Core Insights - Zoom Communications (ZM) has shown a modest increase in total revenue for the quarter ending April 2025, amounting to $1.17 billion, which is a 2.9% year-over-year growth [4] International Revenue Breakdown - APAC contributed 12.09% of total revenue, translating to $142 million, which was a slight decline of -0.7% compared to analyst expectations of $143.01 million [5] - EMEA accounted for 15.75% of total revenue, with $185 million, exceeding analyst expectations by +0.23% [6] Future Projections - Analysts project total revenue for the current fiscal quarter to reach $1.2 billion, reflecting a 3% increase from the previous year, with APAC and EMEA expected to contribute 12.3% ($146.93 million) and 15.8% ($189.09 million) respectively [7] - For the full year, total revenue is anticipated to be $4.8 billion, marking a 2.9% increase, with contributions from APAC and EMEA projected at 12.3% ($591.96 million) and 15.9% ($762.16 million) respectively [8] Market Context - The reliance on international markets presents both opportunities and challenges for Zoom, making it essential to monitor international revenue trends for future growth projections [9] - The interconnected global economy necessitates a keen understanding of a company's international market performance to gauge its financial health and growth potential [2][3]

Revenue and Income - Revenue for the three months ended April 30, 2025, was $1,174.7 million, representing a period-over-period growth of 2.9% compared to $1,141.2 million in 2024[88] - Net income for the same period was $254.6 million, up from $216.3 million in 2024[88] - Revenue for the three months ended April 30, 2025, was $1,174,715, an increase of $33.5 million or 2.9% compared to $1,141,234 in 2024, driven by a 5.9% increase in revenue from Enterprise customers[118] - Gross profit for the same period was $896,313, reflecting a gross margin of 76.3%, up from 76.1% in 2024[120] - Net income for the three months ended April 30, 2025, was $254,603, compared to $216,308 in 2024, representing an increase of 17.7%[117] Customer Segmentation - Revenue from Enterprise customers accounted for 60.0% of total revenue for the three months ended April 30, 2025, compared to 58.3% in 2024[94] - Revenue from Online customers represented 40.0% of total revenue for the three months ended April 30, 2025, compared to 41.7% in 2024[96] - The net dollar expansion rate for Enterprise customers was 98% for the trailing 12 months as of April 30, 2025, down from 99% in 2024[95] - Customers contributing more than $100,000 of trailing 12 months revenue represented 31.9% of total revenue in 2025, up from 29.9% in 2024[105] Cash Flow and Investments - Free cash flow (non-GAAP) for the three months ended April 30, 2025, was $463.4 million, down from $569.7 million in 2024[108] - Cash, cash equivalents, and marketable securities totaled $7.8 billion as of April 30, 2025, available for working capital and growth opportunities[128] - Net cash provided by operating activities was $489,261 for the three months ended April 30, 2025, down from $588,191 in 2024, primarily due to estimated tax payments[134] - The company invested $125.1 million in net cash used in investing activities, including $99.2 million for marketable securities and $25.9 million for property and equipment[135] - Net cash used in investing activities for the three months ended April 30, 2024 was $107.8 million, primarily due to net purchases of marketable securities of $91.0 million[136] - Net cash used in financing activities for the three months ended April 30, 2025 was $490.5 million, mainly due to cash paid for repurchases of common stock of $418.0 million[137] - During the three months ended April 30, 2025, the company repurchased and retired 5,561,920 shares of Class A common stock for an aggregate amount of $418.0 million[141] Operating Expenses - Total operating expenses decreased to $654,721, down from $664,910 in 2024, with a notable reduction in general and administrative expenses by 8.1%[124] Foreign Currency and Risk Management - For the three months ended April 30, 2025, 19.3% of revenue was denominated in currencies other than the U.S. dollar, compared to 19.4% for the same period in 2024[144] - The company has not entered into derivative or hedging transactions for foreign currency exchange rates, but may do so in the future if exposure increases[144] - A hypothetical 10% change in foreign currency exchange rates would not have had a material impact on historical financial statements for the three months ended April 30, 2025 and 2024[144] - The company has not been exposed to material risks due to changes in interest rates, and a hypothetical 10% change would not have had a material impact on historical financial statements[146] Strategic Investments and AI - The company continues to invest in AI and recently launched several new products, including Zoom Tasks and Zoom Workplace for Frontline Workers[99] - Other income, net increased by $16.2 million or 22.6%, reaching $87,792, primarily due to changes in foreign currency exchange rates[126] - Losses on strategic investments, net were $(13,619) for the three months ended April 30, 2025, a decline of 178.5% compared to gains of $17,354 in 2024[125] Taxation - Provision for income taxes decreased by $14.5 million or 19.2%, totaling $61,162 for the three months ended April 30, 2025[127] Stock Repurchase Program - The Board of Directors authorized a stock repurchase program of up to $1.5 billion in February 2024, followed by an additional $1.2 billion in November 2024[139] - As of April 30, 2025, the company had cash and cash equivalents of $1,228.8 million and marketable securities of $6,564.0 million[145]

