0001423774--01-312024Q2falseP3Y45743645744200014237742023-02-012023-07-310001423774us-gaap:CommonClassAMember2023-07-31xbrli:shares0001423774us-gaap:CommonClassBMember2023-07-3100014237742023-07-31iso4217:USD00014237742023-01-310001423774us-gaap:CommonClassAMember2023-01-310001423774us-gaap:CommonClassBMember2023-01-310001423774us-gaap:SubscriptionAndCirculationMember2023-05-012023-07-310001423774us-gaap:SubscriptionAndCirculationMember2022-05-012022-07-310001423774us-gaap:SubscriptionAndCirculationMember2023-02-012023-07-310001423774us-gaap:SubscriptionAndCirculationMember2022-02-012022-07-310001423774us-gaap:TechnologyServiceMember2023-05-012023-07-310001423774us-gaap:TechnologyServiceMember2022-05-012022-07-310001423774us-gaap:TechnologyServiceMember2023-02-012023-07-310001423774us-gaap:TechnologyServiceMember2022-02-012022-07-3100014237742023-05-012023-07-3100014237742022-05-012022-07-3100014237742022-02-012022-07-31iso4217:USDxbrli:shares0001423774us-gaap:CommonClassAMemberus-gaap:CommonStockMember2023-01-310001423774us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-01-310001423774us-gaap:AdditionalPaidInCapitalMember2023-01-310001423774us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-310001423774us-gaap:RetainedEarningsMember2023-01-310001423774us-gaap:CommonClassAMemberus-gaap:CommonStockMember2023-02-012023-07-310001423774us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-02-012023-07-310001423774us-gaap:AdditionalPaidInCapitalMember2023-02-012023-07-310001423774us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-02-012023-07-310001423774us-gaap:RetainedEarningsMember2023-02-012023-07-310001423774us-gaap:CommonClassAMemberus-gaap:CommonStockMember2023-07-310001423774us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-07-310001423774us-gaap:AdditionalPaidInCapitalMember2023-07-310001423774us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-310001423774us-gaap:RetainedEarningsMember2023-07-310001423774us-gaap:CommonClassAMemberus-gaap:CommonStockMember2023-04-300001423774us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-04-300001423774us-gaap:AdditionalPaidInCapitalMember2023-04-300001423774us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-300001423774us-gaap:RetainedEarningsMember2023-04-3000014237742023-04-300001423774us-gaap:CommonClassAMemberus-gaap:CommonStockMember2023-05-012023-07-310001423774us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-05-012023-07-310001423774us-gaap:AdditionalPaidInCapitalMember2023-05-012023-07-310001423774us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-05-012023-07-310001423774us-gaap:RetainedEarningsMember2023-05-012023-07-310001423774us-gaap:CommonClassAMemberus-gaap:CommonStockMember2022-01-310001423774us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-01-310001423774us-gaap:AdditionalPaidInCapitalMember2022-01-310001423774us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-310001423774us-gaap:RetainedEarningsMember2022-01-3100014237742022-01-310001423774us-gaap:CommonClassAMemberus-gaap:CommonStockMember2022-02-012022-07-310001423774us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-02-012022-07-310001423774us-gaap:AdditionalPaidInCapitalMember2022-02-012022-07-310001423774us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-02-012022-07-310001423774us-gaap:RetainedEarningsMember2022-02-012022-07-310001423774us-gaap:CommonClassAMemberus-gaap:CommonStockMember2022-07-310001423774us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-07-310001423774us-gaap:AdditionalPaidInCapitalMember2022-07-310001423774us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-310001423774us-gaap:RetainedEarningsMember2022-07-3100014237742022-07-310001423774us-gaap:CommonClassAMemberus-gaap:CommonStockMember2022-04-300001423774us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-04-300001423774us-gaap:AdditionalPaidInCapitalMember2022-04-300001423774us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-300001423774us-gaap:RetainedEarningsMember2022-04-3000014237742022-04-300001423774us-gaap:CommonClassAMemberus-gaap:CommonStockMember2022-05-012022-07-310001423774us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-05-012022-07-310001423774us-gaap:AdditionalPaidInCapitalMember2022-05-012022-07-310001423774us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-05-012022-07-310001423774us-gaap:RetainedEarningsMember2022-05-012022-07-310001423774us-gaap:USTreasuryAndGovernmentMember2023-07-310001423774us-gaap:CorporateDebtSecuritiesMember2023-07-310001423774us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember2023-07-310001423774us-gaap:USTreasuryAndGovernmentMember2023-01-310001423774us-gaap:CorporateDebtSecuritiesMember2023-01-310001423774us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember2023-01-310001423774us-gaap:ForeignGovernmentDebtSecuritiesMember2023-01-310001423774srt:MaximumMember2023-07-310001423774us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-07-310001423774us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-07-310001423774us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-07-310001423774us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-07-310001423774us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasuryBillSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:USTreasuryBillSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasuryBillSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:USTreasuryBillSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2023-07-310001423774us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2023-07-310001423774us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2023-07-310001423774us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2023-07-310001423774us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-07-310001423774us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-07-310001423774us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-07-310001423774us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-07-310001423774us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:WarrantMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:WarrantMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:WarrantMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:WarrantMemberus-gaap:FairValueMeasurementsRecurringMember2023-07-310001423774us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-01-310001423774us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-01-310001423774us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-01-310001423774us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-01-310001423774us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2023-01-310001423774us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2023-01-310001423774us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2023-01-310001423774us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasuryAndGovernmentMember2023-01-310001423774us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-01-310001423774us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-01-310001423774us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-01-310001423774us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2023-01-310001423774us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMemberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:ForeignGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:ForeignGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:ForeignGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:ForeignGovernmentDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:WarrantMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:WarrantMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:WarrantMemberus-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:WarrantMemberus-gaap:FairValueMeasurementsRecurringMember2023-01-310001423774us-gaap:WarrantMember2023-01-310001423774us-gaap:WarrantMember2023-02-012023-07-310001423774us-gaap:WarrantMember2023-07-310001423774zuo:Notes2029InitialNotesMemberus-gaap:ConvertibleDebtMember2023-07-310001423774zuo:ComputerSoftwareMember2023-07-310001423774zuo:ComputerSoftwareMember2023-01-310001423774us-gaap:LeaseholdImprovementsMember2023-07-310001423774us-gaap:LeaseholdImprovementsMember2023-01-310001423774us-gaap:ComputerEquipmentMember2023-07-310001423774us-gaap:ComputerEquipmentMember2023-01-310001423774us-gaap:FurnitureAndFixturesMember2023-07-310001423774us-gaap:FurnitureAndFixturesMember2023-01-310001423774us-gaap:SoftwareDevelopmentMember2023-05-012023-07-310001423774us-gaap:SoftwareDevelopmentMember2022-05-012022-07-310001423774us-gaap:SoftwareDevelopmentMember2023-02-012023-07-310001423774us-gaap:SoftwareDevelopmentMember2022-02-012022-07-310001423774us-gaap:SoftwareDevelopmentMember2023-07-310001423774us-gaap:SoftwareDevelopmentMember2023-01-310001423774us-gaap:DevelopedTechnologyRightsMember2023-07-310001423774us-gaap:CustomerRelationshipsMember2023-07-310001423774us-gaap:TradeNamesMember2023-07-310001423774us-gaap:DevelopedTechnologyRightsMember2023-01-310001423774us-gaap:CustomerRelationshipsMember2023-01-310001423774us-gaap:TradeNamesMember2023-01-310001423774srt:MinimumMember2023-02-012023-07-310001423774srt:MaximumMember2023-02-012023-07-310001423774zuo:FederalClassActionMember2023-01-312023-01-310001423774zuo:StateClassActionMember2023-01-312023-01-310001423774zuo:Notes2029InitialNotesMemberus-gaap:ConvertibleDebtMember2022-03-240001423774zuo:Notes2029AdditionalNotesMemberus-gaap:ConvertibleDebtMember2022-03-240001423774zuo:WarrantsSilverLakeMember2022-03-240001423774zuo:Notes2029Memberus-gaap:ConvertibleDebtMember2022-03-242022-03-24xbrli:pure0001423774zuo:Notes2029Memberus-gaap:ConvertibleDebtMember2022-03-240001423774zuo:Notes2029InitialNotesMemberus-gaap:ConvertibleDebtMember2022-03-242022-03-24zuo:converted_share0001423774zuo:Notes2029InitialNotesMemberus-gaap:ConvertibleDebtMember2023-01-310001423774zuo:Notes2029InitialNotesMemberus-gaap:ConvertibleDebtMember2023-05-012023-07-310001423774zuo:Notes2029InitialNotesMemberus-gaap:ConvertibleDebtMember2022-05-012022-07-310001423774zuo:Notes2029InitialNotesMemberus-gaap:ConvertibleDebtMember2023-02-012023-07-310001423774zuo:Notes2029InitialNotesMemberus-gaap:ConvertibleDebtMember2022-02-012022-07-310001423774zuo:FirstCitizenBankTrustCompanyMemberus-gaap:RevolvingCreditFacilityMember2023-07-310001423774zuo:FirstCitizenBankTrustCompanyMemberus-gaap:PrimeRateMember2023-02-012023-07-3100014237742023-08-012023-07-310001423774country:US2023-05-012023-07-310001423774country:US2022-05-012022-07-310001423774country:US2023-02-012