jan. 2021 $3.9M of Total ARR April 2021 Media Provider Initial Sale $100K of Billing ARR April 2015 Initial Sale Energy Services Company $150K of Billing ARR April 2016 Initial Sale 30x ARR Expansion New Product: Zuora Collect Additional Volume Add-on Modules 2015-2021 New Product: Zuora Revenue Dec. 2019 Purchased 2015-2021 24x ARR Expansion Additional Volume Purchased 2016-2021 Additional Revenue Volume Purchased Dec. 2020 8.5x ARR Expansion Source: Zuora Today Additional Tenants and Platform Upgrades 2015-2021 $2.4M of Total ARR April 2021 Today Add-on Modules 2016-2021 $1.3M of Total ARR April 2021 Today zuora#571 Land Our Product Investments Unlock Multiple Land and Expand Strategies Transform Expand 2 Drive Upsell Growth 1 Expand Market Penetration of Beachheads Billing Revenue Central Platform Collect Future 3 Cross-sell New Products zuora#581 New Organization Designed to Land, Transform, Expand Restructured the organization, with new functions, supporting enterprise customer lifecycle. Account Executive Resource Quarterback & POC 2 Customer Success Manager Primary client satisfaction and experience resource Sales Engineer Technical pre-sales support, demos, new product add-ons Оо Revenue Advisor Technical pre-sales accountant expert for complex revenue recognition Land Transform Expand Client Manager Primary Global Services contact for proposal, SOW, implementation and GSI engagement Customer ов Customer Success Architect Technical expert that provides tailored solutioning, best practices guidance, architectural advice to prospects and customers SSG Strategist Industry expert and evangelist that provides thought leadership on use cases, supports ROI building Regional Alliance Manager Focused on implementation success and partner relationships zuora#59Reducing Churn with a Customer-centric Organization and a Focus on the Best-fit Market Segments 1 Land Transform Expand More Support Reduces Churn by 67% Better Fit Reduces Churn by 70% Customers with dedicated customer support resources churn significantly less than those without Larger and mid-sized customers churn significantly less than smaller customers Source: Zuora zuora#602 Strategic Segment Focus Focus on Key Verticals and Segments Igniting Growth Allows more efficient pipeline creation and higher win rates. HIGH TECH zoom NUTANIX zendesk vmware gm FT Vertical Focus MANUFACTURING Ford CAT Honeywell FINANCIAL TIMES MEDIA The Gin dian HBO DA ZN NORDIC FY21 YOY Pipeline Growth* FY21 YOY Win Rate in $100k+ Customers* 80+% +400 bps *Source: Zuora zuora#61Playbook that We Expect will Scale to Other Sectors Over Time Today HIGH TECH zoom NUTANIX zendesk vmware gm MANUFACTURING Ford CAT Honeywell MEDIA Tomorrow FINSERV eMoney EY Building a better working world RETAIL/MEMBERSHIP SONOS RESY GAIA FT FINANCIAL The TIMES Guardian HBO NORDIC DA ZN SIEMENS Healthineers 2 Strategic Segment Focus HEALTHCARE Canon CANON MEDICAL Parachute Health zuora#62Making Alliances Programmatic to Adding Scale & Accelerating Growth How Sls Enhance Our Capabilities Source new opportunities & accelerate deals Develop joint product solutions Provide robust product delivery GLOBAL SYSTEM INTEGRATORS accenture Deloitte. IBM pwc T wipro EY Capgemini TATA Infosys Bring deep industry expertise Support transformation of professional services organization VASS [CLARASYS ] ✓ REPLY Alliances 3 Scale & Acceleration REGIONAL SYSTEM INTEGRATORS RSM G CONNOR GROUP EI-TECHNOLOGIES A Cognizant Company RevGurus G Effectus Group DX DXC.technology Syntheais slalom >keylight/ CFGI Valuein ESTUATE Subscription Factory zuora#63Partners Provide New Access, Accelerating Growth "Transformation" mission closely aligned with GSI needs. Partner Traction Working Example FY'21 Partner Primed Projects Partners supported 80% of Q4'21 deals* More partner primed deals in Q4'21 than all of FY'20 combined* Multiple joint solutions now in market NUTANIX illy SNCF BRIDGESTONE Johnson Controls Honeywell Alliances 3 Scale & Acceleration *Source: Zuora zuora#64Zuora GS Delivers End-to-End Deployment Today Allows Zuora to Scale without Adding Services Expense Zuora GS Organization becomes more focused, expert services arm. SI Partner Zuora GS FY21 FY23E* FY22E* FY24E* PS Forecast Revenue Zuora GS Delivers Predominantly Expert Services to the Sls 3 Alliances Scale & Acceleration zuora *Forecasts are Zuora's estimates based upon current expectation and available information. Actual results may differ from expectations.