Business Performance and Market Dynamics - 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 [83]. - The revenue growth rate has fluctuated in prior periods and may continue to decline, with factors such as increased competition and macroeconomic conditions contributing to this uncertainty [85]. - The company has seen a loss of users and customers due to current economic conditions, including high inflation, which may lead to reduced demand for its platform [96]. - Sales cycles for large organizations have lengthened, leading to greater deployment challenges and unpredictability in business outcomes [97]. - The company must continually attract new customers and retain existing ones, as any decline in renewals or upgrades could harm its business [82]. - The company operates in a competitive market with significant pressure from established players and new entrants, which may affect its pricing strategies [90]. - The introduction of new products by competitors could adversely affect the company's market position and financial condition [108]. - The company faces challenges in maintaining and expanding its network of resellers, which is crucial for increasing customer acquisition and sales [158]. Financial Health and Profitability - The company has incurred significant costs associated with upgrading infrastructure to meet increased demand, which may impact future profitability [93]. - The company has incurred net losses in the past and may continue to do so in the future, impacting profitability [101]. - Significant investments are planned in sales and marketing to attract new customers and expand services, which may lead to increased losses if revenue does not grow correspondingly [101]. - The company is focusing on converting free users to paid subscriptions, but many may never upgrade, affecting revenue potential [101]. - The company may incur substantial costs and lose the right to accept credit cards if it fails to meet evolving credit card association merchant standards, potentially leading to a significant decline in its customer and paid user base [166]. - The company may experience service outages or adverse consequences if it fails to satisfy government and industry-specific requirements in new markets [146]. Cybersecurity and Compliance Risks - Cybersecurity threats, including ransomware attacks, pose significant risks to the company's operations and reputation, with potential for severe financial consequences [119]. - The company has faced past security incidents that could lead to reputational damage and significant liabilities if similar events occur in the future [118]. - Increased scrutiny and negative publicity related to security vulnerabilities could harm customer trust and impact business growth [133]. - The company relies on third parties for critical business operations, which introduces additional cybersecurity risks and vulnerabilities [122]. - Compliance with varying data security laws can be costly and may lead to adverse consequences if not managed properly [130]. - The company is subject to various privacy and data protection laws, including the California Consumer Privacy Act, which imposes significant compliance costs and potential fines for noncompliance [180]. - The company may face significant consequences if it fails to comply with privacy, data protection, and information security obligations, including government enforcement actions and potential statutory damages [201]. Regulatory and Legal Challenges - The company is subject to compliance with international laws and regulations, which increases its cost of doing business and may lead to enforcement actions if not adhered to [150]. - The company has received subpoenas from the Department of Justice regarding interactions with foreign governments, including the Chinese government, which could lead to substantial fines and reputational harm [154]. - Geopolitical tensions, particularly between the United States and China, may lead to increased scrutiny of the company's operations in China, affecting its ability to conduct research and development [153]. - The company is subject to various anti-corruption laws, and non-compliance could adversely affect its business and financial condition [151]. - Legislative changes in states like Florida and Texas could limit the company's ability to moderate user-generated content, increasing legal risks and potential liabilities [212]. Operational and Strategic Considerations - The company is investing in research and development to enhance platform features and capabilities, particularly in AI and machine learning [107]. - The ability to expand marketing and sales capabilities is essential for increasing the customer base and achieving broader market acceptance [110]. - The company faces intense competition for skilled personnel, particularly software developers, which may impact its ability to attract and retain qualified employees [141]. - The company has limited experience in acquisitions, which may disrupt its business and dilute stockholder value if not managed effectively [173]. - The company has encountered risks and uncertainties typical of rapidly growing companies, which may strain its management and operational resources [138]. Financial Reporting and Stockholder Considerations - The company recognizes revenue from subscriptions over the terms of these subscriptions, which may delay the reflection of new sales in reported results [155]. - The trading price of Zoom's Class A common stock has been volatile, influenced by various market factors, which could affect investor returns [229]. - Future sales and issuances of capital stock could lead to substantial dilution for existing stockholders, potentially causing a decline in stock price [236]. - The company does not intend to pay dividends for the foreseeable future, focusing instead on retaining earnings for business operations and expansion [246]. - The company may require additional capital, and there is uncertainty regarding the availability of financing on favorable terms [253]. Environmental, Social, and Governance (ESG) Factors - The company is subject to increased scrutiny regarding environmental, social, and governance factors, which may impose additional costs and risks [264]. - The company is subject to various U.S. export control and sanctions laws, which could limit its ability to compete in international markets and increase costs [206]. - The company has inadvertently allowed access to its platform in potential violation of U.S. economic sanctions, which could result in fines and penalties if found in violation [207].

