SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP announces that a securities class action case has been filed on behalf of purchasers of Zuora, Inc. (NYSE: ZUO) securities between April 12, 2018 and May 30, 2019 (the “Class Period”) in the U.S. District Court for the Northern District of California, captioned Roberts v. Zuora, Inc., No. 3:19-cv-3422, and assigned to Judge Illston. The complaint charges Zuora and two of its executive officers with violations of the Securities Exchange Act of 1934.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Zuora securities during the Class Period to seek appointment as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff or have questions concerning your rights, please contact Brian Cochran at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. Lead plaintiff motions must be filed with the court no later than August 13, 2019.
Zuora is a cloud-based subscription management platform. Its flagship products are Zuora RevPro, a revenue recognition automation solution that, among other things, helps companies comply with new accounting standards (ASC 606 and IFRS 15) being implemented in January 2018, and Zuora Billing, which is designed for subscription billing. Zuora acquired RevPro in May 2017, when it acquired Leeyo Software Inc.
The complaint alleges that throughout the Class Period, defendants failed to disclose that: (1) the Company would focus on implementing RevPro for new customers ahead of the deadline to comply with accounting standard ASC 606; (2) as a result, the Company lacked adequate resources to integrate RevPro with its core business; (3) the Company would focus on RevPro integration a year after the acquisition closed; (4) delays in integrating RevPro would materially impact the Company’s business; (5) the market for RevPro was limited to customers seeking to implement new accounting standards such as ASC 606; and (6) after the deadline for ASC 606 compliance passed, demand for RevPro was reasonably likely to decline. As a result of this information being withheld from the market, Zuora securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $36 per share.
On May 30, 2019, the Company announced its first quarter 2020 financial results, disclosing that it was lowering its fiscal 2020 revenue guidance to a range of $268 million to $278 million from its prior guidance of $289 million to $293.5 million. According to the Company, the product integration for Billing and RevPro “is taking longer than expected” and the “technical work to complete the integration is taking time as these are complex mission-critical systems.” As a result of this product integration delay, the Company had slowed down RevPro implementations. The Company also reported certain sales execution problems that had slowed down its ability to cross sell its products, which “resulted in lower professional services and subscription revenue in the quarter.” On this news, the price of the Company’s shares declined nearly 30% to close at $13.99 per share on May 31, 2019.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For six consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.