Core Insights - Zoom Communications reported better-than-expected earnings driven by advancements in AI and strong enterprise growth [1][2] Financial Performance - The company announced fiscal Q4 2025 results with an EPS of $1.41, surpassing analysts' expectations of $1.30 [2] - Revenue increased by 3.3% year-over-year to $1.184 billion, exceeding projections of $1.178 billion [2][3] - Operating cash flow rose by 20.9% to $424.6 million, while free cash flow increased by 25.1% to $416.2 million [3][6] - GAAP operating margin improved by 430 basis points year-over-year to 19% [6] Business Focus and Strategy - Zoom specializes in video conferencing and voice call solutions, with a significant focus on AI innovations like Zoom AI Companion [4][7] - The enterprise segment contributed approximately 59% of total revenue, with a 5.9% increase in enterprise revenue to $706.8 million [5][6] - The number of clients generating over $100,000 in revenue increased by 7.3% over the past four quarters [5] Future Outlook - For fiscal 2026, Zoom projects revenues between $4.785 billion and $4.795 billion, indicating moderate growth [8] - Management expects non-GAAP EPS to range from $5.34 to $5.37, emphasizing efficiency to maintain profitability [8] - The company is focused on customer retention, with a net dollar expansion rate for enterprise clients just below 100% [9] - Plans to leverage AI integration across services to enhance competitiveness against rivals like Microsoft Teams [9]

Financial Data and Key Metrics Changes - Total revenue for Q4 grew approximately 3% year over year to $1,184 million, exceeding guidance by $4 million [20] - Non-GAAP gross margin in Q4 was 78.8%, slightly lower than the previous year due to strategic investments in AI [24] - Operating cash flow increased 21% year over year to $425 million, while free cash flow grew 25% to $416 million [26] - For FY '25, total revenue grew 3% and total enterprise revenue grew 5% year over year [27] Business Line Data and Key Metrics Changes - Enterprise revenue grew approximately 6% year over year, now making up 60% of total revenue [20] - The number of enterprise customers contributing over $100,000 in trailing twelve months revenue grew 7% year over year [21] - Zoom Docs usage more than doubled quarter over quarter, indicating strong adoption [12] Market Data and Key Metrics Changes - Americas revenue grew 4% year over year, EMEA grew 2%, and APAC grew 3% [23] - The number of contact center customers with over $100,000 in ARR grew over 100% year over year [14] Company Strategy and Development Direction - The company is focused on expanding AI capabilities to drive customer value and rapidly innovate within Zoom Workplace [17] - Strategic partnerships, such as with Amazon, are expected to enhance distribution channels and drive growth [66] - The company aims to return its online business to growth while continuing to move its enterprise business upmarket [54] Management's Comments on Operating Environment and Future Outlook - Management described the macro environment as mixed but stable, with positive momentum in the enterprise segment [62] - The company is encouraged by the traction of its value proposition and total cost of ownership in the market [17] - Future growth is expected to be driven primarily by enterprise customers, with online growth anticipated to be flat to slightly down [48] Other Important Information - The company plans to launch a custom AI companion add-on in April to automate workplace tasks [8] - Non-GAAP diluted net income per share in Q4 was $1.41, exceeding guidance by $0.11 [24] Q&A Session Summary Question: AI capabilities as a tailwind for business growth - Management believes AI investments are already enhancing service stickiness and driving customer value, with plans to monetize AI features for enterprise customers in the future [34] Question: AI's impact on larger customers' decisions - Management noted that customers are increasingly recognizing the value of AI features without additional costs, which builds trust and long-term relationships [40] Question: Top three drivers for new revenue in FY '26 - Management indicated that enterprise growth will be the dominant driver, with contact center and AI also contributing significantly [46] Question: Go-to-market investments and large customer deals - The company is prioritizing moving upmarket and accelerating channel partnerships to drive growth in contact center and other services [54] Question: Demand environment post-election - Management characterized the demand environment as mixed but stable, with improvements in churn rates and enterprise momentum [62] Question: Use cases for the custom AI companion - The company aims to provide flexibility for customers to customize their AI needs, enhancing productivity and collaboration [73] Question: Margin profile for AI products - Management expects increased usage in AI to be offset by efficiencies, maintaining a focus on profitability while investing in growth [81]

