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Cloud subscription management services firm Zuora Inc.’s stock plunged more than 15 percent today in after-hours trading thanks to light guidance for its fiscal first quarter.

Update: On Friday, shares ended up falling 14 percent. The drop came in spite of a decent fourth quarter for the company, which remains unprofitable after posting a net loss of $20.67 million for its latest three-month period.

Zuora reported a loss before certain costs such as stock compensation of 11 cents per share on revenue of $64.1 million in the quarter. Wall Street was also expecting a loss of 11 cents per share, but had forecast slightly lower revenue of $62.8 million.

Zuora sells a software-as-a-service offering that’s used to automate businesses’ subscription order-to-cash operations in real time. Companies use its platform to launch new businesses, shift products to subscriptions, implement new pay-as-you-go pricing and packaging models, gain new insights into subscriber behavior and attempt to disrupt market segments based on new pricing methods.

“We had a strong fourth quarter and a fantastic finish to our first year as a public company,” said Tien Tzuo (pictured), founder and CEO of Zuora. “With more than $10 billion processed through our system, it is clear that more and more companies across multiple industries joined the global Subscription Economy, and Zuora is increasingly strategic to their long-term success.”

The company boasts significant customers, including the likes of hyperconverged infrastructure provider Nutanix Inc., cloud computing services firm Pivotal Software Inc., Ford Motor Co. and General Electric Co.

Looking at the services it offers, it’s clear that Zuora has potential for growth in the long term. Fickle investors tend to focus on short-term prospects, however, so Zuora’s lower-than-expected guidance was the most likely prompt for today’s after-hours selloff.

For the first quarter, Zuora said it’s expecting to see a loss before certain costs of 13 to 14 cents per share on revenue of $63.5 million to $64.5 million. Wall Street analysts were hoping for a bit more, forecasting a 13-cent loss on revenue of $65.6 million.

Zuora’s full-year forecast also came up short in terms of revenue. The company is predicting a net loss of between 40 and 44 cents on revenue of $289 million to $293 million in 2019. Analysts are looking at a loss of 45 cents per share on revenue of $294.5 million.

“Subscription billing is at the heart of the shift to a service and experience-centric digital transformation,” said Ray Wang, principal analyst and chief executive officer of Constellation Research Inc. ” Zuora did well in the quarter and despite the low guidance it is the category king of the market. I suspect it will beat guidance for the next quarter despite some macro headwinds.”

Photo: SiliconANGLE