Zuora SEI Report: Flexible, Recurring Monetization Models Drive 3.4x Faster Growth Rates Than the S&P 500 Over the Past 12 Years
April 09 2024 - 8:00AM
Business Wire
Zuora, Inc. (NYSE: ZUO), a leading monetization suite for modern
business, today released the latest Subscription Economy
Index™(SEI) report, which found that companies in the SEI have
experienced 3.4x faster growth rates than the S&P 500 over the
past 12 years.
In 2023, amid economic challenges and slowed digital
transformations, companies in the SEI demonstrated resilience
through Total Monetization strategies. By aligning and evolving
their monetization models with customer demand, they pursued
innovative approaches beyond traditional subscriptions, including
hybrid and flexible bundling strategies. This agility and customer
focus have driven sustainable growth despite market
uncertainties.
In the latest SEI report, The Subscribed Institute at Zuora®
found:
- Companies in the SEI continue to outpace the S&P
500: In 2023, companies in the SEI experienced a 10.4% revenue
growth rate on average compared to 6% for the S&P 500.
- Customer acquisition slowed, but retention is up: While
customer acquisition slowed in 2023, companies in the SEI are
retaining their customers, with churn numbers lower than the
previous three years.
- Customer expansion, or annual revenue per account (ARPA), is
on an upward trend and slightly improved in 2023: Starting with
a quarterly growth rate of 0.73% in Q1 2023, ARPA growth ended the
year over 2x stronger at 1.76% in Q4. The quarterly average also
improved year-over-year, with 1.5% growth in 2023 compared to 1.29%
in 2022.
- While growth rates slowed in the SaaS sector, churn is down
and consumption-based models are continuing to demonstrate
promising revenue growth: The SEI SaaS sector experienced a
10.1% revenue growth rate on average. The 6-year compound annual
growth rate (CAGR) for SEI SaaS companies employing
consumption-based models reached 20.1% in 2023 compared to 16.3%
for the non-consumption counterparts.
- In the Media & Entertainment sector, the New Media
subset experienced faster revenue growth, but Publishing Media
successfully expanded subscriber count over time: Media &
Entertainment experienced a revenue growth rate of 6% on average in
2023. While the New Media subset experienced a faster revenue
growth rate (12%) than Publishing Media (5.6%), Publishing Media
grew ARPA year-over-year (YoY), while New Media ARPA growth
slowed.
“Staying competitive means embracing agility and flexibility to
incorporate a diverse mix of business models as opposed to a
reliance on any single approach,” said Amy Konary, Senior Vice
President and Founder of The Subscribed Institute at Zuora.
“Companies that are able to evolve their monetization with demand
will be better set up for faster and recurring growth.”
Zuora’s SEI report analyzes the growth and resilience of over
600 recurring revenue businesses based on anonymized, aggregated,
system-generated activity on the Zuora Billing service. The latest
report includes data by sector in SaaS, Media & Entertainment
and Manufacturing, as well as by region in EMEA and APAC.
To read the full report, visit here.
About Zuora, Inc.
Zuora provides a leading monetization suite to build, run and
grow a modern business through a dynamic mix of consumption models,
subscription bundles and everything in between. From pricing and
packaging, to billing, payments and revenue accounting, Zuora’s
flexible, modular software platform is designed to help companies
evolve monetization strategies with customer demand. More than
1,000 customers around the world, including BMC Software, Box,
Caterpillar, General Motors, Penske Media Corporation, Schneider
Electric and Zoom use Zuora’s leading combination of technology and
expertise to turn recurring relationships and recurring revenue
into recurring growth. Zuora is headquartered in Silicon Valley
with offices in the Americas, EMEA and APAC. To learn more, please
visit zuora.com.
Forward-Looking Statements
This report contains forward-looking statements that involve a
number of risks, uncertainties, and assumptions, including but not
limited to statements regarding the expected growth and trends of
recurring revenue-based companies, such as subscriptions (including
companies in the SEI report) and non-recurring revenue based
companies. Any statements that are not statements of historical
fact may be deemed to be forward-looking statements, and actual
results could differ materially from those stated or implied in
forward-looking statements. This report also includes market data
and certain other statistical information and estimates from
industry analysts and/or market research firms. Zuora believes
these third party reports to be reputable, but has not
independently verified the underlying data sources, methodologies,
or assumptions. Information that is based on estimates, forecasts,
projections, market research, or similar methodologies is
inherently subject to uncertainties and may differ materially from
actual events or circumstances.
© 2024 Zuora, Inc. All Rights Reserved. Zuora, Subscribed,
Subscription Economy, Powering the Subscription Economy,
Subscription Economy Index, Zephr, and Subscription Experience
Platform are trademarks or registered trademarks of Zuora, Inc.
Third party trademarks mentioned above are owned by their
respective companies. Nothing in this press release should be
construed to the contrary, or as an approval, endorsement or
sponsorship by any third parties of Zuora, Inc. or any aspect of
this press release.
SOURCE: ZUORA FINANCIAL
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version on businesswire.com: https://www.businesswire.com/news/home/20240409872198/en/
Margaret Pack press@zuora.com 619-609-3919
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