01—Abstract
Summary
Summary of the 8-K filed November 25, 2024. Cited figures are marked; the original filing is the authoritative source.
Zoom Communications, Inc. (formerly Zoom Video Communications, Inc.) reported results for its third fiscal quarter of 2025, the three months ended October 31, 2024.
Total revenue was $1,177.5 milliona, up 3.6% year over year. Enterprise revenue rose 5.8% to $698.9 million, while Online revenue was flat at $478.7 million. GAAP net income was $207.1 million, or $0.66 per diluted share, compared with $141.2 million, or $0.45 per diluted share, a year earlier.
GAAP operating margin was 15.5% and non-GAAP operating margin was 38.9%. Free cash flow was $457.7 millionb, up 1.0% year over year, and the company ended the quarter with $7.7 billion in cash, cash equivalents, and marketable securities. The board authorized an additional $1.2 billion of share repurchases, bringing the total remaining authorization to approximately $2.0 billion.
The company repurchased approximately 4.4 million shares in the quarter. Management guided fourth-quarter fiscal 2025 total revenue to $1.175 billion to $1.180 billionc and full-year fiscal 2025 total revenue to $4.656 billion to $4.661 billion. Full-year non-GAAP diluted EPS is expected to be $5.41 to $5.43, and full-year free cash flow $1.580 billion to $1.620 billion.
The company also changed its corporate name effective November 25, 2024, with the Class A common stock continuing to trade on Nasdaq under the ticker ZM. The name change did not require a stockholder vote, and the bylaws were amended only to reflect the new name.
02—Key points
Key Highlights
- Total revenue of $1,177.5 million, up 3.6% year over year; Enterprise revenue of $698.9 million, up 5.8%; Online revenue of $478.7 million, flat year over year.
- GAAP net income of $207.1 million, or $0.66 per diluted share, versus $0.45 per diluted share in the prior-year quarter; non-GAAP net income per diluted share of $1.38.
- GAAP operating margin of 15.5% and non-GAAP operating margin of 38.9%; GAAP income from operations of $182.8 million, up from $169.4 million.
- Free cash flow of $457.7 million, up 1.0% year over year; net cash provided by operating activities was $483.2 million, down 2.0% year over year.
- Board authorized an additional $1.2 billion of stock repurchases, for approximately $2.0 billion remaining; about 4.4 million shares were repurchased in the quarter.
- Customers contributing more than $100,000 in trailing 12-month revenue rose 7.1% to 3,995; Online average monthly churn improved to 2.7%, down 30 bps year over year.
- Fiscal 2025 guidance: total revenue of $4.656 billion to $4.661 billion, non-GAAP diluted EPS of $5.41 to $5.43, and free cash flow of $1.580 billion to $1.620 billion.
03—Questions
Frequently Asked Questions
What were Zoom's key financial results for the quarter ended October 31, 2024?
Total revenue was $1,177.5 million, up 3.6% year over year. GAAP net income was $207.1 million, or $0.66 per diluted share, and free cash flow was $457.7 million, up 1.0% year over year.
How did Enterprise and Online revenue perform?
Enterprise revenue was $698.9 million, up 5.8% year over year. Online revenue was $478.7 million, flat year over year. The company reported 192,400 Enterprise customers and a trailing 12-month net dollar expansion rate of 98%.
What is Zoom's outlook for fiscal 2025?
For the fourth quarter, total revenue is expected to be $1.175 billion to $1.180 billion and non-GAAP diluted EPS $1.29 to $1.30. For the full year, total revenue is expected to be $4.656 billion to $4.661 billion, non-GAAP diluted EPS $5.41 to $5.43, and free cash flow $1.580 billion to $1.620 billion. The EPS and share count figures exclude the impact of the new repurchase authorization.
What capital return actions did the company announce?
The board authorized an additional $1.2 billion of Class A common stock repurchases, bringing the total remaining to approximately $2.0 billion. About 4.4 million shares were repurchased in the third quarter. The program will be funded from working capital, and it may be suspended or discontinued at any time.
Does the name change affect the stock or the company's structure?
Effective November 25, 2024, the company changed its name from Zoom Video Communications, Inc. to Zoom Communications, Inc. No stockholder vote was required, the bylaws were amended only to reflect the new name, and the Class A common stock continues to trade on Nasdaq under the ticker ZM.
04—Continue