SAN JOSE, Calif., March 20, 2024 (GLOBE NEWSWIRE) -- Zoom Video Communications, Inc. (NASDAQ:ZM) today announced the launch of Zoom Compliance Manager, an all-in-one offering that provides archiving, eDiscovery, legal hold, and information protection capabilities to help organizations fulfill regulatory requirements and mitigate organizational communications compliance risks across the Zoom platform. "Zoom currently provides compliance and information protection for enterprise customers within regulated ind ...

Key TakeawaysAMC Entertainment Holdings Inc. and Comcast Corp.'s NBC struck a deal to broadcast some of NBC's daytime Summer Olympics coverage at AMC theaters.The showings would be in 160 AMC locations nationwide, beginning July 27 and running through Aug. 11.AMC also announced an agreement with Zoom Video Communications Inc. to have 'Zoom Rooms" in its theaters. The broadcast of this year’s Summer Olympics may be coming to a theater near you. AMC Entertainment Holdings Inc. (AMC) and Comcast Corp.’s (CMCSA ...

Shares of Zoom Video Communications (ZM 0.19%) are down 10% over the last 12 months because investors believe that the days of growth for video calls are over. And there's certainly some truth to that sentiment.At the end of January, the company had 220,000 enterprise customers, which looks impressive. However, that's only 4% more than a year ago. Moreover, the numbers suggest a drop in revenue from customers who are just regular people, not businesses. Given these slow growth numbers, video-calling softwar ...

Summary of Zoom Video Communications, Inc. Conference Call Company Overview - **Company**: Zoom Video Communications, Inc. (NASDAQ: ZM) - **Event**: JMP Securities Technology Conference - **Date**: March 5, 2024 - **Participants**: Kelly Steckelberg (CFO), Patrick Walravens (JMP Securities) Key Points Business Transition and Performance - **Transition Phase**: Company is in a significant transition phase, moving from pandemic-driven growth to a more stable growth model [9] - **Revenue Segments**: Pre-pandemic, the Online segment contributed about 20% of revenue; during the pandemic, it surged to over 60% [10] - **Current Trends**: The Online segment has been declining as in-person interactions resume, but stabilization has been observed in recent quarters [10][11] Financial Performance - **Q4 FY2024 Results**: Revenue exceeded guidance, with strong free cash flow and $7 billion in cash at year-end [27] - **Buyback Authorization**: The Board authorized a $1.5 billion buyback for FY2025 [27] - **Sales Team Recovery**: After a significant reorganization and reduction in force, the sales team regained productivity, finishing Q4 strong [29] Future Growth Strategies - **Growth Acts**: - **Act 2**: Focus on expanding the phone segment, which now accounts for over 10% of revenue with more than 7 million seats [13] - **Act 3**: Transitioning to a full collaboration and communication platform, introducing products like Zoom Contact Center and Zoom AI Companion [14] - **Contact Center Development**: The Contact Center product is evolving with new pricing tiers and features, aiming to capture a larger market share [21] Market Potential - **Contact Center Market Growth**: The contact center and conversational AI market is projected to grow from $19 billion in 2023 to $39 billion by 2027, indicating a significant opportunity for Zoom [24] - **Self-Service Focus**: Emphasis on helping customers self-serve through conversational AI and transitioning legacy systems to the cloud [25] Guidance and Challenges - **Cautious Outlook**: Guidance reflects caution due to international market headwinds and the need for new leadership to drive growth in EMEA and APAC regions [31] - **Renewal Events**: Many customers had renewal opportunities in FY2024, impacting revenue stability; the company expects a low point in year-over-year growth in Q2, with reacceleration anticipated in the latter half of the year [35] Long-Term Strategy - **Operating Margin**: Long-term operating margin target remains at 28% to 32%, with a current margin of 39% due to investments aimed at reaccelerating growth [36][37] - **Portfolio Expansion**: Plans to expand product offerings to enhance online growth, targeting small business needs [43] Additional Insights - **User Experience**: High user satisfaction with Zoom Phone, which is designed for ease of use and portability [18] - **AI Integration**: The company is integrating AI into its products, particularly in the Contact Center, to enhance efficiency and customer service [22] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting Zoom's current position and future growth potential in the evolving market landscape.

Key PointsZoom Video has resumed growth after years of normalization in the post-COVID era.Enterprise customers rose 3.5% YoY to 220,400 in Q4 2023, and the company initiated a $1.5 billion stock buyback.Zoom Video shares trade at 14.5X forward earnings.5 stocks we like better than Zoom Video CommunicationsZoom Video Communications Inc. NASDAQ: ZM has been trying to work through normalization after its monstrous pandemic surge in 2021. In the following post-COVID years, Zoom Video has been struggling to sta ...