Group 1: Performance Overview - A handful of stocks, including Shopify, Zoom Video Communications, and Peloton Interactive, significantly benefited during the pandemic, with substantial gains for investors targeting stay-at-home stocks [1][2] - Shopify has consistently outperformed the S&P 500 over the last year, showcasing its strong position in the market [2] Group 2: Shopify (SHOP) - Shopify's platform gained traction as consumers shifted to online shopping, making it a strong bet among pandemic stocks [3] - The company reported a 27% year-over-year sales growth in its latest earnings, achieving double-digit percentage sales growth for ten consecutive periods [4][7] - Shopify's CFO highlighted a 15% free cash flow margin and eight consecutive quarters of pro forma revenue growth of 25% or more, indicating robust financial health [7] Group 3: Zoom Video Communications (ZM) - Zoom's sales grew modestly by 3% year-over-year, with adjusted EPS of $1.43, reflecting a 6% increase [11] - The company's operating cash flow decreased to $489 million from $588 million year-over-year, and free cash flow fell to $463 million from $569.7 million [11] - There is a need for meaningful sales growth for Zoom to regain investor interest, as it has struggled to achieve this [14] Group 4: Peloton Interactive (PTON) - Peloton's shares have declined over 90% since their all-time highs in January 2021, primarily due to weak quarterly results [15] - The company reported sales of $624 million, a 13% year-over-year decline, with subscription revenue down 4% and Connected Fitness Products revenue decreasing by 27% [16] - Consumer interest in Peloton's products has waned post-pandemic, leading to significant sales and subscription losses [18] Group 5: Conclusion - Among the three companies, Shopify remains the leader in performance and fundamentals, benefiting from the ongoing trend of online shopping [19] - Zoom's stock has stagnated, requiring a strong quarterly release to stimulate growth [20] - Peloton faces a challenging situation with declining sales and consumer interest [20]

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Core Insights - Wall Street analysts have rerated Zoom Communications, Inc following the company's strong first-quarter results, with earnings per share (EPS) of $1.43 exceeding the consensus estimate of $1.31 and revenue of $1.17 billion meeting expectations [1][2] Financial Performance - Zoom raised its fiscal 2026 adjusted EPS guidance from a range of $5.34-$5.37 to $5.56-$5.59, surpassing the analyst estimate of $5.41 [2] - Quarterly revenue for the first quarter increased by 3% to $1.18 billion, exceeding Street estimates and the high end of guidance [5] - The Enterprise segment now constitutes 60% of total revenue, growing by 6%, while the online segment achieved a record low churn rate of 2.8% [5][7] Analyst Ratings and Projections - Needham analyst Joshua Reilly rated Zoom with a Buy and set a price target of $100, while Rosenblatt analyst Catharine Trebnick maintained a Buy and raised the price target from $90 to $100 [10] - Oppenheimer analyst Timothy Horan projected fiscal 2026 adjusted EPS of $5.53 and fiscal 2027 adjusted EPS of $5.92 [8] - Citizens analyst Patrick Walravens increased his fiscal 2026 adjusted EPS estimate to $5.58 from $5.35 [11] Strategic Positioning - Analysts noted that Zoom is at an inflection point with easing revenue headwinds from Online, peaked dilution from stock-based compensation, and potential for share buybacks [4] - The company continues to invest in AI, with the adoption of AI Companion growing by approximately 40% sequentially [8][9] - Zoom has a cash reserve of $7.8 billion, providing significant flexibility for capital returns and potential M&A opportunities [9] Market Trends - The updated fiscal 2026 topline guidance implies that current growth trends are expected to continue [14] - Analysts highlighted that Zoom's newer products are showing strength, particularly in selling into the installed base and lengthening deal durations [12]

