Zuora affirms Q1, FY24 guidance, sees cash flow impacted by litigation expense

In a regulatory 8-K filing last night, the company stated: "Zuora is reaffirming its guidance for the first quarter and full fiscal year 2024 that was provided in its earnings press release dated March 1, 2023, except that its guidance for free cash flow will be impacted by the settlement and related shareholder litigation expenses of the federal securities class action litigation disclosed in Item 8.01 of this Current Report on Form 8-K that was entered into following the date of the earning release. Accordingly, Zuora currently expects free cash flow for the fiscal year ending January 31, 2024 to be ($49.9) million, which reflects expected payments in fiscal year 2024 related to the shareholder litigation of (a) $69.4 million of non-recurring charges, which includes settlement of the federal securities class action litigation, net of expected insurance recovery, and an accrual for a state securities class action litigation, and (b) $4.5 million of shareholder litigation expenses. Following the date hereof, Zuora expects to provide guidance on "adjusted free cash flow", which is defined as free cash flow excluding payments for settlement charges and other expenses related to our shareholder litigation matters. Zuora’s guidance for adjusted free cash flow for fiscal year 2024 is $24.0 million or greater, which is consistent with the guidance for free cash flow provided on March 1, 2023. While Zuora expects to continue to report free cash flow for completed periods, it will no longer provide forward-looking guidance for free cash flow going forward and, will instead, provide guidance on adjusted free cash flow."