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Zoom Communications 8-K Report, Financial Results (Aug 21, 2024)

Reports
Earnings & Results·Leadership Changes·Exhibits & Filings
Filing Date
Filed August 21, 2024
Period End
August 21, 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 August 21, 2024. Cited figures are marked; the original filing is the authoritative source.

Zoom Video Communications, Inc. reported financial results for the three months ended July 31, 2024 (its second fiscal quarter of fiscal year 2025).

Total revenue was $1,162.5 milliona, up 2.1% year over year as reported and 2.4% in constant currency. Enterprise revenue was $682.8 million, up 3.5% year over year, while Online revenue was $479.7 million, flat year over year. GAAP income from operations was $202.4 million (GAAP operating margin of 17.4%), and non-GAAP operating margin was 39.2%.

GAAP net income was $219.0 millionb, or $0.70 per diluted share, and non-GAAP net income per diluted share was $1.39. Operating cash flow was $449.3 million, up 33.7% year over year, and free cash flow was $365.1 million, up 26.2%. Total cash, cash equivalents, and marketable securities were $7.5 billion as of July 31, 2024, and the company repurchased approximately 4.8 million shares during the quarter.

The company updated its outlook, guiding third-quarter fiscal 2025 total revenue to between $1.160 billionc and $1.165 billion and full-year fiscal 2025 total revenue to between $4.630 billion and $4.640 billion. Full-year non-GAAP diluted EPS is expected to be between $5.29 and $5.32, and full-year free cash flow between $1.580 billion and $1.620 billion. The company noted $1.062 billion of share repurchase authorization remained as of July 31, 2024.

Separately, the filing discloses that Chief Financial Officer Kelly Steckelberg notified the company on August 16, 2024 that she intends to resign, with the decision not resulting from any disagreement. Under a Transition and Separation Agreement dated August 21, 2024, she will remain CFO through the release of earnings for the fiscal quarter ending October 31, 2024, and will serve part-time as CFO beginning October 10, 2024. The company has begun a search for her successor.

02—Key points

Key Highlights

  1. Total revenue of $1,162.5 million, up 2.1% year over year (2.4% in constant currency); Enterprise revenue up 3.5% to $682.8 million, while Online revenue was flat at $479.7 million.
  2. GAAP net income of $219.0 million ($0.70 per diluted share) versus $182.0 million ($0.59) a year earlier; non-GAAP net income per diluted share of $1.39 versus $1.34.
  3. Operating cash flow of $449.3 million, up 33.7% year over year; free cash flow of $365.1 million, up 26.2%.
  4. Third-quarter fiscal 2025 revenue guidance of $1.160 billion to $1.165 billion; full-year fiscal 2025 revenue guidance of $4.630 billion to $4.640 billion.
  5. Full-year fiscal 2025 non-GAAP diluted EPS guidance of $5.29 to $5.32 and free cash flow guidance of $1.580 billion to $1.620 billion.
  6. 3,933 customers contributing more than $100,000 in trailing 12-month revenue, up approximately 7.1% year over year; Online average monthly churn of 2.9%, down 30 bps.
  7. CFO Kelly Steckelberg intends to resign; she will remain CFO through the October 2024 quarter earnings release and then serve part-time, and the company has begun a search for a successor.

03—Questions

Frequently Asked Questions

  1. How did Zoom perform in the second quarter of fiscal 2025?

    Total revenue was $1,162.5 million, up 2.1% year over year as reported and 2.4% in constant currency. GAAP net income was $219.0 million, or $0.70 per diluted share, and operating cash flow was $449.3 million, up 33.7% year over year.

  2. What is Zoom's updated financial outlook?

    For the third quarter of fiscal 2025, total revenue is expected to be between $1.160 billion and $1.165 billion, with non-GAAP diluted EPS of $1.29 to $1.31. For full fiscal 2025, total revenue is expected to be between $4.630 billion and $4.640 billion, non-GAAP diluted EPS between $5.29 and $5.32, and free cash flow between $1.580 billion and $1.620 billion.

  3. Why is the CFO leaving, and who will handle the role during the transition?

    The filing states Kelly Steckelberg's decision was not the result of any disagreement with the company. She will continue as CFO through the release of earnings for the fiscal quarter ending October 31, 2024, then serve part-time starting October 10, 2024. The company has commenced a search for her successor.

  4. What did Zoom do with its share repurchases and cash position?

    Zoom repurchased approximately 4.8 million shares of common stock in the second quarter, and $1.062 billion of share repurchase authorization remained as of July 31, 2024. Total cash, cash equivalents, and marketable securities were $7.5 billion as of that date.

  5. How are Zoom's Enterprise and Online businesses trending?

    Enterprise revenue rose 3.5% year over year to $682.8 million, and the trailing 12-month net dollar expansion rate for Enterprise customers was 98%. Online revenue was flat year over year at $479.7 million, while Online average monthly churn improved to 2.9%, down 30 bps from the prior-year quarter.

04—Continue

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