Core Insights - Zoom Communications reported first-quarter fiscal 2026 adjusted earnings of $1.43 per share, exceeding the Zacks Consensus Estimate by 10% and reflecting a year-over-year increase of 5.93% [1] - Revenues for the quarter reached $1.175 billion, surpassing the consensus mark by 0.89% and showing a year-over-year growth of 2.93% [1] Revenue Breakdown - Enterprise revenues, which constitute 60.01% of total revenues, increased by 5.86% year over year to $705 million [2] - The number of customers contributing over $100,000 in revenues over the trailing 12 months grew by 8% to 4,192, accounting for 32% of total revenues [2] Customer Metrics - The total number of Enterprise customers at the end of the fiscal first quarter was approximately 182,600 [3] - The percentage of total Online Monthly Recurring Revenue (MRR) from Online customers with a service term of at least 16 months was 74.2%, an increase of 40 basis points year over year [3] - The trailing 12-month net dollar expansion rate for Enterprise customers was reported at 98% [3] Operating Performance - Non-GAAP gross margin for the quarter was 79.18%, slightly down from 79.31% in the previous year [4] - Non-GAAP operating income rose by 2.35% year over year to $467.33 million, with an operating margin of 49.78%, compared to 40.01% in the year-ago quarter [5] Financial Position - As of April 30, 2025, total cash, cash equivalents, and marketable securities stood at $7.8 billion, unchanged from the previous quarter [6] - Net cash provided by operating activities was $489.3 million, down from $588.2 million in the year-ago quarter, while free cash flow decreased to $463.4 million from $569.7 million [6] Future Guidance - For the second quarter of fiscal 2026, Zoom expects revenues between $1.195 billion and $1.2 billion, with non-GAAP earnings per share projected in the range of $1.36 to $1.37 [7] - For the full fiscal year 2026, revenues are anticipated to be between $4.8 billion and $4.81 billion, with non-GAAP earnings per share expected to be in the band of $5.56 to $5.59 [7]

Core Insights - Zoom Communications Inc. reported stronger-than-expected earnings for its first quarter, with earnings of $1.43 per share, surpassing the analyst consensus estimate of $1.31, and quarterly revenue of $1.17 billion, meeting the Street estimate [1] - CEO Eric S. Yuan highlighted the company's performance as a testament to its platform strength and AI-first innovation, noting that customers are increasingly turning to Zoom for efficiency and improved experiences in a challenging macroeconomic environment [2] - Following the earnings announcement, Zoom shares fell by 1.5% to $81.03 [3] Financial Guidance - Zoom raised its fiscal 2026 adjusted EPS guidance from a range of $5.34 to $5.37 to a new range of $5.56 to $5.59, exceeding the $5.41 analyst estimate [2] - The company also increased its revenue outlook from a range of $4.79 billion to a new range of $4.8 billion to $4.81 billion, compared to the previous estimate of $4.79 billion [2] Analyst Ratings and Price Targets - Rosenblatt analyst Catharine Trebnick maintained a Buy rating on Zoom and raised the price target from $90 to $100 [8] - Morgan Stanley analyst Meta Marshall maintained an Equal-Weight rating and increased the price target from $79 to $85 [8] - Wells Fargo analyst Michael Turrin also maintained an Equal-Weight rating, boosting the price target from $75 to $80 [8]

