Financial Data and Key Metrics Changes - Total revenue for Q1 FY26 grew approximately 3% year over year to $1,175 million, exceeding guidance by $8 million [20] - Enterprise revenue increased approximately 6% year over year, now representing 60% of total revenue, up two points year over year [21] - Non-GAAP gross margin in Q1 was 79.2%, slightly lower than the previous year due to investments in AI [22] - Non-GAAP income from operations grew 2% year over year to $467 million, exceeding guidance by $22 million [24] - Non-GAAP diluted net income per share was $1.43, $0.12 above the high end of guidance [25] - Deferred revenue grew 5% year over year to $1,430 million, in line with guidance [26] - Operating cash flow was $489 million, representing a margin of 41.6% [27] Business Line Data and Key Metrics Changes - Adoption of Zoom AI Companion grew with monthly active users up nearly 40% quarter over quarter [10] - Zoom Phone revenue grew in the mid-teens, opening new markets and integrating with other productivity suites [13] - The number of Zoom contact center customers grew 65% year over year, with Zoom Virtual Agent landing its largest deal to date [14] - Total WorkVivo customer count grew 106% year over year, driven partly by a partnership with Meta [17] Market Data and Key Metrics Changes - Americas revenue grew 4% year over year, EMEA grew 1%, and APAC grew 2% [22] - The customer experience offering has rapidly evolved, with a triple-digit million ARR business growing in high double digits [15] Company Strategy and Development Direction - The company is focused on AI-powered innovation to redefine modern work and deliver cost savings and productivity gains [8] - Zoom is emphasizing a platform approach that unites customer experience and collaboration under one AI-first platform [12] - The company is committed to driving efficiencies and delivering AI capabilities in a scalable, cost-effective way [23] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand across the business, with no significant impact from macroeconomic conditions on online business [47] - The outlook for enterprise business is cautious due to elongating deal cycles and increased scrutiny on deal terms [47] - The company raised its full-year revenue guidance by $15 million, reflecting a more prudent outlook in the enterprise business [28] Other Important Information - The company accelerated its share buyback plan, purchasing 5.6 million shares for $418 million [27] - A new Chief Marketing Officer, Kim Storan, was welcomed to amplify Zoom's value proposition [18] Q&A Session Summary Question: Adoption of Zoom AI Companion in SMB segment - Management noted that the number of active users has significantly increased, with more customers realizing the value of AI Companion [36] Question: Statistics on contact center and cautious outlook on enterprise - Management highlighted that Q1 was the largest quarter for ARR contribution from the contact center, with strong upsell opportunities [44][46] Question: Competitive dynamics in core video meeting solutions - Management indicated that employee preference for Zoom remains high, and the total cost of ownership favors Zoom's offerings [51] Question: Early reception of online monthly pricing increase - Management stated that the pricing increase reflects incremental value delivered to customers, with no significant churn observed [70] Question: Trends in enterprise deal elongation and down sells - Management reported continued low churn rates in both enterprise and online segments, with no significant down sells noted [123] Question: International growth focus - Management emphasized a global strategy, with strong resonance in EMEA for the combined communication and customer experience platform [117]

