Yahoo Finance

• Total Revenue: $1.175 billion, a 3% year-over-year increase.

• Enterprise Revenue: Grew approximately 6% year-over-year, representing 60% of total revenue.

• Average Monthly Churn: 2.8%, a 40 basis point improvement year-over-year.

• Non-GAAP Gross Margin: 79.2%, slightly lower than the previous year.

• Non-GAAP Income from Operations: $467 million, a 2% year-over-year increase.

• Non-GAAP Operating Margin: 39.8%, down 23 basis points from the previous year.

• Non-GAAP Diluted Net Income per Share: $1.43, $0.12 above guidance.

• Deferred Revenue: $1.43 billion, a 5% year-over-year increase.

• Operating Cash Flow: $489 million, with a margin of 41.6%.

• Free Cash Flow: $463 million, with a margin of 39.4%.

• Cash, Cash Equivalents, and Marketable Securities: Approximately $7.8 billion.

• Share Buyback: 5.6 million shares purchased for $418 million.

• Full Year Revenue Guidance: Raised to $4.8 billion to $4.81 billion.

• Full Year Non-GAAP Operating Income Guidance: $1.865 billion to $1.875 billion.

• Full Year Non-GAAP EPS Guidance: Raised to $5.56 to $5.59.

• Q2 Revenue Guidance: $1.195 billion to $1.2 billion.

• Q2 Non-GAAP Operating Income Guidance: $460 million to $465 million.

• Q2 Non-GAAP EPS Guidance: $1.36 to $1.37.

• Warning! GuruFocus has detected 6 Warning Sign with ZM.

Release Date: May 21, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Zoom Communications Inc (NASDAQ:ZM) reported a 3% year-over-year revenue growth to $1.175 billion, exceeding guidance by $8 million.

• The company saw a 40% quarter-over-quarter increase in monthly active users for its AI Companion, indicating strong adoption.

• Zoom Phone revenue grew in the mid-teens, outperforming industry growth rates and suggesting market share gains.

• The Zoom Contact Center customer base grew 65% year-over-year, with significant upsell opportunities for Zoom Virtual Agent.

• The company accelerated its share buyback plan, purchasing 5.6 million shares for $418 million, demonstrating confidence in its financial position.

Negative Points

• Zoom Communications Inc (NASDAQ:ZM) noted a more cautious outlook for its enterprise business due to a challenging macroeconomic environment.

• There was an observed elongation in sales cycles and increased scrutiny on deal terms for larger U.S. enterprise customers.

• Non-GAAP gross margin slightly decreased to 79.2% due to investments in AI, with a long-term goal of reaching 80%.

• The company reported a decline in non-GAAP operating margin to 39.8%, attributed to changes in bonus structure and AI investments.

• Despite strong AI Companion adoption, the monetization of custom AI Companion features is still in early stages, with limited immediate revenue impact.