023-07-310001423774country:US2022-02-012022-07-310001423774us-gaap:NonUsMember2023-05-012023-07-310001423774us-gaap:NonUsMember2022-05-012022-07-310001423774us-gaap:NonUsMember2023-02-012023-07-310001423774us-gaap:NonUsMember2022-02-012022-07-310001423774us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:US2023-05-012023-07-310001423774us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:US2022-05-012022-07-310001423774us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:US2023-02-012023-07-310001423774us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMembercountry:US2022-02-012022-07-310001423774us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:NonUsMember2023-05-012023-07-310001423774us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:NonUsMember2022-05-012022-07-310001423774us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:NonUsMember2023-02-012023-07-310001423774us-gaap:GeographicConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:NonUsMember2022-02-012022-07-310001423774srt:MinimumMember2023-07-31zuo:extension_option0001423774us-gaap:StandbyLettersOfCreditMemberzuo:OperatingLeaseAgreementMember2023-07-310001423774us-gaap:StandbyLettersOfCreditMemberzuo:OperatingLeaseAgreementMember2023-01-310001423774zuo:PutativeSecuritiesClassActionMember2020-04-012020-05-31zuo:lawsuit0001423774zuo:PutativeSecuritiesClassActionMember2020-07-012020-07-310001423774zuo:FederalClassActionMember2023-03-012023-03-310001423774zuo:StateClassActionMember2023-06-012023-06-300001423774zuo:PutativeSecuritiesClassActionMember2023-07-310001423774zuo:PutativeSecuritiesClassActionMember2023-01-310001423774zuo:PutativeSecuritiesClassActionMember2023-02-012023-07-310001423774zuo:StockholderDerivativeLawsuitsCaliforniaMember2019-09-012019-09-300001423774zuo:StockholderDerivativeLawsuitsCaliforniaMember2020-02-012020-02-290001423774zuo:StockholderDerivativeLawsuitsDistrictOfDelawareMember2020-05-012020-06-300001423774zuo:StockholderDerivativeLawsuitsDistrictOfDelawareMember2020-06-012020-06-300001423774zuo:StockholderDerivativeLawsuitsDelawareChanceryCourtMember2021-02-012021-03-3100014237742023-02-012023-02-280001423774zuo:CloudComputingServiceMember2023-07-31zuo:vendorzuo:vote0001423774us-gaap:AccumulatedTranslationAdjustmentMember2023-01-310001423774us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-01-310001423774us-gaap:AccumulatedTranslationAdjustmentMember2023-02-012023-07-310001423774us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-02-012023-07-310001423774us-gaap:AccumulatedTranslationAdjustmentMember2023-07-310001423774us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-07-310001423774us-gaap:CommonClassAMemberzuo:TwoThousandAndEighteenEquityIncentivePlanMember2023-07-310001423774zuo:TwoThousandSixAndTwoThousandFifteenPlanMemberzuo:EmployeeStockOptionAndRestrictedStockUnitRSUMember2023-07-3100014237742022-02-012023-01-310001423774us-gaap:RestrictedStockUnitsRSUMember2023-01-310001423774us-gaap:RestrictedStockUnitsRSUMember2023-02-012023-07-310001423774us-gaap:RestrictedStockUnitsRSUMember2023-07-310001423774srt:MinimumMemberus-gaap:PerformanceSharesMember2023-07-31zuo:tranche0001423774srt:MaximumMemberus-gaap:PerformanceSharesMember2023-07-310001423774us-gaap:PerformanceSharesMember2023-02-012023-04-300001423774us-gaap:PerformanceSharesMember2023-01-310001423774us-gaap:PerformanceSharesMember2023-02-012023-07-310001423774us-gaap:PerformanceSharesMember2023-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMember2023-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMember2023-02-012023-07-31zuo:purchase_period0001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMember2023-05-012023-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMember2023-02-012023-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMember2022-05-012022-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMember2022-02-012022-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMembersrt:MinimumMember2023-02-012023-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMembersrt:MinimumMember2023-05-012023-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMembersrt:MaximumMember2023-02-012023-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMembersrt:MaximumMember2023-05-012023-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMembersrt:MinimumMember2022-05-012022-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMembersrt:MinimumMember2022-02-012022-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMembersrt:MaximumMember2022-02-012022-07-310001423774zuo:TwoThousandAndEighteenEmployeeStockPurchasePlanMembersrt:MaximumMember2022-05-012022-07-310001423774zuo:CostOfSubscriptionRevenuesMember2023-05-012023-07-310001423774zuo:CostOfSubscriptionRevenuesMember2022-05-012022-07-310001423774zuo:CostOfSubscriptionRevenuesMember2023-02-012023-07-310001423774zuo:CostOfSubscriptionRevenuesMember2022-02-012022-07-310001423774zuo:CostOfProfessionalServicesRevenueMember2023-05-012023-07-310001423774zuo:CostOfProfessionalServicesRevenueMember2022-05-012022-07-310001423774zuo:CostOfProfessionalServicesRevenueMember2023-02-012023-07-310001423774zuo:CostOfProfessionalServicesRevenueMember2022-02-012022-07-310001423774us-gaap:ResearchAndDevelopmentExpenseMember2023-05-012023-07-310001423774us-gaap:ResearchAndDevelopmentExpenseMember2022-05-012022-07-310001423774us-gaap:ResearchAndDevelopmentExpenseMember2023-02-012023-07-310001423774us-gaap:ResearchAndDevelopmentExpenseMember2022-02-012022-07-310001423774us-gaap:SellingAndMarketingExpenseMember2023-05-012023-07-310001423774us-gaap:SellingAndMarketingExpenseMember2022-05-012022-07-310001423774us-gaap:SellingAndMarketingExpenseMember2023-02-012023-07-310001423774us-gaap:SellingAndMarketingExpenseMember2022-02-012022-07-310001423774us-gaap:GeneralAndAdministrativeExpenseMember2023-05-012023-07-310001423774us-gaap:GeneralAndAdministrativeExpenseMember2022-05-012022-07-310001423774us-gaap:GeneralAndAdministrativeExpenseMember2023-02-012023-07-310001423774us-gaap:GeneralAndAdministrativeExpenseMember2022-02-012022-07-310001423774us-gaap:EmployeeStockOptionMember2023-07-310001423774us-gaap:EmployeeStockOptionMember2023-02-012023-07-310001423774zuo:WarrantsTrancheOneMemberzuo:WarrantsSilverLakeMember2022-03-240001423774zuo:WarrantsSilverLakeMemberzuo:WarrantsTrancheTwoMember2022-03-240001423774zuo:WarrantsTrancheThreeMemberzuo:WarrantsSilverLakeMember2022-03-240001423774zuo:WarrantsSilverLakeMember2022-03-242022-03-240001423774zuo:WarrantsSilverLakeMember2023-07-310001423774us-gaap:WarrantMemberus-gaap:MeasurementInputSharePriceMember2023-07-310001423774us-gaap:WarrantMemberus-gaap:MeasurementInputSharePriceMember2022-03-240001423774us-gaap:WarrantMembersrt:MinimumMemberus-gaap:MeasurementInputExercisePriceMember2023-07-310001423774us-gaap:WarrantMemberus-gaap:MeasurementInputExercisePriceMembersrt:MaximumMember2023-07-310001423774us-gaap:WarrantMembersrt:MinimumMemberus-gaap:MeasurementInputExercisePriceMember2023-01-310001423774us-gaap:WarrantMemberus-gaap:MeasurementInputExercisePriceMembersrt:MaximumMember2023-01-310001423774us-gaap:WarrantMemberus-gaap:MeasurementInputPriceVolatilityMember2023-07-310001423774us-gaap:WarrantMemberus-gaap:MeasurementInputPriceVolatilityMember2022-03-240001423774us-gaap:WarrantMemberus-gaap:MeasurementInputExpectedTermMember2023-07-310001423774us-gaap:WarrantMemberus-gaap:MeasurementInputExpectedTermMember2022-03-240001423774us-gaap:MeasurementInputRiskFreeInterestRateMemberus-gaap:WarrantMember2023-07-310001423774us-gaap:MeasurementInputRiskFreeInterestRateMemberus-gaap:WarrantMember2022-03-240001423774us-gaap:WarrantMemberus-gaap:MeasurementInputExpectedDividendRateMember2023-07-310001423774us-gaap:WarrantMemberus-gaap:MeasurementInputExpectedDividendRateMember2022-03-240001423774us-gaap:WarrantMemberus-gaap:MeasurementInputSharePriceMember2023-07-312023-07-310001423774us-gaap:WarrantMemberus-gaap:MeasurementInputSharePriceMember2023-01-312023-01-310001423774zuo:WarrantsSilverLakeMember2023-05-012023-07-310001423774zuo:WarrantsSilverLakeMember2022-05-012022-07-310001423774zuo:WarrantsSilverLakeMember2023-02-012023-07-310001423774zuo:WarrantsSilverLakeMember2022-02-012022-07-310001423774us-gaap:RestrictedStockUnitsRSUMember2023-02-012023-07-310001423774us-gaap:RestrictedStockUnitsRSUMember2022-02-012022-07-310001423774us-gaap:ConvertibleDebtSecuritiesMember2023-02-012023-07-310001423774us-gaap:ConvertibleDebtSecuritiesMember2022-02-012022-07-310001423774us-gaap:WarrantMember2023-02-012023-07-310001423774us-gaap:WarrantMember2022-02-012022-07-310001423774us-gaap:EmployeeStockOptionMember2023-02-012023-07-310001423774us-gaap:EmployeeStockOptionMember2022-02-012022-07-310001423774us-gaap:PerformanceSharesMember2023-02-012023-07-310001423774us-gaap:PerformanceSharesMember2022-02-012022-07-310001423774zuo:EmployeeStockPurchasePlanMember2023-02-012023-07-310001423774zuo:EmployeeStockPurchasePlanMember2022-02-012022-07-310001423774zuo:RobertJETraubeMember2023-02-012023-07-310001423774zuo:RobertJETraubeMember2023-05-012023-07-310001423774zuo:RobertJETraubeTradingArrangementClassACommonStockMemberzuo:RobertJETraubeMember2023-07-310001423774zuo:RobertJETraubeTradingArrangementClassACommonStockRSUsVestedMemberzuo:RobertJETraubeMember2023-07-310001423774zuo:RobertJETraubeMemberzuo:RobertJETraubeTradingArrangementClassACommonStockPSUsVestedMember2023-07-310001423774zuo:AndrewCohenMember2023-02-012023-07-310001423774zuo:AndrewCohenMember2023-05-012023-07-310001423774zuo:AndrewCohenMemberzuo:AndrewCohenTradingArrangementClassACommonStockMember2023-07-310001423774zuo:AndrewCohenTradingArrangementClassACommonStockRSUsVestedMemberzuo:AndrewCohenMember2023-07-310001423774zuo:AndrewCohenTradingArrangementClassACommonStockPSUsVestedMemberzuo:AndrewCohenMember2023-07-310001423774zuo:ToddMcElhattonMember2023-02-012023-07-310001423774zuo:ToddMcElhattonMember2023-05-012023-07-310001423774zuo:ToddMcElhattonMemberzuo:ToddMcElhattonTradingArrangementClassACommonStockMember2023-07-310001423774zuo:ToddMcElhattonMemberzuo:ToddMcElhattonTradingArrangementClassACommonStockRSUsVestedMember2023-07-310001423774zuo:ToddMcElhattonMemberzuo:ToddMcElhattonTradingArrangementClassACommonStockPSUsVestedMember2023-07-310001423774zuo:TienTzuoMember2023-02-012023-07-310001423774zuo:TienTzuoMember2023-05-012023-07-310001423774zuo:TienTzuoMemberzuo:TienTzuoTradingArrangementClassBCommonStockMember2023-07-310001423774zuo:TienTzuoTradingArrangementClassBCommonStockRSUsVestedMemberzuo:TienTzuoMember2023-07-310001423774zuo:TienTzuoMemberzuo:TienTzuoTradingArrangementClassBCommonStockPSUsVestedMember2023-07-31