SAN JOSE, Calif., Feb. 27, 2025 (GLOBE NEWSWIRE) -- Today, Zoom Communications, Inc. (NASDAQ:ZM) and Mitel, a global leader in business communications, announced the global launch of a unique hybrid cloud solution that integrates Zoom Workplace and Zoom AI Companion with Mitel's flagship communications platforms, including its leading telephony solutions. This marks a significant milestone in the strategic partnership between the companies announced in September 2024. Today, organizations are navigating the ...

Zoom Video (ZM) shares lost approximately 8% on Tuesday following the company's fourth-quarter fiscal 2025 earnings report, primarily due to underwhelming revenue guidance for the coming quarters. While the company beat the Zacks Consensus Estimate for revenues and earnings for the reported quarter, its forward-looking projections have raised concerns about growth prospects as more companies require employees to return to physical offices.Shares of Zoom have seen its stock gain 8.9% in the past year compare ...

JPMorgan analyst Mark R. Murphy maintained a Neutral rating on Zoom Communications Inc ZM with a price target of $80.Zoom reported fourth-quarter revenue of $1.18 billion, up 3.3%, which is in-line with analyst estimates. The communications company reported fourth-quarter adjusted earnings of $1.41 per share, beating analyst estimates of $1.30 per share.Also Read: Huawei Boosts AI Chip Production Despite Taiwan Semi And ASML Ban, Aims to Challenge Nvidia In ChinaZoom expects first-quarter revenue of $1.162  ...

Core Insights - Zoom's fourth-quarter fiscal 2025 adjusted earnings per share (EPS) were $1.41, exceeding the Zacks Consensus Estimate by 7.63% but showing a year-over-year decrease of 0.7% [1] - The company reported revenues of $1.184 billion, surpassing the consensus mark by 0.50% and increasing 3.29% year over year [2] Financial Performance - Enterprise revenues, which accounted for 59.69% of total revenues, rose 5.9% year over year to $706.8 million [3] - The number of customers contributing over $100,000 in revenues in the trailing 12 months grew by 7.3% to 4,088, representing 31% of total revenues [3] - The total number of Enterprise customers at the end of the fiscal fourth quarter was approximately 192,600, with a net dollar expansion rate of 98% for Enterprise customers [4] Strategic Developments - Zoom achieved its largest Annual Recurring Revenue (ARR) deal in history with a Fortune 100 U.S. tech company in its Contact Center, with the number of Contact Center customers with over $100,000 in ARR growing more than 100% year over year [5] - The company also saw an 89% year-over-year growth in customers for Workvivo and signed three new deals with more than $1 million in ARR [5] Operating Metrics - Non-GAAP gross margin for the fiscal third quarter was 78.22%, up from 69.80% in the previous year, attributed to strategic investments in AI innovation [6] - Non-GAAP operating income increased by 5.46% year over year to $467.96 million, with an operating margin of 40.82% compared to 39.70% in the prior year [7] Balance Sheet and Cash Flow - As of January 31, 2025, total cash, cash equivalents, and marketable securities were $7.8 billion, up from $7.7 billion as of October 31, 2024 [8] - Net cash provided by operating activities for the fiscal fourth quarter was $424.6 million, reflecting a 20.9% year-over-year increase, while free cash flow rose by 25.1% to $416.2 million [8] Guidance - For the first quarter of fiscal 2026, Zoom expects revenues between $1.162 billion and $1.167 billion, with non-GAAP EPS anticipated in the range of $1.29 to $1.31 [9] - For fiscal 2026, the company projects revenues between $4.785 billion and $4.795 billion, with non-GAAP EPS expected to be between $5.34 and $5.37 [10]

Don’t just invest—dominate with Tech Contrarians' realized return on closed positions of 65.8% since inception. You’ll get exclusive insights into high-focus stocks, curated watchlists, one-on-one portfolio consultations, and everything from live portfolio tracking to earnings updates on 50+ companies. Subscribe today for 20% off.It's time to revisit Zoom Communications Inc. (NASDAQ: ZM ) after the company reported its Q4 earnings results and outlook for FY26. The stock has been a textbook in-line performer ...

Here's our initial take on Zoom Communications' (ZM -1.70%) fiscal year 2025 fourth-quarter results.Key MetricsMetricQ4 FY24Q4 FY25Changevs. ExpectationsRevenue$1.15 billion$1.18 billion+3%BeatEarnings per share (adjusted)$1.42$1.41-1%BeatOperating cash flow$351.2 million$424.6 million+21%n/aEnterprise customer net dollar expansion rate101%98%-300 BPSn/aWeak growth, customer churn have changed the storyZoom's growth problems in recent quarters continued through the end of fiscal 2025 (ended Jan. 31, 2025). ...