Financial Data and Key Metrics Changes - Total revenue for Q1 FY26 grew approximately 3% year over year to $1,175 million, exceeding guidance by $8 million [18] - Enterprise revenue increased approximately 6% year over year, now representing 60% of total revenue, up two points year over year [19] - Average monthly churn improved to 2.8%, a 40 basis point improvement year over year, marking the lowest churn rate for Q1 [19] - Non-GAAP gross margin for Q1 was 79.2%, slightly lower than the previous year due to AI investments [20] - Non-GAAP diluted net income per share was $1.43, exceeding guidance by $0.12 and up $0.08 from Q1 of last year [22] - Deferred revenue grew 5% year over year to $1,430 million, in line with the high end of the previously provided range [22] Business Line Data and Key Metrics Changes - Adoption of Zoom AI Companion grew with monthly active users up nearly 40% quarter over quarter [8] - Zoom Phone revenue grew in the mid-teens, indicating strong performance and market expansion [12] - The number of Zoom contact center customers grew 65% year over year, with Zoom Virtual Agent landing its largest deal to date [13] - Total WorkVivo customer count grew 106% year over year, driven partly by a partnership with Meta [15] Market Data and Key Metrics Changes - Americas revenue grew 4% year over year, EMEA grew 1%, and APAC grew 2% [20] - The customer experience offering has rapidly evolved, with a triple-digit million ARR business growing in high double digits [13] Company Strategy and Development Direction - The company is focused on AI-powered innovation to redefine modern work and deliver cost savings and productivity gains [6] - A strategic partnership with Bell Canada was announced, enhancing channel capabilities [16] - The company aims to drive value for customers while navigating an uncertain macro environment, emphasizing an AI-first strategy [17] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand across the business, with no significant impact from macroeconomic conditions on online business [44] - The outlook for enterprise business is cautious due to elongating deal cycles and increased scrutiny on deal terms [44] - The company raised its full-year revenue guidance by $15 million, reflecting increased product value [25] Other Important Information - The company accelerated its share buyback plan, purchasing 5.6 million shares for $418 million, indicating a commitment to delivering shareholder value [24] - The company expects to recognize 61% of total RPO as revenue over the next twelve months, up from 59% in Q1 of last year [23] Q&A Session Summary Question: Adoption of Zoom AI Companion in SMB segment - Management noted that the number of active users has significantly increased, with more customers realizing the value of AI features [31][32] Question: Customer traction with higher price SKUs in contact center - Management highlighted that Q1 was the largest quarter for ARR contribution from the contact center, with many customers opting for elite SKUs due to AI value [40][42] Question: Competitive dynamics in core video meeting solutions - Management emphasized that employee preference for Zoom remains high, and the total cost of ownership is favorable compared to competitors [48][49] Question: Early reception of online monthly pro pricing increase - Management indicated that the pricing increase reflects incremental value delivered to customers, with no significant churn observed [66][67] Question: Trends in enterprise deal elongation and down sells - Management reported continued low churn rates in enterprise and online segments, with no significant down sells noted [114]

Financial Performance - Total revenue reached $1,175 million, a 3% year-over-year increase[31] - Enterprise revenue grew by 6% year-over-year[26] - The number of customers contributing over $100,000 in TTM (trailing twelve months) revenue increased by 8% year-over-year[30] - TTM net dollar expansion rate for enterprise customers was 98%[30] - Non-GAAP operating income was $467326 thousand, resulting in a non-GAAP operating margin of 398%[31,42] - Free cash flow was $463 million, representing a free cash flow margin of 394%[35] Customer and Product Growth - Revenue Accelerator licenses increased by 72% year-over-year[16] - Workvivo total customers increased by 106% year-over-year[18] - CC (Customer Care) customers increased by 65% year-over-year, with ZVA (Zoom Virtual Agent) achieving its largest deal to date[21] Future Outlook - The company projects Q2 FY26 revenue to be between $1,195 million and $1,200 million and the full fiscal year 2026 revenue to be between $4,800 million and $4,810 million[36] - Non-GAAP EPS is projected to be between $136 and $137 for Q2 FY26 and between $556 and $559 for the full fiscal year 2026[36]

Revenue Performance - Total revenue for Q1 FY 2026 was $1,174.7 million, representing a year-over-year increase of 2.9%[6] - Enterprise revenue for Q1 FY 2026 reached $704.7 million, up 5.9% year over year[6] - Revenue for the three months ended April 30, 2025, was $1,174,715 thousand, representing a year-over-year growth of 2.9%[30] - Gross profit for the same period was $896,313 thousand, with a gross margin of approximately 76.3%[30] - Full fiscal year 2026 revenue is expected to be between $4.800 billion and $4.810 billion, with non-GAAP diluted EPS projected between $5.56 and $5.59[14] Earnings and Profitability - GAAP EPS for Q1 FY 2026 was $0.81, an increase of 18.7% year over year, while non-GAAP EPS was $1.43, up 6.0% year over year[6] - Basic net income per share increased to $0.84 from $0.70 year-over-year[30] - The company reported a GAAP operating margin of 20.6%, up from 17.8% in the previous year[34] - Non-GAAP net income for the three months ended April 30, 2025, was $448,293 thousand, compared to $426,318 thousand in the prior year[34] Customer Metrics - The number of customers contributing more than $100,000 in trailing 12 months revenue increased by 8.0% year over year, totaling 4,192 customers[5] - The trailing 12-month net dollar expansion rate for Enterprise customers was 98%[14] - Online average monthly churn for Q1 FY 2026 was 2.8%, a decrease of 40 basis points from the same quarter last fiscal year[14] Cash Flow and Financial Position - Net cash provided by operating activities for Q1 FY 2026 was $489.3 million, down from $588.2 million in Q1 FY 2025[7] - Free cash flow for Q1 FY 2026 was $463.4 million, compared to $569.7 million in the same quarter last fiscal year[7] - Total current assets as of April 30, 2025, were $8,666,777 thousand, slightly down from $8,675,974 thousand as of January 31, 2025[28] - Total liabilities decreased to $2,049,528 thousand from $2,053,337 thousand in the previous quarter[28] - Cash flows from operating activities for the three months ended April 30, 2025, were $489,261 thousand, compared to $588,191 thousand in the prior year[32] - Free cash flow (non-GAAP) for the period was $463,351 thousand, down from $569,683 thousand year-over-year[34] Guidance - Guidance for Q2 FY 2026 projects total revenue between $1.195 billion and $1.200 billion, with non-GAAP diluted EPS expected between $1.36 and $1.37[14]