(Mark One)

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-38451

_____________________________ 

(Exact name of registrant as specified in its charter)

_____________________________ 

 

Delaware						20-5530976
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

_____________________________ 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name on each exchange on which registered
Class A common stock, par value $0.0001 per share			ZUO			New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒ No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  ☒

As of July 31, 2023, the number of shares of the Registrant’s Class A common stock outstanding was 132.4 million and the number of shares of the Registrant’s Class B common stock outstanding was 8.1 million.

Unless the context otherwise requires, references in this Quarterly Report on Form 10-Q (Form 10-Q) to “Zuora,” “Company,” “our,” “us,” and “we” refer to Zuora, Inc. and, where appropriate, its consolidated subsidiaries. Our fiscal year end is January 31. References to “fiscal” followed by the year refer to the fiscal year ended January 31 for the referenced year.

This Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. All statements contained in this Form 10-Q, other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations, are forward-looking statements. Words such as “believes,” “may,” “will,” “estimates,” “potential,” “continues,” “anticipates,” “intends,” “expects,” “could,” “would,” “projects,” “plans,” “targets,” and variations of such words and similar expressions are intended to identify forward-looking statements.

Forward-looking statements contained in this Form 10-Q include, but are not limited to, statements about our expectations regarding:

•trends in revenue, cost of revenue, and gross margin;

•economic uncertainty and associated trends in macroeconomic conditions, including the effects of recession, inflation, rising interest rates, bank failures and debt ceiling negotiations;

•currency exchange rate fluctuations;

•trends and expectations in our operating and financial metrics, including customers with annual contract value equal to or greater than $250,000, dollar-based retention rate, annual recurring revenue, and growth of and within our customer base;

•future acquisitions, the anticipated benefits of such acquisitions and our ability to integrate the operations and technology of any acquired company, including our acquisition of Zephr Inc Limited (Zephr);

•industry trends, projected growth, or trend analysis, including the shift to subscription business models;

•our investments in our platform and the cost of third-party hosting fees;

•the expansion and functionality of our technology offering, including expected benefits of such products and technology, and our ability to further penetrate our customer base;

•trends in operating expenses, including research and development expense, sales and marketing expense, and general and administrative expense, and expectations regarding these expenses as a percentage of revenue;

•our liquidity being sufficient to meet our working capital and capital expenditure needs for at least the next 12 months;

•the impact of actions that we are taking to improve operational efficiencies and operating costs;

•legal proceedings, including expectations regarding final court approval of the settlement of our shareholder litigation and the receipt of insurance proceeds related to such litigation;

•future issuances of our senior unsecured notes;

•instability in the U.S. and international banking systems; and

•other statements regarding our future operations, financial condition, prospects and business strategies, including our ability to sublease office space at our corporate headquarters in California.

