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].

Core Viewpoint - Zoom Communications (ZM) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ending April 2025, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is scheduled for May 21, 2025, with expectations that better-than-expected key numbers could lead to a stock price increase, while missing estimates may result in a decline [2]. - The consensus estimate for quarterly earnings is projected at $1.30 per share, reflecting a year-over-year decrease of 3.7%, while revenues are expected to reach $1.16 billion, marking a 2% increase from the previous year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised downwards by 0.41%, indicating a collective reassessment by analysts regarding the company's earnings prospects [4]. - The Most Accurate Estimate for Zoom is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.68%, suggesting a bearish outlook from analysts [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the likelihood of actual earnings deviating from consensus estimates, with a strong predictive power for positive readings [7][8]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have historically shown a nearly 70% chance of delivering a positive surprise [8]. Historical Performance - In the last reported quarter, Zoom exceeded the expected earnings of $1.31 per share by delivering $1.41, resulting in a surprise of +7.63% [12]. - Over the past four quarters, Zoom has consistently beaten consensus EPS estimates [13]. Conclusion - While Zoom does not currently appear to be a strong candidate for an earnings beat, investors are advised to consider other factors when making decisions regarding the stock ahead of the earnings release [16].

Core Insights - The integration of Zoom CX with ServiceNow CRM and IT Service Management aims to create a unified, AI-first solution for customer service and IT support in contact centers [1][2] - This partnership enhances customer experiences by streamlining interactions and providing agents with the necessary tools to resolve issues efficiently [2] Group 1: Integration Benefits - The integration allows agents to manage all interactions—voice, video, and chat—within the ServiceNow platform, eliminating the need to switch between systems [3] - Agents can access real-time CRM data, interaction history, and open cases, enabling them to focus on customer needs [3][4] Group 2: AI and Personalization - The combination of Zoom's AI capabilities with ServiceNow's automation allows organizations to scale support while maintaining a personalized experience [5] - Zoom Virtual Agent provides context-aware responses, while AI Expert Assist offers real-time sentiment analysis and smart note-taking [5][6] Group 3: Collaboration and Resolution - Zoom's collaboration tools within ServiceNow facilitate seamless teamwork, allowing agents to involve the right experts without losing context [7] - This capability helps in resolving customer issues more quickly and effectively [7] Group 4: Availability - The Unified Engagement solution from Zoom CX and ServiceNow is set to be available later this year through the ServiceNow Store [8]

Group 1 - Zoom Communications, Inc. will release its financial results for Q1 of fiscal year 2026 on May 21, 2025, after market close [1] - A live Zoom Webinar for the financial results will be accessible at 2:00 pm PT / 5:00 pm ET through Zoom's investor relations website [1] - A replay of the event will be available approximately two hours after the live event concludes [1] Group 2 - Zoom's mission is to provide an AI-first work platform for human connection, emphasizing teamwork and productivity [2] - Zoom Workplace is an open collaboration platform that includes an AI Companion to enhance team productivity [2] - The company offers Business Services for sales, marketing, and customer experience, including Zoom Contact Center, to strengthen customer relationships [2]

Company Overview - Zoom Communications (ZM) closed at $76.16, with a slight increase of +0.17% from the previous session, outperforming the S&P 500's gain of 0.06% [1] - Over the past month, ZM shares have increased by 1.59%, while the Computer and Technology sector and the S&P 500 have decreased by 5.52% and 4.29%, respectively [1] Earnings Projections - The upcoming earnings release is anticipated, with projected earnings per share (EPS) of $1.30, reflecting a 3.7% decrease year-over-year [2] - Quarterly revenue is expected to be $1.16 billion, which is a 2.03% increase from the same period last year [2] Fiscal Year Estimates - For the entire fiscal year, earnings are estimated at $5.36 per share and revenue at $4.78 billion, indicating a decrease of -3.25% in earnings and an increase of +2.35% in revenue compared to the previous year [3] - Recent changes in analyst estimates indicate a dynamic business trend, with positive revisions suggesting optimism about the company's profitability [3] Stock Performance and Valuation - The Zacks Rank system, which reflects estimate changes, indicates that ZM currently holds a rank of 3 (Hold) [5] - The Forward P/E ratio for Zoom Communications is 14.19, significantly lower than the industry average of 26.08, suggesting that ZM is trading at a discount [6] Industry Comparison - ZM has a PEG ratio of 8.98, compared to the Internet - Software industry's average PEG ratio of 2.19, indicating a higher valuation relative to growth expectations [7] - The Internet - Software industry is ranked 90th in the Zacks Industry Rank, placing it in the top 37% of over 250 industries [7][8]