Zoom(ZM) - 2025 Q1 - Quarterly Results

Q1 FY2025 Financial Performance and Outlook This section provides an overview of Zoom's financial performance in Q1 FY2025 and its outlook for the remainder of fiscal year 2025 Q1 FY2025 Financial Highlights Zoom reported strong Q1 FY2025 results with $1.14 billion revenue, significant profitability, and robust cash flow driven by AI innovations - CEO Eric S. Yuan attributes the strong performance to the integration of AI across the platform, including Zoom Contact Center and Zoom Workplace, which has streamlined communications and improved productivity[3] Q1 FY2025 Key Financial Metrics (YoY) | Metric | Q1 FY2025 | YoY Change | | :--- | :--- | :--- | | Total Revenue | $1,141.2 million | +3.2% | | Enterprise Revenue | $665.7 million | +5.3% | | Online Revenue | $475.5 million | Flat | | GAAP Operating Margin | 17.8% | Up from 0.9% | | Non-GAAP Operating Margin | 40.0% | Up from 38.2% | | Non-GAAP Net Income per Share | $1.35 | Up from $1.16 | | Operating Cash Flow | $588.2 million | +40.6% | | Free Cash Flow | $569.7 million | +43.6% | - The company repurchased approximately 2.4 million shares of common stock during the quarter[6] Q1 FY2025 Customer Metrics Zoom's customer base grew, with an 8.5% increase in large customers and a 99% Enterprise net dollar expansion rate - The number of customers contributing more than $100,000 in trailing 12 months revenue grew to 3,883, an increase of approximately 8.5% YoY[7] - The company had approximately 191,000 Enterprise customers, with about 26,800 smaller Enterprise customers transitioned to the Online channel without material revenue impact[7][8] Key Customer Operating Metrics | Metric | Q1 FY2025 | YoY Change | | :--- | :--- | :--- | | Enterprise Net Dollar Expansion Rate (TTM) | 99% | Not specified | | Online Average Monthly Churn | 3.2% | Up 10 bps | FY2025 Financial Outlook Zoom projects FY2025 total revenue between $4.61 billion and $4.62 billion, with non-GAAP diluted EPS of $4.99 to $5.02 Q2 Fiscal Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Total Revenue | $1.145 billion - $1.150 billion | | Non-GAAP Income from Operations | $415.0 million - $420.0 million | | Non-GAAP Diluted EPS | $1.20 - $1.21 | Full Fiscal Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Total Revenue | $4.610 billion - $4.620 billion | | Non-GAAP Income from Operations | $1.740 billion - $1.750 billion | | Non-GAAP Diluted EPS | $4.99 - $5.02 | - The financial outlook does not include the impact from the remaining $1.35 billion authorized for share repurchases as of April 30, 2024[10] Consolidated Financial Statements The consolidated financial statements present Zoom's strong financial position, including $7.4 billion in cash and robust operating cash flow Condensed Consolidated Balance Sheets The balance sheet highlights Zoom's strong liquidity with over $7.3 billion in cash and marketable securities Balance Sheet Summary (as of April 30, 2024) | Account | Amount (in thousands) | | :--- | :--- | | Assets | | | Cash, cash equivalents, and marketable securities | $7,374,340 | | Total current assets | $8,282,045 | | Total assets | $10,296,630 | | Liabilities & Equity | | | Total current liabilities | $1,855,901 | | Total liabilities | $1,997,806 | | Total stockholders' equity | $8,298,824 | Condensed Consolidated Statements of Operations The income statement shows Q1 FY2025 revenue of $1.14 billion and GAAP net income of $216.3 million Income Statement Summary (for the three months ended April 30, 2024) | Account | Amount (in thousands) | | :--- | :--- | | Revenue | $1,141,234 | | Gross Profit | $867,932 | | Income from operations | $203,022 | | Net income | $216,308 | | Diluted net income per share | $0.69 | Condensed Consolidated Statements of Cash Flows The cash flow statement indicates robust operating cash flow of $588.2 million for the quarter Cash Flow Summary (for the three months ended April 30, 2024) | Activity | Amount (in thousands) | | :--- | :--- | | Net cash provided by operating activities | $588,191 | | Net cash used in investing activities | $(107,824) | | Net cash (used in) financing activities | $(142,451) | | Net increase in cash, cash equivalents, and restricted cash | $331,064 | Reconciliation of GAAP to Non-GAAP Measures Non-GAAP adjustments for Q1 FY2025, primarily stock-based compensation, resulted in higher operating income and net income Key GAAP to Non-GAAP Reconciliations (Q1 FY2025, in thousands) | Reconciliation | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Income from Operations | $203,022 | $253,575 | $456,597 | | Net Income | $216,308 | $210,010 | $426,318 | | Free Cash Flow | | | | | Net cash from operating activities | $588,191 | | | | Less: Purchases of property and equipment | ($18,508) | | | | Free cash flow | | | $569,683 | - The largest adjustment in reconciling GAAP to non-GAAP income is stock-based compensation expense and related payroll taxes, totaling $242.9 million for the quarter[35]