Core Insights - Zoom Communications, Inc. reported strong financial results for the first fiscal quarter ended April 30, 2025, exceeding guidance in both revenue and profitability, driven by AI-first innovation and customer demand for efficiency [2][5]. Financial Highlights - Total revenue for Q1 was $1,174.7 million, representing a year-over-year increase of 2.9% and 3.4% in constant currency [5][6]. - Enterprise revenue reached $704.7 million, up 5.9% year-over-year, while Online revenue was $470.0 million, down 1.2% year-over-year [5][6]. - GAAP operating margin was 20.6%, and non-GAAP operating margin was 39.8% [5][6]. - GAAP EPS was $0.81, an increase of 18.7% year-over-year, while non-GAAP EPS was $1.43, up 6.0% year-over-year [5][6]. Customer Metrics - The number of customers contributing more than $100,000 in trailing 12 months revenue increased by 8.0% year-over-year, totaling 4,192 customers [4][5]. - The trailing 12-month net dollar expansion rate for Enterprise customers was 98% [13]. - Online average monthly churn was 2.8%, down 40 basis points from the same quarter last fiscal year [13]. Cash Flow and Share Repurchase - Net cash provided by operating activities was $489.3 million, compared to $588.2 million in the same quarter last year [6]. - Free cash flow for the quarter was $463.4 million, down from $569.7 million year-over-year [6]. - Approximately 5.6 million shares of common stock were repurchased in Q1, an increase from 4.3 million shares in Q4 [5]. Financial Outlook - For Q2 FY 2026, total revenue is expected to be between $1.195 billion and $1.200 billion, with non-GAAP diluted EPS projected between $1.36 and $1.37 [13]. - For the full fiscal year 2026, total revenue is anticipated to be between $4.800 billion and $4.810 billion, with non-GAAP diluted EPS expected between $5.56 and $5.59 [13].

Core Viewpoint - Zoom Communications Inc. is expected to report first-quarter earnings with an anticipated earnings per share of $1.31 and revenue of $1.17 billion, while the stock has shown mixed performance over the past year [1] Group 1: Stock Performance - The stock has increased by 17.5% in the past month and is up 1.5% year to date, but it remains down 29.7% over the past year [1] - The current share price is $82.87, which is slightly below the eight-day simple moving average (SMA) of $83.36, indicating a short-term bearish signal [2] Group 2: Technical Indicators - Longer-term indicators show bullish momentum with the 20-day SMA at $80.08, the 50-day SMA at $76.00, and the 200-day SMA at $75.73, all below the current price [2] - The Moving Average Convergence Divergence (MACD) reading is at 2.43, suggesting a bullish bias, while the Relative Strength Index (RSI) is at 66.55, indicating strong buying interest without excessive exuberance [3] Group 3: Analyst Sentiment - Analysts maintain a cautious stance with a consensus rating of Neutral and a price target of $84.14, while the average target from recent analyst calls is $88.67, implying a modest 6.88% upside from current levels [4] - A positive earnings report or guidance could lead to further upside, but any missteps may dampen enthusiasm [4]