Such forward-looking statements are based on our expectations as of the date of this filing and are subject to a number of risks, uncertainties and assumptions, including but not limited to, risks detailed in the “Risk Factors” section of this Form 10-Q. Readers are urged to carefully review and consider the various disclosures made in this Form 10-Q and in other documents we file from time to time with the Securities and Exchange Commission (SEC) that disclose risks and uncertainties that may affect our business. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and circumstances discussed in this Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance or achievements. In addition, the forward-looking statements in this Form 10-Q are made as of the date of this filing, and we do not undertake, and expressly disclaim any duty, to update such statements for any reason after the date of this Form 10-Q or to conform statements to actual results or revised expectations, except as required by law.

Zuora, Inc. was incorporated in the state of Delaware in 2006 and began operations in 2007. Zuora’s fiscal year ends on January 31. Zuora is headquartered in Redwood City, California.

Zuora provides a cloud-based subscription management platform, built to help companies monetize new services and operate dynamic, recurring revenue business models. Our solution enables companies across multiple industries and geographies to launch, manage and scale a subscription business, automating the quote-to-cash and revenue recognition process, including quoting, billing, collections and revenue recognition, and improving the subscriber experience. With Zuora’s solution, businesses can change pricing and packaging for products and services to grow and scale, efficiently comply with revenue recognition standards, analyze customer data to optimize their subscription offerings, and build meaningful relationships with their subscribers.

On September 2, 2022, Zuora acquired Zephr, a leading subscription experience platform used by global digital publishing and media companies. Additional information regarding the Zephr acquisition is contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023, filed with the Securities and Exchange Commission (SEC) on April 3, 2023 (Annual Report on Form 10-K).

References to “Zuora”, “us”, “our”, or “we” in these notes refer to Zuora, Inc. and its subsidiaries on a consolidated basis.

The accompanying unaudited condensed consolidated financial statements, which include the accounts of Zuora and its wholly owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States (GAAP) and applicable rules and regulations of the SEC regarding interim financial reporting. All intercompany balances and transactions have been eliminated in consolidation.

The unaudited condensed consolidated balance sheet as of January 31, 2023 included herein was derived from the audited financial statements as of that date, but does not include all disclosures including certain notes required by GAAP on an annual reporting basis. The unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the balance sheets, statements of comprehensive loss, statements of cash flows and statements of stockholders' equity for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year ending January 31, 2024 or any future period.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023.

The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements, as well as reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.

Our most significant estimates and assumptions are related to revenue recognition with respect to the determination of the relative standalone selling prices for our services; the expected period of benefit over which deferred commissions are amortized; valuation of stock-based awards and our convertible senior notes and warrants; estimates of allowance for credit losses; estimates of the fair value of goodwill and long-lived assets when evaluating for impairments and for assets acquired from acquisitions; useful lives of intangibles and other long-lived assets; and the valuation of deferred income tax assets and contingencies.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ materially from these estimates under different assumptions or conditions.

Our significant accounting policies are discussed in Note 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements in our Annual Report on Form 10-K. There have been no significant changes to these policies during the six months ended July 31, 2023.

The amortized costs, unrealized gains and losses and estimated fair values of our short-term investments were as follows (in thousands):

			July 31, 2023
			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
U.S. government securities			$	18,617					$	—					$	(46)					$	18,571
Corporate bonds			7,995						—						(18)						7,977
Commercial paper			56,405						—						—						56,405
Total short-term investments			$	83,017					$	—					$	(64)					$	82,953

There were no material realized gains or losses from sales of marketable securities that were reclassified out of accumulated other comprehensive loss into investment income during the three and six months ended July 31, 2023 and 2022. We had no significant unrealized losses on our available-for-sale securities as of July 31, 2023 and January 31, 2023, and we do not expect material credit losses on our current investments in future periods. All securities had stated effective maturities of less than one year as of July 31, 2023.

The accounting guidance for fair value measurements establishes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level input						Input definition
Level 1						Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2						Inputs other than quoted prices included within Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date
Level 3						Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date

In general, and where applicable, we use quoted prices in active markets for identical assets or liabilities to determine fair value. If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, then we use quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable either directly or indirectly.