Revenue Performance - Fourth quarter total revenue was $1,184.1 million, up 3.3% year over year, with full fiscal year total revenue of $4,665.4 million, up 3.1% year over year[6] - Revenue for the three months ended January 31, 2025, was $1,184,138 thousand, representing an increase from $1,146,457 thousand in the same period of 2024, a growth of approximately 3.3%[33] - GAAP revenue for the three months ended January 31, 2025, was $1,184,138, representing a year-over-year growth of 3.3% compared to $1,146,000 in 2024[38] - Full fiscal year 2026 total revenue is expected to be between $4.785 billion and $4.795 billion, with non-GAAP income from operations expected between $1.850 billion and $1.860 billion[15] Profitability Metrics - Non-GAAP net income for the fourth quarter was $446.9 million, or $1.41 per share, compared to $444.0 million, or $1.42 per share in the same quarter last year[5] - Net income for the year ended January 31, 2025, was $1,010,238 thousand, compared to $637,462 thousand for the year ended January 31, 2024, reflecting a year-over-year increase of approximately 58.5%[33] - The diluted net income per share for the year ended January 31, 2025, was $3.21, up from $2.07 for the year ended January 31, 2024, representing a growth of approximately 55.1%[33] - Non-GAAP income from operations for the year ended January 31, 2025, was $1,837,895, reflecting a year-over-year growth of 3.5% from $1,774,888 in 2024[37] Cash Flow and Liquidity - Operating cash flow for the fourth quarter was $424.6 million, up 20.9% year over year, with full fiscal year operating cash flow of $1,945.3 million, up 21.7% year over year[8] - Free cash flow for the fiscal year was $1,808.7 million, up 22.9% year over year[10] - Free cash flow (non-GAAP) for the year ended January 31, 2025, was $1,808,748, up from $1,471,883 in 2024, indicating a growth of 22.9%[37] - Cash flows from operating activities for the year ended January 31, 2025, totaled $1,945,308, an increase from $1,598,836 in 2024[37] - The company’s cash, cash equivalents, and restricted cash at the end of the year was $1,361,417, down from $1,565,380 at the end of the previous year[35] Customer Metrics - The number of customers contributing more than $100,000 in trailing 12 months revenue increased by 7.3% year over year[6] - Approximately 192,600 Enterprise customers were reported at the end of the fourth quarter[14] - The trailing 12-month net dollar expansion rate for Enterprise customers was 98%[14] - The net dollar expansion rate for Enterprise customers is calculated based on the annual recurring revenue (ARR) from the previous period, indicating strong customer retention and growth potential[27] Operating Efficiency - GAAP operating margin for the fourth quarter was 19.0%, up 430 basis points year over year, and non-GAAP operating margin was 39.5%, up 80 basis points year over year[6] - The company reported a GAAP operating margin of 19.0% for the three months ended January 31, 2025, compared to 14.7% in the same period of 2024[37] - The company reported a non-GAAP operating margin of 39.5% for the three months ended January 31, 2025, compared to 38.7% in the same period of 2024[37] Asset and Liability Overview - The total current assets as of January 31, 2025, were $8,675,974 thousand, an increase from $7,926,219 thousand as of January 31, 2024, representing a growth of approximately 9.4%[31] - The total liabilities as of January 31, 2025, were $2,053,337 thousand, compared to $1,910,387 thousand as of January 31, 2024, reflecting an increase of approximately 7.5%[31] - The total stockholders' equity as of January 31, 2025, was $8,935,084 thousand, an increase from $8,019,406 thousand as of January 31, 2024, indicating a growth of approximately 11.4%[31] Research and Development - Research and development expenses for the three months ended January 31, 2025, were $217,121 thousand, compared to $205,282 thousand in the same period of 2024, showing an increase of about 5.4%[33]

Core Insights - Zoom Communications, Inc. reported financial results for the fourth quarter and fiscal year ended January 31, 2025, highlighting a transformation into an AI-first company driven by the Zoom AI Companion [1][2]. Financial Performance - Fourth quarter total revenue reached $1,184.1 million, reflecting a year-over-year increase of 3.3%, while full fiscal year total revenue was $4,665.4 million, up 3.1% year over year [5][10]. - Non-GAAP net income for the fourth quarter was $446.9 million, or $1.41 per share, compared to $444.0 million, or $1.42 per share in the same quarter of the previous year [4][6]. - The company achieved a GAAP operating margin of 19.0% in Q4, an increase of 430 basis points year over year, and a non-GAAP operating margin of 39.5%, up 80 basis points year over year [5][10]. Cash Flow and Share Repurchase - Operating cash flow for the fourth quarter was $424.6 million, a 20.9% increase year over year, with full fiscal year operating cash flow of $1,945.3 million, up 21.7% year over year [5][10]. - The company repurchased approximately 4.3 million shares of common stock in the fourth quarter and about 15.9 million shares during the full fiscal year [5][10]. Customer Metrics - The number of customers contributing more than $100,000 in trailing 12 months revenue increased by 7.3% year over year, totaling 4,088 customers [11]. - Zoom had approximately 192,600 Enterprise customers with a trailing 12-month net dollar expansion rate of 98% [11]. Financial Outlook - For the first quarter of fiscal year 2026, Zoom expects total revenue between $1.162 billion and $1.167 billion, with non-GAAP diluted EPS anticipated between $1.29 and $1.31 [18]. - For the full fiscal year 2026, total revenue is projected to be between $4.785 billion and $4.795 billion, with non-GAAP diluted EPS expected between $5.34 and $5.37 [18].

Core Viewpoint - Sigma Corporation has introduced the world's first mirrorless lens with an 18.8x zoom ratio, the 16-300mm F3.5-6.7 DC OS | Contemporary, which is designed to be versatile and portable, catering to a wide range of photographic needs [1][4]. Product Features - The Sigma 16-300mm F3.5-6.7 DC OS | Contemporary lens features an 18.8x zoom ratio, the largest for an APS-C format mirrorless lens, equivalent to 24-450mm in 35mm format [1][8]. - It is designed for various photography styles, including wide-angle, super-telephoto, and macro photography, making it suitable for landscapes, portraits, wildlife, and sports [5][7]. - The lens incorporates high-speed autofocus with a High-response Linear Actuator (HLA) motor, providing fast and accurate focusing, especially for moving subjects [6][11]. - It offers optical stabilization with 6 stops at the wide end and 4.5 stops at the telephoto end, enhancing image clarity in low light and at full zoom [12][16]. - The lens construction includes 20 elements in 14 groups, featuring advanced optical design for excellent aberration correction and sharp results throughout the zoom range [19][16]. Design and Portability - The lens is compact, measuring 73.8mm in diameter and 121.4mm in length, and weighs only 615g, making it highly portable [10]. - It features a dust- and splash-resistant structure, along with a water- and oil-repellent coating to protect against contaminants [14][15]. Availability and Pricing - The Sigma 16-300mm F3.5-6.7 DC OS | Contemporary will be available in multiple mounts, including L-Mount, Sony E-Mount, Fujifilm X Mount, and Canon RF Mount, with a retail price of $699 [1][3]. - The lens is set to launch in April 2025 for L-Mount and Sony E-Mount, and in May 2025 for Fujifilm X Mount and Canon RF Mount [3].

Financial Performance - Zoom Communications Inc. is set to release its fourth-quarter financial results on February 24, 2025, with expected earnings of $1.35 per share, a decrease from $1.42 per share in the same period last year [1] - The company projects quarterly revenue of $1.19 billion, an increase from $1.15 billion a year earlier [1] - In the third quarter, Zoom reported revenue of $1.18 billion, surpassing the consensus estimate of $1.16 billion, and adjusted earnings of $1.38 per share, exceeding analyst estimates of $1.31 per share [2] Analyst Ratings - Citigroup analyst Tyler Radke maintained a Neutral rating and reduced the price target from $86 to $85 [4] - Cantor Fitzgerald analyst Thomas Blakey initiated coverage with a Neutral rating and a price target of $87 [4] - Wells Fargo analyst Michael Turrin upgraded the stock from Underweight to Equal-Weight and raised the price target from $70 to $85 [4] - Morgan Stanley analyst Meta Marshall maintained an Equal-Weight rating and increased the price target from $86 to $96 [4] - Rosenblatt analyst Catharine Trebnick maintained a Buy rating and raised the price target from $78 to $95 [4]