#65SI Partnership Strategy Scaling Quickly Q4FY21 results reflect an inflection point that will accelerate going forward. Partner Sourced Pipeline, 2x QoQ Growth Q4 over Q3 Partner Influenced Bookings, 2x QoQ Growth Q4 over Q3 Q1 21 Q2 21 Q3 21 Q4 21 Q1 21 Q4 Q2 21 Q3 21 21 Alliances 3 Scale & Acceleration Certified Partner Consultants: 0 100+ From beginning of 2020 until today. Source: Zuora zuora#66Recurring Revenue Growth Blueprint for 4 Transformation We Have the Blueprint that Drives Transformation Over a decades worth of insight, billions of data points on what works along the journey. Launch Optimize Scale Lead SIEMENS Kayo ☀ CLEAR GM New Relic zoom Launching a brand new subscription business Optimizing to add subscribers and drive growth Scaling up the business with automation Leading the market with platform, data, and ecosystem zuora#674 Recurring Revenue Growth Blueprint for Transformation We Can Engage and Support Anywhere along the Journey We've architected the teams, with tools and knowledge to insert and support at every point. Launch Cy Optimize Enterprise Architecture Offering Design Business Operations Financial Model Subscriber Experience Scale Subscription Discovery-to-sign-up Invoicing and Payments Experience 5 Subscription Delivery & Entitlement 5 Post-subscription Care Omnichannel Capabilities Subscription Personalization 1 5 5 Key Recommendations Lead Effort required by subscribers is slightly above average Inconsistencies noticed across markets (e.g. blank pages on machine plans) Existing self-care portal to access statements Un-enticing monthly email regarding balance loaded amount Some complains on lack of clarity and payment methods offered which leads to lower conversion rates and dissatisfaction Robust fulfillment system ensures timely access Limited experience in digital services bundled with subscription for might create entitlement frictions in the future No "special treatment" for Subscribers FAQS can be further improved or self-service/chatbot support in some markets Inconsistencies between digital and in-store processes: takes too long and suboptimal cx Partner-based transactions (trade/e-trade) is not well covered today Experience lacking recommendations, budge pre-selections zuora#684 =zuora Home Analytics Dashb Dashboard Product Insights Support Customers in Conjunction with GTM Teams and Vertical Blueprints Performance insight direct from product MRR Changes $43,7M New Subscriptions (Last 30 Days) United States [email protected] v ACCOUNT (SUBSCRIPTION SUBSCRIPTION NAME SUBSCRIPTION NITIAL TERM SUBSCRIPTION START DATE 2020-11-14 Vi S-0000003131 $5.000.00 We $5.000.00 2020-11-14 Modem 5-0000003129 12 $1.000.00 Ner 5-0000003130 2000-11-13 SpaceX S-0000003127 12 Month $5000.00 12 Total Subscribers 12.1K 3%- Dec 2020 32% Blueprint for Transformation Net MRR per Product ADO CARD + Applied with proven, repeatable frameworks to each stage and vertical Subscription Strategy Flash Performance Review Ratings are based on a 1-5 Likert scale with 1 representing "very basic" and 5 representing "very strong" Subscriber Experience 3 Offering Design 2 Business Operations C Enterprise Architecture 1 Financial Model 2 Subscription Culture Optimal acquisition of subscribers and consistent delivery of experiences, across any direct and indirect channels Subscription offering is desirable, efficient, usable, useful, reliable, functional, has the relevant pricing and monetization strategies to achieve