The following tables summarize our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis (in thousands):

			July 31, 2023
			Level 1						Level 2						Level 3						Total
Cash equivalents:
Money market funds			$	247,500					$	—					$	—					$	247,500
Treasury bills			24,864						—						—						24,864
Total cash equivalents			$	272,364					$	—					$	—					$	272,364
Short-term investments:
U.S. government securities			$	—					$	18,571					$	—					$	18,571
Corporate bonds			—						7,977						—						7,977
Commercial paper			—						56,405						—						56,405
Total short-term investments			$	—					$	82,953					$	—					$	82,953
Liabilities:
Warrant liability			$	—					$	—					$	7,585					$	7,585

Changes in our Level 3 fair value measurements were as follows (in thousands):

Additional information about the Warrant liability, including the fair value inputs, is included in Note 17. Warrants to Purchase Shares of Common Stock.

The carrying amounts of certain financial instruments, including cash held in bank accounts, accounts receivable, accounts payable, and accrued expenses, approximate fair value due to their relatively short maturities.

As of July 31, 2023, the net carrying amount of the Initial Notes, defined in Note 9. Debt, was $214.4 million, and the estimated fair value was $188.5 million. The fair value of the Initial Notes is classified as a Level 3 measurement. Additional information regarding the Initial Notes is included in Note 9. Debt.

Prepaid expenses and other current assets consisted of the following (in thousands):

			July 31, 2023						January 31, 2023
Prepaid software subscriptions			$	7,651					$	7,533
Taxes			4,234						3,860
Prepaid insurance			2,907						3,225
Insurance payments receivable			2,000						2,000
Contract assets			1,964						1,325
Deposits			1,510						1,168
Prepaid hosting costs			902						871
Other			4,956						4,303
Total			$	26,124					$	24,285

Property and equipment, net consisted of the following (in thousands):

			July 31, 2023						January 31, 2023
Software			$	35,520					$	32,778
Leasehold improvements			15,267						15,254
Computer equipment			11,787						11,780
Furniture and fixtures			4,510						3,793
			67,084						63,605
Less: accumulated depreciation and amortization			(41,169)						(36,446)
Total			$	25,915					$	27,159

The following table summarizes the capitalized internal-use software costs included within the Software line item in the table above (in thousands):

			Three Months Ended July 31,												Six Months Ended July 31,
			2023						2022						2023						2022
Internal-use software costs capitalized during the period			$	1,654					$	2,247					$	2,698					$	4,149
															July 31, 2023						January 31, 2023
Total capitalized internal-use software, net of accumulated amortization															$	13,922					$	14,138

The following table summarizes total depreciation and amortization expense related to property and equipment, including amortization of internal-use software, included primarily in General and administrative and Cost of subscription revenue in the accompanying unaudited condensed consolidated statements of comprehensive loss (in thousands):

			Three Months Ended July 31,												Six Months Ended July 31,
			2023						2022						2023						2022
Total depreciation and amortization expense			$	2,444					$	2,186					$	4,982					$	4,367

The following tables summarize the purchased intangible asset balances (in thousands):

Purchased intangible assets are being amortized to Cost of subscription revenue in the accompanying unaudited condensed consolidated statements of comprehensive loss on a straight-line basis over their estimated useful lives ranging from three to ten years. The following table summarizes amortization expense recognized on purchased intangible assets during the periods indicated (in thousands):

Estimated future amortization expense for purchased intangible assets as of July 31, 2023 was as follows (in thousands):

The following table represents the changes to goodwill (in thousands):

Accrued expenses and other current liabilities consisted of the following (in thousands):

			July 31, 2023						January 31, 2023
Litigation settlement1			$	75,500					$	75,000
Warrant liability			7,585						2,829
Accrued taxes			4,802						4,088
Accrued hosting and third-party licenses			4,374						4,374
Accrued outside services and consulting			1,311						3,507
Accrued interest			850						850
Accrued contingent consideration			—						4,420
Other accrued expenses1			4,348						8,610
Total			$	98,770					$	103,678

_____________________________

(1) The litigation settlement accrual of $75.5 million as of July 31, 2023 represents the combined settlement of the federal and state securities class action litigation matters, which are pending final court approval, as compared to $76.0 million accrued as of January 31, 2023, of which $75.0 million was reported in "Litigation settlement" for the federal class action matter, and $1.0 million was reported in "Other accrued expenses" for the state class action matter. Refer to Note 13. Commitments and Contingencies for further information.

On March 24, 2022 (Initial Closing Date), we issued convertible senior notes (Initial Notes) in the aggregate principal amount of $250.0 million pursuant to an investment agreement (Investment Agreement) and indenture agreement (Indenture) to certain entities affiliated with Silver Lake Alpine II, L.P. (Silver Lake). Pursuant to the Investment Agreement, we agreed to issue additional convertible senior notes in the aggregate principal amount of $150.0 million (Additional Notes and together with the Initial Notes, the “2029 Notes”) in September 2023, with an earlier issuance upon our completion of a Material Acquisition that meets the conditions described in Section 2.02(a) of the Investment Agreement. In addition, in the event that a Change in Control (as defined in the Indenture) occurs prior to the Additional Notes being issued, the noteholder would have the right to receive, at the noteholder's election, the Additional Notes, a cash payment, or common stock, as described in Section 2.02(b) of the Investment Agreement. The Initial Notes and the Additional Notes, once issued, represent senior unsecured obligations of Zuora.

