Zoom's Fiscal Q4 2025 Profits Top Estimates

Core Insights - Zoom Communications reported better-than-expected earnings driven by advancements in AI and strong enterprise growth [1][2] Financial Performance - The company announced fiscal Q4 2025 results with an EPS of $1.41, surpassing analysts' expectations of $1.30 [2] - Revenue increased by 3.3% year-over-year to $1.184 billion, exceeding projections of $1.178 billion [2][3] - Operating cash flow rose by 20.9% to $424.6 million, while free cash flow increased by 25.1% to $416.2 million [3][6] - GAAP operating margin improved by 430 basis points year-over-year to 19% [6] Business Focus and Strategy - Zoom specializes in video conferencing and voice call solutions, with a significant focus on AI innovations like Zoom AI Companion [4][7] - The enterprise segment contributed approximately 59% of total revenue, with a 5.9% increase in enterprise revenue to $706.8 million [5][6] - The number of clients generating over $100,000 in revenue increased by 7.3% over the past four quarters [5] Future Outlook - For fiscal 2026, Zoom projects revenues between $4.785 billion and $4.795 billion, indicating moderate growth [8] - Management expects non-GAAP EPS to range from $5.34 to $5.37, emphasizing efficiency to maintain profitability [8] - The company is focused on customer retention, with a net dollar expansion rate for enterprise clients just below 100% [9] - Plans to leverage AI integration across services to enhance competitiveness against rivals like Microsoft Teams [9]