Zoom(US:ZM)2025-11-25 21:02Revenue and Income - Revenue for the three months ended October 31, 2025, was $1,229.8 million, representing a 4.4% increase from $1,177.5 million in the same period of 2024[92]. - Net income for the three months ended October 31, 2025, was $612.9 million, compared to $207.1 million for the same period in 2024[92]. - Revenue for the nine months ended October 31, 2025, increased by $140.5 million, or 4.0%, to $3,621.8 million compared to $3,481.3 million in 2024, driven by a 6.3% growth in revenue from Enterprise customers[134]. Customer Segmentation - Revenue from Enterprise customers accounted for 60.3% of total revenue for the three months ended October 31, 2025, up from 59.4% in 2024[99]. - Revenue from Online customers represented 39.7% of total revenue for the three months ended October 31, 2025, down from 40.6% in 2024[100]. - The net dollar expansion rate for Enterprise customers was 98% as of October 31, 2025, consistent with the previous year[99]. - Customers contributing more than $100,000 of trailing 12 months revenue increased to 4,363 as of October 31, 2025, from 3,995 in 2024[111]. Profitability and Expenses - Gross profit for the three months ended October 31, 2025, was $958,065, a 7.2% increase from $893,660 in 2024, with a gross margin of 77.9% compared to 75.9% in 2024[126]. - Research and development expenses decreased by 5.8% to $210,097 for the three months ended October 31, 2025, primarily due to a reduction in stock-based compensation[127]. - Sales and marketing expenses decreased by 5.2% to $342,814 for the three months ended October 31, 2025, mainly due to lower stock-based compensation[129]. - General and administrative expenses decreased significantly by 24.9% to $94,740 for the three months ended October 31, 2025, largely due to prior-year accruals related to an SEC investigation[130]. - Gross profit for the nine months ended October 31, 2025, was $2,798.4 million, reflecting a 6.0% increase from $2,639.0 million in 2024, with a gross margin improvement to 77.3% from 75.8%[135][136]. - Research and development expenses decreased by $13.3 million, or 2.1%, to $621.9 million for the nine months ended October 31, 2025, primarily due to a reduction in stock-based compensation[137]. - Sales and marketing expenses decreased by $39.7 million, or 3.7%, to $1,028.8 million for the nine months ended October 31, 2025, mainly driven by a decrease in stock-based compensation[138][139]. - General and administrative expenses decreased significantly by $73.1 million, or 21.1%, to $273.9 million for the nine months ended October 31, 2025, due to a reversal of prior year accruals and reduced stock-based compensation[140]. Tax and Other Income - Provision for income taxes increased by 147.9% to $181,836 for the three months ended October 31, 2025, due to an increase in income before taxes[133]. - Provision for income taxes increased by $109.7 million, or 49.2%, to $332.6 million for the nine months ended October 31, 2025, primarily due to an increase in income before taxes[143]. - Gains on strategic investments for the three months ended October 31, 2025, were $406,060, a substantial increase from $6,324 in 2024[131]. - Other income, net, decreased by 14.3% to $78,235 for the three months ended October 31, 2025, primarily due to lower interest income from cash and marketable securities[132]. Cash Flow and Investments - Free Cash Flow (FCF) for the nine months ended October 31, 2025, was $1,585,642, an increase of 13.9% from $1,392,516 in 2024[114]. - Net cash provided by operating activities was $1,634.5 million for the nine months ended October 31, 2025, compared to $1,520.7 million in 2024, reflecting higher net income[150]. - Net cash used in investing activities was $330.2 million for the nine months ended October 31, 2025, primarily for marketable securities and property purchases[151]. - The company repurchased 16,624,306 shares of Class A common stock for an aggregate amount of $1,295.8 million during the nine months ended October 31, 2025[157]. Strategic Initiatives - The company continues to invest in AI capabilities, focusing on enhancing productivity and collaboration tools[89]. - New product innovations include AI Companion 3.0, expected to be available in December 2025, which will enhance task management and productivity features[105]. Risk Management - The company has not been exposed to material risks due to changes in interest rates due to the short-term nature of its investments[162]. - A hypothetical 10% change in interest rates would not have had a material impact on the historical condensed consolidated financial statements for the three and nine months ended October 31, 2025 and 2024[162].