Nespresso's strategic business objectives while aligning with subscriber's perceived value and journey (e.g. what comes after machine?) Efficient and scalable processes for front and back office subscription key tasks including Billing. Payments, Collections, and Accounting Well-integrated, responsive, fast time-to-market capabilities for subscription experiments to test, learn, iterate, pivot towards scale Confident planning that enables financial control and business model optimization over the levers of growth and profitability Subscriber-centric mindset, adequately staffed teams, mature know-what/how (approaches and methods), along with shift from margin to "value maximization" 2021 Zuera, inc Al Rights Reserved. Zuora zuora#6969 An Evolution in Our Approach to GTM We've made significant investments in our GTM motion to execute against the opportunity. GTM Investments Organization to land, transform, expand Sell Applications Lead Enterprise Transformation Focus on the right 2 customer segments Alliances strategy to drive 3 scale and acceleration A blueprint to guide our customers with our differentiated expertise Zuora#70Partner Interview Matthew Candy Global Managing Partner of IBM iX }} 3 zuora#71Business Model & Financials Todd Mcelhatton, Chief Financial Officer zuora#7272 Key Pillars of Our Growth Strategy Market Vision and Leadership Rapidly expanding TAM in Subscription Cloud Scalable Zuora Central platform driving product- focused ARR expansion Powerful customer economics Superior Execution NDR improvement taking shape o Upsell momentum; lower churn • Sustainable expansion within current base Accelerating new business at large enterprises Favorable services mix expanding gross margin Long-Term Financial Success ● Sustainable topline acceleration Plan to grow subscription revenue • Long-term model delivering "Rule of 40" Zuora#7373 Key Investments Showing Results: Product Investment 1. 2. Central Platform with Analytics launched with new features and functionalities Revenue integration with Zuora Billing Outcome 1. 2. Driving adoption, reason we win larger deals, improves retention, and allows us to monetize add-on capabilities Increased cross-sell opportunity; ⚫differentiates us from ERP and CRM players 3. 3. Released Zuora Collect Al Beachhead to enable customers to improve collection rates on their $57B volume transacted in FY21 zuora#7474 Path to Sustainable Expansion with Current Product Portfolio Drive Upsell Growth Cross-sell To New Products Grow as they Grow Business Unit Expansion Penetration of Advanced Capabilities Revenue to Billing Billing to Revenue Collect to All +$250M Potential within our existing base* +$200M Potential within our existing base* Opportunity to Nearly Triple Current ARR* 3X⚫ Cross-Sell to Existing Base 2X Upsell to Existing Base 1X Existing ARR Source: Zuora *Forecasts are Zuora's estimates based upon current expectation and available information. Actual results may differ from expectations. zuora#75Fueled by Multiple Products that Each Could Be >$100M in ARR Revenue Penetration of customer base 15 75 Billing Revenue Collect Platform BU expansions Cross Sell Advanced features Add-ons Cross Sell Add-ons <10% Cross Sell Advanced features Al/Machine Learning Central Sandbox Analytics Workflow Orchestration AppBuilder USAGE <20% <10% Source: Zuora *Potential are Zuora's estimates based upon current expectations and available information. Actual results may differ from expectations. Zuora#7676 76 104% NDR Improvement Taking Shape 103% 100% 99% 99% Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Source: Zuora 105%+ FY22 Target* *FY22 Target is a Zuora estimate based upon current expectations and available information. Actual results may differ from expectations. zuora#7777 FY2020 Cohort FY2019 Cohort FY2018 Cohort FY2017 Cohort Powerful Customer Economics Customer Cohort ASP (Customers at or > $100k) FY16 FY17 FY18 FY19 FY20 Source: Zuora CAGR 24% 21% 18% 21% FY21 zuora#7878 Powerful Customer Economics Customer Cohort ASP (Top 15 Customers per Cohort) FY2020 Cohort FY2019 Cohort FY2018 Cohort FY2017 Cohort FY16 FY17 FY18 FY19 FY20 Source: Zuora CAGR 30% 29% 23% 22% FY21 zuora#7979 Key Investments Showing Results: GTM Investment Outcome 1. 