Summary of Zoom Video Communications, Inc. Conference Call Company Overview - **Company**: Zoom Video Communications, Inc. (NASDAQ: ZM) - **Event**: Morgan Stanley Technology, Media & Telecom Conference - **Date**: March 4, 2024 Key Industry Insights - **Hybrid Work Environment**: The transition to hybrid work has stabilized customer needs, moving beyond the pandemic surge in 2020 [1] - **Communication and Collaboration Needs**: Zoom is focusing on expanding its platform to meet diverse communication and collaboration needs of customers [2] Core Company Insights - **Product Expansion**: Zoom is transforming its platform to include various features like Zoom Phone and Contact Center, aiming for a comprehensive communication solution [3] - **AI Integration**: The introduction of the AI Companion is seen as a retention tool for existing customers and a potential attraction tool for new customers, with over 500,000 accounts enabling it [6][7] - **Generative AI Opportunities**: Zoom is exploring monetization opportunities through generative AI, particularly in products like Contact Center and Docs [9][10] Financial Performance and Projections - **Net Revenue Retention (NRR)**: NRR is expected to recover as the majority of customers had renewal opportunities in FY 2024, with less pressure anticipated in FY 2025 [28][30] - **Profitability Outlook**: Margins are projected to decrease by 100 basis points to 79% in FY 2025, but growth in higher-margin products like Contact Center may offset this [47] - **Free Cash Flow**: Projected free cash flow for the next year is approximately $1.4 billion, indicating a tighter correlation between operating profit and cash flow [52] Market Opportunities - **Zoom Phone Growth**: Currently over 10% of revenue, with a potential to reach at least 25% of overall revenue as the attach rate is less than 20% [35][36] - **Contact Center Development**: Early traction is noted, with two customers generating $1 million in ARR. The goal is to support larger customers and reach a 10,000-seat mark within 6 to 9 months [16][17][20] Strategic Initiatives - **Channel Relationships**: Focus on building channel relationships and enhancing professional services to improve customer experience [22] - **Capital Allocation**: With $7 billion in cash and no debt, Zoom is looking to balance share buybacks with potential inorganic growth opportunities [54] Talent Acquisition and Leadership - **Engineering Talent**: The new CTO, XD Huang, is attracting top talent and driving innovation in AI, enhancing Zoom's competitive edge [13][14] - **Leadership Changes**: New leaders in key positions are expected to drive growth and innovation, with a focus on quick decision-making and customer engagement [24][65] Conclusion - **Future Outlook**: Zoom is positioned for growth with a strong focus on AI integration, product expansion, and customer retention strategies. The company aims to leverage its platform to consolidate vendor spend for customers while enhancing its service offerings [33][34][63]

Zoom Video Communications, Inc. (NASDAQ:ZM) Morgan Stanley Technology, Media & Telecom Conference March 4, 2024 2:55 PM ET Company Participants Kelly Steckelberg - Chief Financial Officer Conference Call Participants Meta Marshall - Morgan Stanley Meta Marshall So welcome, everybody. I'm Meta Marshall. I head up communications software here at Morgan Stanley. We're delighted to have Zoom. Kelly Steckelberg, CFO of Zoom, here with us. For any Morgan Stanley disclosures, please see morganstanley.com/researchd ...

