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Zoom Communications 8-K Report, Financial Results (May 20, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed May 20, 2024
Period End
May 20, 2024
Security
ZM
In the record · 2019–202610-K710-Q238-K67

ZM filed 7 annual reports (10-K), 23 quarterly reports (10-Q) and 67 current reports (8-K) between 2019 and 2026.

  1. Material agreement8-K · Jul ’21Jul ’21
  2. Leadership change8-K · Mar ’23Mar ’23
  3. Leadership change8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed May 20, 2024. Cited figures are marked; the original filing is the authoritative source.

Zoom Video Communications, Inc. filed this Form 8-K under Item 2.02 (Results of Operations and Financial Condition) to furnish a press release, Exhibit 99.1, announcing financial results for the three months ended April 30, 2024 (first quarter of fiscal year 2025).

Total revenue was $1,141.2 milliona, up 3.2% year over year as reported and 3.5% in constant currency. Enterprise revenue was $665.7 million, up 5.3%, while Online revenue was $475.5 million, flat year over year. GAAP income from operations was $203.0 million (GAAP operating margin of 17.8%), compared with $9.7 million a year earlier, and non-GAAP operating margin was 40.0%.

GAAP net income was $216.3 millionb, or $0.69 per diluted share, versus $15.4 million, or $0.05, in the prior-year quarter. Cash generation was strong. Net cash provided by operating activities was $588.2 million, up 40.6% year over year, and free cash flow was $569.7 million, up 43.6%.

Total cash, cash equivalents, and marketable securities were $7.4 billionc as of April 30, 2024. The company repurchased approximately 2.4 million shares during the quarter, and $1.350 billion of share repurchase authorization remained as of April 30, 2024. Management guided to second-quarter fiscal 2025 total revenue of $1.145 billion to $1.150 billion and non-GAAP diluted EPS of $1.20 to $1.21.

For full fiscal 2025, guidance calls for total revenue of $4.610 billion to $4.620 billiond and non-GAAP diluted EPS of $4.99 to $5.02. Operating metrics included 3,883 customers contributing more than $100,000 in trailing 12-month revenue, up approximately 8.5%, and approximately 191,000 Enterprise customers after about 26,800 lower-MRR customers were reclassified to Online as of April 30, 2024. The trailing 12-month Enterprise net dollar expansion rate was 99%, and Online average monthly churn was 3.2%, up 10 bps.

02—Key points

Key Highlights

  1. Total revenue of $1,141.2 million, up 3.2% year over year (3.5% in constant currency); Enterprise revenue of $665.7 million, up 5.3%; Online revenue flat at $475.5 million.
  2. GAAP net income of $216.3 million, or $0.69 per diluted share, versus $15.4 million, or $0.05, a year earlier; GAAP operating margin of 17.8% versus 0.9% in the prior-year quarter.
  3. Non-GAAP operating margin of 40.0% and non-GAAP income from operations of $456.6 million, compared with $422.3 million a year earlier; non-GAAP diluted EPS of $1.35 versus $1.16.
  4. Operating cash flow of $588.2 million, up 40.6%, and free cash flow of $569.7 million, up 43.6%; cash and marketable securities totaled $7.4 billion.
  5. Repurchased approximately 2.4 million shares; $1.350 billion of repurchase authorization remained as of April 30, 2024.
  6. FY2025 guidance: total revenue of $4.610 billion to $4.620 billion and non-GAAP diluted EPS of $4.99 to $5.02; Q2 guidance of $1.145 billion to $1.150 billion in revenue and $1.20 to $1.21 non-GAAP diluted EPS.
  7. Approximately 26,800 lower-MRR Enterprise customers were reclassified to Online, reducing the Enterprise customer count to approximately 191,000; customers above $100,000 in trailing 12-month revenue rose to 3,883, up approximately 8.5%.

03—Questions

Frequently Asked Questions

  1. What did Zoom report for the first quarter of fiscal 2025?

    Total revenue was $1,141.2 million, up 3.2% year over year as reported and 3.5% in constant currency. GAAP net income was $216.3 million, or $0.69 per diluted share, compared with $15.4 million, or $0.05, in the first quarter of fiscal 2024.

  2. How strong was Zoom's cash generation in the quarter?

    Net cash provided by operating activities was $588.2 million, up 40.6% year over year, and free cash flow was $569.7 million, up 43.6%. Total cash, cash equivalents, and marketable securities were $7.4 billion as of April 30, 2024.

  3. What guidance did Zoom provide?

    For the second quarter of fiscal 2025, total revenue is expected to be between $1.145 billion and $1.150 billion, with non-GAAP diluted EPS of $1.20 to $1.21. For full fiscal 2025, total revenue is expected to be between $4.610 billion and $4.620 billion, with non-GAAP diluted EPS of $4.99 to $5.02. The EPS and share count figures do not include the impact of the $1.350 billion of remaining share repurchase authorization.

  4. Did the customer count change in a way that affects comparability?

    Yes. Approximately 26,800 Enterprise customers with lower MRR were transitioned away from direct sales teams, resellers, or strategic partners and are now classified as Online customers, reducing the Enterprise total to approximately 191,000 as of April 30, 2024. The company stated this did not have a material impact on the percent of revenue from Enterprise and Online customers, net dollar expansion rate, or Online average monthly churn.

  5. How did Zoom's profitability compare with a year earlier?

    GAAP income from operations was $203.0 million, compared with $9.7 million in the first quarter of fiscal 2024, and the GAAP operating margin was 17.8% versus 0.9% a year earlier. Non-GAAP operating margin was 40.0%, compared with 38.2% in the prior-year quarter.

04—Continue

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