According to a recent report, the global Subscription and Billing Management software market is estimated to grow to $6.5 billion in 2026 from $3.6 billion in 2020. San Mateo-based Zuora (NYSE: ZUO), a leading player in the market, recently announced its second-quarter results that continued to surpass market expectations.

Zuora’s Financials

For the quarter, Zuora’s revenues grew 15% to $86.5 million, surpassing the market’s estimates by 3.6%. The company continued to report a loss. Non-GAAP loss was $0.04 per share, in line with the market’s estimates.

By segment, subscription revenues grew 23% to $71.5 million and professional services revenues dropped 10.12% to $14.99 million.

Among key metrics, customers with ACV equal to or greater than $100,000 grew 8% to 694. Dollar-based retention rate was 108%. Customer usage of Zuora solutions grew 42%, with $18 billion in transaction volume through Zuora’s billing platform.

For the third quarter, Zuora forecast revenues of $86-$87 million with a loss of $0.03-0.02 per share. The market was looking for revenues of $85.3 million with a breakeven quarter and revenues of $336.94 million for the year with a loss of $0.08 per share.

Zuora’s Product Upgrades

Earlier this year, Zuora launched Zuora Collect, a machine learning-based solution that helps automate smart payment retries. According to a recent Harris Poll survey, a majority of people would prefer to pay for what they use instead of a flat fee. Companies that are moving to the pay-as-you-go models are seeing growth that is six times faster than others. Zuora Collect has been built for both the recurring and usage-based business models. Automated payment retry abilities are powered by machine learning that creates insights from over 35 payment gateways, 20 payment methods, and 180 currencies. It helps efficiently turn invoices into revenue by looking at over 15 characteristics of a transaction to leverage the latest trends that impact payment success. Zuora Collect is expected to help companies maximize recurring revenue and minimize passive churn. According to Zuora, Collect customers have reported a revenue recovery increase of 10-20% and improved subscriber retention.

Zuora announced a partnership with SB Payment Service Corp, a subsidiary of SoftBank, allowing Japanese businesses to securely and seamlessly process credit card payments on a recurring subscription basis. The integration will help power the subscription payments for GeForce NOW Powered by SoftBank, a Japanese version of NVIDIA’s GeForce NOW. GeForce NOW is a leading cloud gaming platform with over 5 million registered users worldwide. According to a recent report, the subscription economy in the Asia Pacific grew at 44% in 2020. Zuora is banking on targeting this high-growth geography through this partnership.

It also announced a partnership with Stripe that will accelerate the growth of the Subscription Economy. The new product integration will allow Zuora customers to enhance their subscription experience with advanced payment capabilities. The new product integration will provide Zuora customers with services such as fraud detection, artificial intelligence-enhanced payment retries, and payment processing capabilities.

Zuora’s stock is trading at $17.02 with a market capitalization of $2.08 billion. It was trading at a 52-week high of $18.65 in June and a 52-week low of $9.15 in October last year.