Business Model and Revenue - The company’s business model is subscription-based, and there is no guarantee that customers will renew their subscriptions or upgrade to higher-priced tiers [88]. - The company generates revenue primarily from subscription sales, and any decline in demand for its platform could negatively impact future growth [105]. - The company recognized revenue from subscriptions over the terms of these subscriptions, making it difficult to immediately reflect increases or decreases in new sales in its results [159]. - A significant portion of the company's costs is expensed as incurred, while revenue is recognized over the subscription term, potentially leading to higher costs and lower revenue in early periods [159]. - For the fiscal year ended January 31, 2024, the company recorded revenue of $4,527 million, compared to $4,000 million in the previous year, reflecting a year-over-year increase of approximately 13.2% [386]. Competition and Market Dynamics - The company faces intense competition from established players like Microsoft Teams and Google G Suite, as well as consumer-oriented platforms that may have more experience in the market [96]. - The company experienced a significant increase in usage and subscriptions during the COVID-19 pandemic, leading to a shift in its customer base from primarily businesses and enterprises to a mix that includes consumers [88]. - The company’s revenue growth rate has fluctuated in prior periods and may continue to decline due to factors such as increased competition and macroeconomic conditions [90]. - The company must continually attract new customers and retain existing ones to grow, as any decline in customer satisfaction could harm its brand and growth potential [89]. - The company’s ability to compete effectively may be hindered by competitors' pricing strategies and marketing efforts, which could lead to pricing pressure on its services [99]. Operational Challenges - The company has incurred significant costs associated with upgrading its infrastructure to meet increased demand, which may impact future profitability [100]. - Economic conditions, including high inflation and recessionary environments, may significantly affect the company’s business and customer spending on its platform [103]. - The company anticipates increased sales to large organizations will lead to higher up-front sales costs and greater unpredictability in business operations [104]. - The company is investing significantly in research and development to enhance its platform and introduce new features, but there is no assurance these will gain market acceptance [113]. - The company must maintain adequate network capacity to support its growing user base, or risk performance degradation [119]. Cybersecurity and Data Privacy - The company faces significant cybersecurity risks, including ransomware attacks, which could disrupt operations and lead to reputational harm [126]. - Security incidents could result in unauthorized access to sensitive data, impacting the company's ability to provide services and incurring significant liabilities [133]. - Compliance with inconsistent data security laws could be costly, especially in the event of a widespread data breach [134]. - Increased scrutiny and negative publicity related to security and privacy issues could harm the company's reputation and customer confidence [137]. - The company is subject to various laws and regulations regarding the processing of minors' data, including COPPA, which applies to operators of commercial websites directed to U.S. children under the age of 13 [189]. Regulatory and Compliance Risks - The company is subject to changing requirements from app stores, which could adversely impact data collection and user access [112]. - The company faces challenges related to the use of generative AI, including operational, legal, and reputational risks [116]. - The company is subject to various anti-corruption laws, and any failure to comply could harm its business and financial condition [155]. - The Biden Administration's Executive Order on IT security may require the company to modify its cybersecurity practices, increasing compliance costs [167]. - The company may face significant fines and penalties for non-compliance with privacy laws, including potential fines of up to €20 million or 4% of annual global revenue under the EU GDPR [184]. International Operations and Currency Risks - The company has significant operations outside the United States, which exposes it to increased business, regulatory, and economic risks [150]. - For the fiscal year ending January 31, 2024, 19.3% of the company's revenue was denominated in currencies other than U.S. dollars, which exposes it to currency exchange rate fluctuations [163]. - The company has not entered into derivative or hedging transactions to manage foreign currency risk, as the impact has not been material historically [373]. - The company is exposed to climate-related risks, with certain offices experiencing increasing frequency of climate-related events, which may disrupt operations and increase costs [266]. - Changes in government trade policies, including tariffs and export restrictions, could adversely affect the company's ability to sell products and impact sales results [201]. Financial Position and Capital Needs - As of January 31, 2024, the company had cash and cash equivalents of $1.6 billion and marketable securities of $5.4 billion, indicating a strong liquidity position [374]. - The company may require additional capital in the future, and there is no assurance that financing will be available on favorable terms [251]. - The company faces substantial costs and management distraction due to potential securities class action litigation, which has occurred in the past [229]. - Future sales of Class A and Class B common stock could lead to significant dilution for existing shareholders and negatively impact stock price [234]. - The company does not intend to pay dividends for the foreseeable future and has never declared or paid cash dividends on its capital stock [243]. Strategic and Growth Considerations - The company is focused on converting free users to paid subscriptions, but many may not upgrade, impacting profitability [107]. - The company has limited experience in acquisitions, which may disrupt business operations and dilute stockholder value, and may face challenges in integrating acquired businesses [175]. - The company’s ability to manage growth effectively is critical to its financial condition and operational results [143]. - The company may face significant risks related to market opportunity estimates and forecasts, which may prove to be inaccurate, potentially harming business growth [244]. - The company has strategic investments in publicly traded and privately held companies, with the financial success of these investments dependent on favorable market events [248].

Zoom Video Communications' (ZM 0.25%) stock price jumped 8% on Feb. 27 after the videoconferencing company posted its latest earnings report. For the fourth quarter of fiscal 2024, which ended on Jan. 31, its revenue rose 3% year over year to $1.15 billion and beat analysts' estimates by $20 million. Its adjusted EPS grew 16% year over year to $1.42 and cleared the consensus forecast by $0.27 per share.Those growth rates might seem low, but they indicate Zoom's business is still expanding in a post-pandemic ...

Investors may have reawakened to the potential of Zoom Video Communications (ZM 0.25%). Its performance has lagged since the pandemic-induced bump in usage sent its stock to an intraday high of almost $589 per share in late 2020.The stock sells at nearly a 90% discount to that peak, and since that time, the company has redefined itself more explicitly around a communications ecosystem. Those improvements inspired Cathie Wood's Ark Invest to forecast an expected price of $1,500 per share by 2026.Given the co ...