Zoom(US:ZM)2023-08-22 16:00Financial Performance - Revenue for the three months ended July 31, 2023, was $1,138.7 million, representing a 3.6% increase from $1,099.5 million in the same period of 2022[102]. - Net income for the three months ended July 31, 2023, was $182.0 million, compared to $45.8 million for the same period in 2022[102]. - Revenue for the six months ended July 31, 2023, increased by $70.8 million, or 3.3%, to $2.244 billion, driven by an 11.4% increase in revenue from subscription services to Enterprise customers[145]. - The company reported net income of $181,974 for the three months ended July 31, 2023, compared to $45,750 in 2022, indicating significant growth in profitability[134]. Revenue Breakdown - Revenue from Enterprise customers accounted for 57.9% of total revenue for the three months ended July 31, 2023, up from 54.4% in the same period of 2022[109]. - Revenue from Online customers represented 42.1% of total revenue for the three months ended July 31, 2023, compared to 45.6% in the same period of 2022[111]. - Revenue from the rest of the world (APAC and EMEA) represented 29% of total revenue for the three months ended July 31, 2023, down from 31% in the same period of 2022[117]. - Customers contributing more than $100,000 of trailing 12 months revenue represented 29% of total revenue for both the three and six months ended July 31, 2023, up from 26% in 2022, with 3,672 such customers in 2023 compared to 3,116 in 2022[121]. Customer Metrics - The net dollar expansion rate for Enterprise customers was 109% for the trailing 12 months as of July 31, 2023, down from 120% in the previous year[110]. - As of July 31, 2023, the company had approximately 218,100 Enterprise customers, an increase from 204,100 in 2022, indicating growth in market penetration[120]. Expenses and Cost Management - Research and development expenses increased by 11.1% to $191,802 for the three months ended July 31, 2023, primarily due to higher personnel-related expenses[138]. - Sales and marketing expenses decreased by 6.8% to $373,373 for the three months ended July 31, 2023, attributed to lower personnel-related expenses[139]. - General and administrative expenses decreased by 1.3% to $129,324 for the three months ended July 31, 2023, mainly due to a reduction in legal expenses[141]. - General and administrative expenses increased by $80.3 million, or 32.3%, to $329.2 million for the six months ended July 31, 2023, driven by higher personnel and legal expenses[151]. Cash Flow and Investments - Free cash flow (non-GAAP) for the six months ended July 31, 2023, was $686,032, down from $730,490 in 2022, with net cash provided by operating activities at $754,458[124]. - Net cash provided by operating activities was $754.5 million for the six months ended July 31, 2023, a decrease from $783.4 million in the prior year[161]. - Net cash used in investing activities was $500.1 million for the six months ended July 31, 2023, primarily due to net purchases of marketable securities and cash paid for acquisitions[162]. - As of July 31, 2023, the company had $6.0 billion in cash, cash equivalents, and marketable securities available for working capital and growth opportunities[155]. Foreign Currency and Risk Management - For the six months ended July 31, 2023, 19.3% of the company's revenue was denominated in currencies other than the U.S. dollar, compared to 20.7% for the same period in 2022[168]. - The company's expenses for the six months ended July 31, 2023, included 13.3% in foreign currencies, up from 12.6% in 2022[168]. - A hypothetical 10% change in foreign currency exchange rates would not have had a material impact on the company's financial statements for the periods presented[168]. - The company has not entered into derivative or hedging transactions for foreign currency exposure but may consider it in the future if exposure increases[168]. - The company does not anticipate material risks from changes in interest rates due to the short-term nature of its investments[169]. - The primary objective of the company's investment activities is to preserve principal while maximizing income without significantly increasing risk[169]. - The company has not used any derivative financial instruments to manage interest rate risk exposure[169]. - A hypothetical 10% change in interest rates would not have had a material impact on the company's financial statements for the periods presented[169]. Strategic Initiatives - The company completed a restructuring plan that included a workforce reduction of approximately 15% as of July 31, 2023, to reduce operating costs[105]. - The company acquired Workvivo in April 2023, enhancing its collaboration platform capabilities[116]. - Gains on strategic investments, net for the three months ended July 31, 2023, were $31.7 million, a 191.2% increase from a loss of $34.7 million in the same period of 2022[142]. - Other income (expense), net increased by $37.7 million, or 1119.9%, to $41.1 million for the three months ended July 31, 2023, primarily due to $29.3 million in investment yield[143].