As a condition of the Investment Agreement, we also issued warrants to Silver Lake to acquire up to 7.5 million shares of Class A common stock (Warrants). Refer to Note 17. Warrants to Purchase Shares of Common Stock for more information.

The purchase price of the 2029 Notes is 98% of the par value. The 2029 Notes bear interest at a rate of 3.95% per annum, payable quarterly in cash, provided that we have the option to pay interest in kind at 5.50% per annum. The 2029 Notes will mature on March 31, 2029, subject to earlier conversion or repurchase. The Initial Notes are convertible at Silver Lake’s option into shares of our Class A common stock at an initial conversion rate of 50.0 shares per $1,000 principal amount ($20.00 per share, representing 12.5 million shares of Class A common stock), subject to customary anti-dilution adjustments. Any 2029 Notes that are converted in connection with a Make-Whole Fundamental Change (as defined in the Indenture) are subject to an increase in the conversion rate under certain circumstances.

With certain exceptions, upon a Fundamental Change, the holders of the 2029 Notes may require that we repurchase all or part of the principal amount of the 2029 Notes at a purchase price equal to the principal amount and accrued but unpaid interest outstanding, plus the total sum of all remaining scheduled interest payments through the remainder of the term of the 2029 Notes, at the 5.50% paid in kind interest rate. At any time on or after the fifth anniversary of the Initial Closing Date, the holders of the 2029 Notes may require that we repurchase all or part of the principal amount of the Notes at a purchase price equal to the principal amount plus accrued interest through the date of repurchase. Upon certain events of default, the 2029 Notes may be declared due and payable (or will automatically become so under certain events of default), at a purchase price equal to the principal amount plus accrued interest through the date of repurchase.

We have no right to redeem the 2029 Notes prior to maturity.

Pursuant to the Investment Agreement, without our prior written consent, Silver Lake is restricted from converting any 2029 Note, exercising any Warrant or transferring any 2029 Note or Warrant to parties other than affiliates or members of Silver Lake (with certain limited exceptions) for 18 months following the Initial Closing Date, or if sooner, upon the consummation of any Change in Control (as defined in the Investment Agreement) or entry into a definitive agreement for a transaction that, if consummated, would result in a Change in Control.

The 2029 Notes debt discount is being amortized using the effective interest rate method over the five year expected life of the 2029 Notes (representing the period from the contract date to the earliest noncontingent put date of May 24, 2027) and reflects an effective interest rate of 8.5%.

The carrying value of the Initial Notes was classified as long-term and consisted of the following (in thousands):

Interest expense related to the Initial Notes, included in Interest expense in the accompanying unaudited condensed consolidated statements of comprehensive loss, was as follows (in thousands):

We have a $30.0 million revolving credit facility, which is currently undrawn, under an agreement (Debt Agreement) with First Citizens Bank & Trust Company (assumed from Silicon Valley Bank). This credit facility matures in October 2025. The interest rate under the credit facility is equal to the prime rate published by the Wall Street Journal minus 1.00%. We had not drawn down any amounts under the facility as of July 31, 2023.

The following table summarizes revenue recognized during the period that was included in the deferred revenue balance at the beginning of each respective period (in thousands):

			Three Months Ended July 31,												Six Months Ended July 31,
			2023						2022						2023						2022
Revenue recognized from deferred revenue			$	79,382					$	77,680					$	126,548					$	115,461

As of July 31, 2023, total remaining non-cancellable performance obligations under our subscription contracts with customers was approximately $507.9 million and we expect to recognize revenue on approximately 58% of these remaining performance obligations over the next 12 months. Remaining performance obligations under our professional services contracts as of July 31, 2023 were not material.

Revenue by country, based on the customer’s address at the time of sale, was as follows (in thousands): 

			Three Months Ended July 31,												Six Months Ended July 31,
			2023						2022						2023						2022
United States			$	69,348					$	64,808					$	134,755					$	124,227
Others			38,700						33,967						76,388						67,747
Total			$	108,048					$	98,775					$	211,143					$	191,974
Percentage of revenue by geographic area:
United States			64		%				66		%				64		%				65		%
Other			36		%				34		%				36		%				35		%

Other than the United States, no individual country exceeded 10% of total revenue for the three and six months ended July 31, 2023 and 2022.

Long-lived assets, which consist of property and equipment, net, deferred commissions, purchased intangible assets, net and operating lease right-of-use assets by geographic location, are based on the location of the legal entity that owns the asset. As of July 31, 2023 and January 31, 2023, no individual country exceeded 10% of total long-lived assets other than the United States.