Financial Data and Key Metrics Changes - Total revenue for Q4 FY25 grew approximately 3% year-over-year to $1.184 billion, exceeding guidance by $4 million [27] - Non-GAAP gross margin in Q4 was 78.8%, slightly lower than the previous year due to strategic investments in AI [34] - Non-GAAP operating margin improved to 39.5%, up 81 basis points year-over-year [35] - Operating cash flow increased 21% year-over-year to $425 million, while free cash flow grew 25% to $416 million [38] Business Line Data and Key Metrics Changes - Enterprise revenue grew approximately 6% year-over-year, now making up 60% of total revenue [28] - The number of Enterprise customers contributing over $100,000 in trailing 12-month revenue grew by 7% year-over-year [29] - Zoom Docs usage more than doubled quarter-over-quarter, indicating strong adoption across the portfolio [17] Market Data and Key Metrics Changes - Americas revenue grew 4% year-over-year, EMEA grew 2%, and APAC grew 3% [33] - The total number of Workvivo customers grew 89% year-over-year, accelerating from 79% in Q3 [19] Company Strategy and Development Direction - The company is evolving into an AI-first work platform, focusing on enhancing AI capabilities across its services [8][14] - Strategic partnerships, such as with Mitel and Amazon, are aimed at expanding market reach and enhancing customer engagement [15][23] - The company plans to continue investing in AI and expanding its product offerings, particularly in Contact Center and Workvivo [21][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the value proposition and total cost of ownership gaining traction despite macro challenges [22] - The company anticipates continued growth in enterprise revenue and a focus on innovation to drive customer value [40][45] - Management acknowledged mixed but stable macro conditions, with record low churn rates in both online and enterprise segments [90] Other Important Information - The company repurchased 4.3 million shares for $355 million in Q4, contributing to a reduction in common shares outstanding [39] - Non-GAAP diluted net income per share in Q4 was $1.41, slightly lower than the previous year due to higher income tax and unrealized foreign exchange losses [35] Q&A Session Summary Question: AI capabilities as a tailwind for business growth - Management emphasized that AI investments are a top priority and are already driving customer engagement and service stickiness [50][51] Question: Impact of AI on larger customer decisions - Management noted that customers are increasingly valuing AI features, which enhances trust and drives adoption [60][62] Question: Ranking top drivers for new revenue in FY26 - Management indicated that enterprise growth will be the dominant driver, with Contact Center and Workvivo also contributing significantly [71][72] Question: Go-to-market investments and strategies - Management highlighted the importance of moving upmarket and enhancing channel partnerships to drive growth [80][82] Question: Demand environment post-election - Management characterized the macro environment as mixed but stable, with positive trends in enterprise and low churn rates [90][91] Question: Custom AI Companion use cases and adoption - Management discussed the flexibility of the custom AI Companion and its appeal to enterprise customers [104][106] Question: Long-term margin expectations with AI products - Management expressed confidence in maintaining margins through efficiency gains despite increased AI investments [118][120]

Core Insights - Zoom Communications reported revenue of $1.18 billion for the quarter ended January 2025, reflecting a year-over-year increase of 3.3% [1] - The earnings per share (EPS) for the quarter was $1.41, slightly down from $1.42 in the same quarter last year [1] - The reported revenue met the Zacks Consensus Estimate, showing a surprise of +0.50%, while the EPS exceeded expectations by +7.63% [1] Financial Performance Metrics - Zoom's shares have returned +2.9% over the past month, outperforming the Zacks S&P 500 composite, which declined by -0.5% [3] - The company has 192,600 enterprise customers, slightly below the average estimate of 196,933 [4] - Customers generating over $100K in TTM revenue totaled 4,088, closely matching the average estimate of 4,089 [4] - Current Remaining Performance Obligation (RPO) stands at $2.25 billion, slightly below the average estimate of $2.27 billion [4] - Total Remaining Performance Obligations (RPO) are reported at $3.80 billion, exceeding the average estimate of $3.76 billion [4] - Non-Current Remaining Performance Obligation (RPO) is $1.55 billion, above the average estimate of $1.48 billion [4]

Zoom Communications Q4 FY25 Earnings February 24, 2025 © 2025 Zoom Communications, Inc. Use of non-GAAP financial measures In addition to the financials presented in accordance with U.S. generally accepted accounting principles ("GAAP"), this presentation includes the following non-GAAP metrics: Revenue in Constant Currency, non-GAAP gross profit, non-GAAP gross margin, non-GAAP R&D expense, non-GAAP S&M expense, non-GAAP G&A expense, non-GAAP operating margin, non-GAAP income from operations, non-GAAP net ...