Important News - The U.S. House of Representatives passed a tax reform bill proposed by Trump, which will significantly reduce taxes, cut social spending, and increase federal debt; Democrats criticized the bill as a tax cut for the wealthy and a weakening of social security [1] Company News - TSMC and other manufacturers are advising the U.S. Department of Commerce to exempt semiconductor-related tariffs [2] - Sanofi will acquire clinical-stage biotech company Vigil Neuroscience for $470 million in cash, with the total acquisition price potentially rising to $600 million if subsequent development milestones are met [3] - Cigna announced a new agreement with Eli Lilly and Novo Nordisk to set a cap on out-of-pocket costs for weight loss medications [3] - Google has announced the launch of AI search ad testing for desktop users in the U.S. starting today [3] Economic Indicators - The number of initial jobless claims in the U.S. last week was 227,000, down from the previous value of 229,000 [4] - The yield on the 30-year U.S. Treasury bond rose to 5.15%, marking the highest level since October 2023 [4] - Federal Reserve Governor Waller indicated that if tariffs decrease, the Fed is expected to lower interest rates in the second half of 2025 [4] - Nike is expected to implement widespread price increases on products in the U.S. market as early as this week [4] - Walmart is laying off nearly 1,500 employees in its technology department [4] - Zoom reported a 2.9% year-over-year revenue growth to $1.17 billion for the first fiscal quarter, with adjusted earnings per share of $1.35, exceeding market expectations [4]

Core Insights - Zoom Communications reported revenue of $1.17 billion for the quarter ended April 2025, reflecting a year-over-year increase of 2.9% and a surprise of +0.89% over the Zacks Consensus Estimate of $1.16 billion [1] - The earnings per share (EPS) for the quarter was $1.43, surpassing the previous year's $1.35 and exceeding the consensus EPS estimate of $1.30 by +10.00% [1] Financial Performance Metrics - Zoom's shares have returned +15.8% over the past month, outperforming the Zacks S&P 500 composite's +12.7% change [3] - The company has 182,600 enterprise customers, which is below the average estimate of 193,166 [4] - Customers generating over $100K in trailing twelve months (TTM) revenue totaled 4,192, slightly above the average estimate of 4,155 [4] - Current Remaining Performance Obligation (RPO) stands at $2.36 billion, exceeding the average estimate of $2.33 billion [4] - Total Remaining Performance Obligations (RPO) is $3.88 billion, slightly above the average estimate of $3.86 billion [4] - Non-Current Remaining Performance Obligation (RPO) is $1.52 billion, marginally above the average estimate of $1.51 billion [4] Geographic Revenue Breakdown - Revenue from the Americas reached $848 million, surpassing the average estimate of $838.48 million, with a year-over-year change of +3.5% [4] - Revenue from Europe, the Middle East, and Africa (EMEA) was $185 million, slightly above the average estimate of $184.58 million, reflecting a +0.5% change year-over-year [4] - Revenue from the Asia Pacific (APAC) region was $142 million, just below the average estimate of $143.01 million, with a +2.9% change compared to the previous year [4] - Online revenue was reported at $470 million, slightly below the average estimate of $472.82 million [4] - Enterprise revenue reached $704.70 million, exceeding the average estimate of $689.42 million [4]

Group 1: Earnings Performance - Zoom Communications reported quarterly earnings of $1.43 per share, exceeding the Zacks Consensus Estimate of $1.30 per share, and showing an increase from $1.35 per share a year ago, representing a 10% earnings surprise [1] - The company posted revenues of $1.17 billion for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 0.89%, and up from $1.14 billion year-over-year [2] - Over the last four quarters, Zoom has consistently surpassed consensus EPS estimates and revenue estimates [2] Group 2: Stock Performance and Outlook - Zoom shares have increased approximately 1.8% since the beginning of the year, compared to a 1% gain in the S&P 500 [3] - The future performance of Zoom's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $1.34 on revenues of $1.19 billion, and for the current fiscal year, it is $5.36 on revenues of $4.78 billion [7] Group 3: Industry Context - The Internet - Software industry, to which Zoom belongs, is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]