Core Viewpoint - Zoom Video is expected to report modest revenue growth and a decline in earnings per share for the fourth quarter of fiscal 2025, reflecting ongoing challenges in the enterprise market and competition in the collaboration space [1][2][17]. Revenue and Earnings Estimates - Zoom anticipates fourth-quarter fiscal 2025 revenues between $1.175 billion and $1.18 billion, with the Zacks Consensus Estimate at $1.18 billion, indicating a 2.77% increase year-over-year [1]. - Non-GAAP earnings per share are projected to be in the range of $1.29-$1.30, with the Zacks Consensus Estimate at $1.31 per share, representing a 7.75% decline from the previous year [2]. Earnings Surprise History - Zoom has a positive earnings surprise history, with a 5.34% surprise in the last reported quarter and an average surprise of 14.29% over the trailing four quarters [3]. Earnings Prediction Model - The current Earnings ESP for Zoom is 0.00%, and it holds a Zacks Rank 3 (Hold), indicating that the model does not predict a definitive earnings beat this time [4][5]. Growth and Strategic Initiatives - The company reported a 3.6% year-over-year revenue growth in the fiscal third quarter, suggesting a stabilization after a period of deceleration [6]. - Management projects approximately 2.7% year-over-year revenue growth for the fourth quarter, reflecting cautious spending from enterprise customers [7]. - Strategic initiatives, such as the introduction of Zoom Workplace for Education and the Video SDK for resale partners, may positively influence performance, although their impact is expected to be limited due to late-quarter timing [8]. Financial Metrics and Challenges - Zoom's gross margins declined to 78.9% in the fiscal third quarter from 79.7% the previous year, influenced by ongoing AI investments [9]. - The company has a strong balance sheet with $7.7 billion in cash and investments and a $2 billion share repurchase program, providing some downside protection [10]. - Despite a trailing 12-month net dollar expansion rate of 98% for enterprise customers, challenges remain in fully monetizing the existing customer base amid economic uncertainty [10]. Stock Performance and Valuation - Zoom's stock has increased by 41.3% over the past six months, outperforming the broader Zacks Computer and Technology sector, which grew by 7.7% [11]. - The company's price-to-sales ratio of 5.44 is higher than the industry average of 5.1, indicating high growth expectations but also elevated risk [13]. Investment Outlook - The investment thesis for Zoom suggests a balanced case heading into the earnings report, with signs of stabilization but ongoing competition and cautious enterprise spending [17]. - Current shareholders may benefit from holding their positions while monitoring the execution of the AI-first strategy, and new investors might find better entry points post-earnings [19].

Company Overview - Zoom Communications (ZM) closed at $85.17, with a slight decrease of -0.04% compared to the previous day, underperforming the S&P 500's gain of 0.24% [1] - Over the past month, ZM shares have increased by 8.48%, significantly outperforming the Computer and Technology sector's gain of 1.76% and the S&P 500's gain of 2.37% [1] Upcoming Earnings - The earnings report for Zoom Communications is scheduled for February 24, 2025, with an expected EPS of $1.31, reflecting a decrease of 7.75% from the same quarter last year [2] - Revenue is projected to be $1.18 billion, indicating a 2.77% increase compared to the equivalent quarter last year [2] Analyst Estimates - Changes in analyst estimates for Zoom Communications are crucial as they often reflect short-term business dynamics, with upward revisions indicating positive sentiment towards the company's operations and profitability [3] - The Zacks Rank system, which incorporates these estimate changes, currently rates Zoom Communications at 3 (Hold) [5] Valuation Metrics - Zoom Communications has a Forward P/E ratio of 16.11, which is below the industry average of 29.86, suggesting that the company is trading at a discount compared to its peers [6] - The current PEG ratio for ZM is 2.97, compared to the Internet - Software industry's average PEG ratio of 2.14 [7] Industry Context - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 82, placing it in the top 33% of over 250 industries [8] - Research indicates that industries in the top 50% of the Zacks Industry Rank outperform those in the bottom half by a factor of 2 to 1 [8]

Wall Street analysts expect Zoom Communications (ZM) to post quarterly earnings of $1.31 per share in its upcoming report, which indicates a year-over-year decline of 7.8%. Revenues are expected to be $1.18 billion, up 2.8% from the year-ago quarter.Over the last 30 days, there has been no revision in the consensus EPS estimate for the quarter. This signifies the covering analysts' collective reconsideration of their initial forecasts over the course of this timeframe.Before a company announces its earnings ...

In this video, Motley Fool Analysts evaluate Zoom's (ZM 0.12%) current standing in the market. With ratings reflecting its post-pandemic challenges, they discuss management, financials, and future growth potential. Tune in to see if Zoom can navigate its way back to prominence or if it's destined for mediocrity.*Stock prices used were the prices of Jan. 15, 2025. The video was published on Feb. 18, 2025. ...