San Mateo, Calif — March 21, 2019 — Zuora, Inc. (NYSE:ZUO) the leading cloud-based subscription management platform provider, today released the newest edition of its biannual Subscription Economy Index™ (SEI) designed to measure the collective health of subscription businesses and track the impact of these businesses on the overall economy. Over the past seven years, the companies featured in this study, across North America, Europe and Asia Pacific, have seen their sales grow by more than 300 percent, representing an 18 percent compound annual growth rate (CAGR). The SEI reveals that over 28 consecutive quarters (January 1, 2012 to December 31, 2018), subscription businesses grew revenues about five times faster than S&P 500 company revenues and U.S. retail sales and 10 times the sales growth of the DAX (Germany) index and ASX (Australia) index.
Leading analyst firms have also dedicated resources to researching this global business trend. Gartner predicts that “by 2023, 75 percent of organizations selling direct to consumers will offer subscription services” and in its Digital Commerce State of the Union survey, Gartner found that 70 percent of organizations have deployed or are considering the deployment of subscription services.
Yet no company, until now, has published hard evidence of the impact of subscriptions on the overall economy. “The Subscription Economy® has been a leading indicator of broader economic trends for the past seven years,” said Tien Tzuo, CEO and Founder of Zuora. “For the first time with the Subscription Economy Index, there is data suggesting that the growth of subscription revenue tracks ahead of the US Gross Domestic Product.”
Caption: The recent peak in Subscription Economy company growth in Q1 2018 was one quarter before the Q2 peak in GDP growth. In 2017, the SEI data also lead the way into a one year period of high growth, one quarter before GDP also accelerated. In the latter part of 2018, the SEI data lead the way again, slowing in Q2; GDP growth began slowing in Q3 and is still slowing now while the SEI level began to rise.
Key findings from the SEI report which details the Subscription Economy’s long-term magnitude and viability of the business model include:
1.) The Subscription Economy is a leading indicator of broader economic trends
2.) Subscription company growth was lead by subscriber acquisition
3.) Consumer-focused subscription companies made a comeback
4.) European growth surpassed that of North America, with APAC close behind
5.) Subscriptions are for more than SaaS companies, IoT and telecom are on the rise
“Everywhere we look we see new ways the Subscription Economy is expanding into new spheres and putting down deeper roots as a core part of the global economy,” said Carl Gold, Chief Data Scientist at Zuora. “In the current report we see the Subscription Economy flourishing far beyond its birthplace in new regions like Europe and Asia. And in the US we are finding the Subscription Economy is now the leading edge of the national economy, leading in growth rates and leading the way in and out of economic cycles. All these data points suggest the Subscription Economy is getting bigger and more important than anyone expected.”
Download the full Subscription Economy Index™ (SEI) here for more information on Subscription Revenue Growth by Business Model, Revenue Band, and Industry; Subscription Churn Rates by Business Model, Industry, Company Size, and Region; B2B, B2C, and B2Any Sub-Indices; and Growth by Region: EMEA vs North America.
About Zuora, Inc.
Zuora provides the leading cloud-based subscription management platform that functions as a system of record for subscription businesses across all industries. Powering the Subscription Economy®, the Zuora® platform was architected specifically for dynamic, recurring subscription business models and acts as an intelligent subscription management hub that automates and orchestrates the entire subscription order-to-cash process, including billing and revenue recognition. Zuora serves more than 1,000 companies around the world, including Box, Komatsu, Rogers, Schneider Electric, Xplornet and Zendesk. Headquartered in Silicon Valley, Zuora also operates offices in Atlanta, Boston, Denver, San Francisco, London, Paris, Beijing, Sydney, Chennai and Tokyo. To learn more about the Zuora platform, please visit zuorainternprd.wpengine.com.
Press Contact:
Jayne Gonzalez
press@zuora.com
Forward-Looking Statements
This press release contains forward-looking statements that involve a number of risks, uncertainties and assumptions, including but not limited to statements regarding the expected benefits of Zuora’s products and relationship with Deloitte Digital in assisting companies achieve success in the Subscription Economy, Zuora’s expectations regarding companies shifting to subscription business models, and the expected growth and trends in the market for subscription businesses. Any statements that are not statements of historical fact may be deemed to be forward-looking statements. Actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in the “Risk Factors” section of Zuora’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on December 12, 2018, as well as other documents that Zuora may file from time to time with the SEC. The forward-looking statements in this press release are based on current expectations as of the date of this press release and Zuora undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
This press release 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 actual events or circumstances may differ materially from events and circumstances reflected in this information.
© 2019 Zuora, Inc. All Rights Reserved. Zuora, Subscription Economy Index and Powering the Subscription Economy, are trademarks or registered trademarks of Zuora, Inc. Other names and brands may be claimed as the property of others. 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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