Core Viewpoint - Zoom Communications is set to report its first-quarter fiscal 2026 results, with expected revenues between $1.162 billion and $1.167 billion, indicating a 2.03% increase year-over-year [1][2] Revenue Expectations - The Zacks Consensus Estimate for Zoom's first-quarter fiscal 2026 revenues is currently at $1.16 billion, reflecting a 2.03% increase from the previous year's figure [1] - The consensus for earnings per share is $1.30, which represents a 3.70% decrease from the year-ago reported figure [2] Growth Drivers - The expansion of Zoom's AI Companion capabilities, particularly with the launch of AI Companion 2.0, is expected to enhance customer engagement and boost top-line performance [3] - The enterprise segment is anticipated to remain the primary growth driver, with a 6% year-over-year revenue increase in the previous quarter, accounting for 60% of total revenues [4] - The number of customers generating over $100,000 in trailing 12-month revenues grew by 7% year-over-year, with record low churn rates [4] Segment Performance - The Online business segment, which includes SMB and individual customers, is expected to remain flat to slightly down, reflecting stabilization trends [5] - Large deal wins, such as deployments to Amazon and Delta Airlines, are expected to reinforce the platform's appeal to larger clients [5] Margin and Cash Flow Insights - Strategic investments in AI are likely to impact gross margins, but efforts in AI infrastructure optimization are expected to keep operating margins stable near 39% [6] - Free cash flow is anticipated to be affected by timing differences, tax conditions, and changes in interest rates [6] Earnings Prediction Model - According to the Zacks model, Zoom currently has an Earnings ESP of -1.68% and a Zacks Rank of 3, indicating lower odds of an earnings beat [7]

Company Overview - Zoom Communications is scheduled to announce its earnings on May 21, 2025, with consensus estimates predicting earnings per share of $1.31 and revenues of $1.17 billion for the upcoming quarter, compared to $1.35 earnings per share and $1.14 billion in revenues for the same quarter last year [2][3] - The company currently holds a market capitalization of $26 billion and generated $4.7 billion in revenue over the past twelve months, with an operating profit of $813 million and a net income of $1.0 billion [3] Historical Performance - Over the past five years, Zoom's stock has recorded a negative one-day return after earnings announcements in 68% of cases, with a median negative return of -8.1% and a maximum of -16.7% [1][6] - There have been 19 earnings data points recorded over the last five years, with 6 positive and 13 negative one-day returns, resulting in positive returns approximately 32% of the time, which increases to 36% when analyzing the last three years [6] Trading Strategies - Event-driven traders can utilize historical trends to inform their strategies, focusing on the correlation between short-term and medium-term returns post-earnings [4][5] - A pre-earnings strategy involves understanding historical probabilities of positive or negative reactions and taking positions prior to the earnings release, while a post-earnings strategy evaluates the immediate market response and positions trades accordingly [5][6] Correlation with Peers - The performance of peers can influence post-earnings reactions of Zoom's stock, with historical insights indicating that peer stock returns may impact pricing before earnings are revealed [7][8]

Core Insights - The analysis focuses on high-quality companies that can outperform the market over the long term due to competitive advantages and high levels of defensibility [1]. Group 1 - The analysis is centered on companies in Europe and North America, without constraints regarding market capitalization, covering both large-cap and small-cap companies [1]. - The author has an academic background in sociology, holding a Master's Degree with an emphasis on organizational and economic sociology, and a Bachelor's Degree in Sociology and History [1].

Core Viewpoint - The upcoming earnings report for Zoom Communications is anticipated to show a decline in earnings per share while revenues are expected to increase slightly year over year [1]. Financial Performance - Quarterly earnings are projected at $1.30 per share, reflecting a decrease of 3.7% compared to the same period last year [1]. - Revenue is forecasted to reach $1.16 billion, indicating a year-over-year increase of 2% [1]. - There has been a downward revision of 0.4% in the consensus EPS estimate over the past 30 days, suggesting analysts have adjusted their projections [2]. Revenue Breakdown - Geographic Revenue from Asia Pacific (APAC) is estimated at $143.01 million, representing a 3.6% increase from the previous year [5]. - Geographic Revenue from Europe, Middle East, and Africa (EMEA) is expected to be $184.58 million, showing a 0.3% increase year over year [5]. - Geographic Revenue from the Americas is projected at $838.48 million, indicating a 2.4% increase from the prior year [6]. Customer Metrics - The number of Enterprise Customers is estimated to be 193,166, up from 191,000 in the same quarter last year [6]. - Customers generating more than $100K in TTM Revenue are expected to reach 4,155, compared to 3,883 in the same quarter of the previous year [7]. Performance Obligations - Current Remaining Performance Obligation (RPO) is projected at $2.33 billion, up from $2.18 billion in the same quarter last year [7]. - Remaining Performance Obligations (RPO) are expected to be $3.86 billion, compared to $3.67 billion in the same quarter last year [8]. - Non-Current Remaining Performance Obligation (RPO) is estimated at $1.51 billion, slightly up from $1.49 billion year over year [8]. Stock Performance - Zoom shares have increased by 17.3% over the past month, outperforming the Zacks S&P 500 composite, which rose by 9.8% [8].