1. Alliance development & pipeline creation Pipeline up 40% YoY in 2H'FY21 with improved win rates for large accounts 2. Customer success integration with Zuora Billing and improve capabilities 3. Strategic Account Teams 4. Subscribed Strategy Group 2. ⚫upsell growth accelerated to 20% in 3. 4. 2H'FY21 FY21 over FY20 Driving demand from C-level executives seeking out our expertise Churn returned to historical levels and More experienced salesforce driving ~24% productivity improvement in Source: Zuora zuora#80Our SI Partnership Strategy Is Scaling Quickly and Beginning to Show Results Sls are influencing and sourcing new opportunities; generating pipeline Partner Sourced Pipeline 2x QoQ Growth Q4 over Q3 FY21 Partner Influenced Bookings 2x QoQ Growth Q4 over Q3 FY21 Sls are investing in Prime practices FY21 prime SI deals more than doubled over FY20 Sls are investing: increasing the number of Zuora certified consultants Benefits to Zuora • Provide robust product delivery Bring deep industry expertise Global reach • Improve time to go-live Improve overall GMs IBM 80 Deloitte. accenture EY Infosys Capgemini pwc Source: Zuora zuora#8181 Strategy Driving Effective & Scalable Growth Average Bookings/Rep New Business ASP % of Reps Meeting Quota 700 bps Win Rate >$100K ACV +400 bps FY20 FY21 FY20 FY21 FY20 FY21 FY20 FY21 Source: Zuora zuora#8282 32 Growing New Business at Large Enterprises FY19 New Business ASP +2%* +23% FY20 FY21 Source: Zuora zuora#8383 Gross Margin Leverage Professional Services Subscription Gross Margin* Blended Gross Margin* (% of Total Revenue) -940 bps +190 bps +790 bps 30% 25% 20% 77% 78% 79% 55% 57% 63% FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 Source: Zuora *Presented on a non-GAAP basis. Refer to the Appendix for a reconciliation of these non-GAAP measures. zuora#8484 Strong Balance Sheet Cash & Short-Term Investment $187M Total Debt FY21A $6M Capital Allocation Strategy FCF positive on an annual basis going forward Continued organic investment in the business Significant cash position and minimal debt provide flexibility to pursue opportunistic acquisitions to further product roadmap Capex (FY21 Total) $12M Source: Zuora zuora#8585 88 Total Revenue Growth Historical Financial Performance FY17A** FY18A** FY19A FY20A FY21A 23% 51% 37% 17% 11% Subscription Revenue Growth 32% 36% 35% 25% 17% Non-GAAP Subscription 76% 78% 77% 78% 79% Gross Margin* Total Non-GAAP Gross Margin* 59% 57% 55% 57% 63% Non-GAAP Operating Margin* (32%) (16%) (18%) (15%) (4%) Free Cash Flow Margin* (25%) (17%) (16%) (9%) (0%) Source: Zuora *Refer to the Appendix for a reconciliation of these non-GAAP measures. **Zuora restated FY18, FY19 and FY20 financial data upon adoption of ASC 606 in FY20. FY16 and FY17 data remain under ASC 605. zuora#8686 98 FY22 and FY25 Financial Targets FY21A FY22E* FY25E* Subscription Revenue Growth 17% 12% - 14% 25%+ Professional Services 21% 18% -19% <15% (as a % of Total Revenue) Non-GAAP Subscription 79% 80% 82%+ Gross Margin** Non-GAAP Operating Margin** (4%) (4%) - (2%) 10%+ Free Cash Flow Margin* ** (0%) 0% - 4% 10% - 15% Source: Zuora *Forecasts are Zuora estimates, based upon current expectations and available information. Actual results may differ from expectations. **Refer to the Appendix for a reconciliation of these non-GAAP measures. zuora#8740 87 Introduction of New KPIs to Track Progress Metric Definition FY21A FY22E* FY25E* Current period annualized value ARR Growth of all subscription contracts compared to same period of prior year 12% 17% 25%-30% Net Dollar Retention Current period ARR compared to prior year's ARR from existing customers 100% 105%+ 112%-115% Rule of 40 Sum of subscription revenue growth rate + free cash flow margin (YoY) 17% 15%+ 40%+ Source: Zuora *Forecasts are Zuora estimates, based upon current expectations and available information. Actual results may differ from expectations. zuora#8888 88 Zuora Investment Highlights FY25 Objectives Large and Growing Opportunity Zuora is Recognized as the Clear Leader New, Seasoned Senior Management Team Lead Enterprise Transformation Accelerate ARR Growth to 25-30% 2 NDR of 112-115% GTM Initiatives Driving Adoption and Expansion Attractive Gross Margins, Improving Operating Leverage Achieve the 3 Rule of 40 zuora#89Q & A zuora#90Thank you. }} 順#91Appendix }} 順#92RECONCILIATION OF NON-GAAP (Dollars in Thousands) GAAP subscription revenue GAAP total revenue FY17 FY18 FY19 FY20 FY21 $89,836 $113,008 $122,482 $171,106 $164,805 $206,555 $234,989 $276,057 $242,340 $305,420 GAAP cost of subscription revenue $22,840 $31,077 $42,993 $53,036 $58,808 Subtract: Stock-based compensation expense (326) (747) (1,967) (2,772) (4,849) Amortization of acquired intangibles (715) (2,056) (2,250) (1,776) (1,692) Internal-use software (520) (1,134) (1,286) (2,560) (1,781) New headquarters costs Non-GAAP cost of subscription revenue $21,279 $27,140 $37,490 (75) $45,853 $50,486 $64,846 $91,200 $118,399 $141,876 $174,650 Gross profit Add: Stock-based compensation expense 909 2,868 7,867 10,037 Amortization of acquired intangibles 715 2,056 2,250 1,776 520 Internal-use software 1,134 1,260 2,560 14,801 1,692 1,781 New headquarters costs Non-GAAP gross profit $66,990 $97,258 $129,776 169 $156,418 $192,924 GAAP operating loss ($39,033) ($38,078) ($70,417) ($85,665) ($73,862) Add / (Subtract): Stock-based compensation expense Amortization of acquired intangibles Internal-use software 4,383 715 (1,743) 8,990 25,357 2,056 2,250 45,046 1,776 59,283 1,692 8 (962) (1,946) Charitable donations 1,000 (2,428) 1,000 482 New headquarters costs Certain litigation Non-GAAP operating loss Non-GAAP subscription gross margin Non-GAAP gross margin ($35,678) ($27,024) ($42,772) ($40,307) 3,252 ($11,063) Source: Zuora For a more detailed discussion of our Non- GAAP Financial Measures, refer to Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of Zuora's Form 10-K filed with the SEC on March 31, 2021. Forward-looking non-GAAP measures relating to fiscal years 2022 and beyond represent targets and are based on internal forecasts subject to significant uncertainty. We are unable to provide a full reconciliation of such measures to GAAP measures without unreasonable effort as we cannot predict the amount or timing of future GAAP results. In addition, we have not provided reconciliations for ARR Growth, Net Dollar Retention, or the Rule of 40 metrics that are described in this presentation because these metrics do not have comparable GAAP measures. 76% 78% 77% 78% 79% 59% 57% 55% 57% 63% Non-GAAP operating margin (32%) (16%) (18%) (15%) (4%) Net cash (used in) provided by operating activities ($24,975) ($24,776) ($23,581) ($3,590) $11,286 Subtract: Purchases of property and equipment, net of insurance recoveries Free cash flow (3,776) Free cash flow margin ($28,751) (25%) (4,698) (13,412) ($29,474) ($36,993) (17%) (16%) (21,424) ($25,014) (9%) (12,156) ($870) zuora (0%)#93Acronyms ACV Annual Contract Value GSI Global System Integrators AE Account Executive GTM Go-To-Market ΑΙ Artificial Intelligence LTV Lifetime Value ARR Annual Recurring Revenue MRR Monthly Recurring Revenue ASP Average Selling Price NDR Net Dollar Retention CAC Customer Acquisition Cost NPS Net Promoter Score CAGR Compounded Annual Growth Rate P&L Profit and Loss (statement) COGS Cost of Goods Sold POC Proof-of-Concept CSMs Customer Success Managers QoQ Quarter over Quarter FCF Free Cash Flow ROI Return-on-Investment FY Fiscal Year R&D Research and Development G&A General and Administrative SI System Integrators GAAP Generally Accepted Accounting Principles TAM Total Addressable Market GS Global Services YOY Year over Year 33 93 zuora