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Zoom's (ZM) Q1 Earnings Top Estimates, Revenues Jump Y/Y
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Zoom’s (ZM - Free Report) first-quarter fiscal 2023 adjusted earnings of $1.03 per share beat the Zacks Consensus Estimate by 17.05% but decreased 22% year over year.
Revenues of $1.07 billion surpassed the consensus mark by 0.12% and increased 12.3% year over year.
In the reported quarter, Zoom Video revenues benefited from growth in enterprise business, which saw a steady increase in customers as well as improved renewal rates year over year.
Revenues from Enterprise customers grew 31% year over year and represented 52% of total revenues, up from 45% in first-quarter fiscal 2022. The number of Enterprise customers grew 24% year over year to over 198,900.
Strong demand for Zoom Phone impacted the growth of revenues positively. In the fiscal first quarter, Zoom Phone reached 3 million paid seats.
Zoom Video Communications, Inc. Price, Consensus and EPS Surprise
Expanding customer base was a major contributor to earnings in the reported quarter. In the fiscal first quarter, Zoom customers contributing more than $100,000 in revenues in the trailing 12 months, grew 46%. These customers accounted for 24% of revenues, up from 19% in the year-ago quarter.
Renewals in Online business improved sequentially but growth was impacted mainly by international headwinds, including the strengthening of the dollar and the Russia-Ukraine war.
This business is an attractive model from the profitability and cash flow perspective. Thus, slower growth in this business model slightly hampered bottom-line growth.
Revenues grew 14.5% in America while international market revenues from APAC grew 20.2% year over year.
Operating Details
Non-GAAP gross margin contracted from 88.3% in the year-ago quarter to 65.8% in the fiscal first quarter of 2023.
Research and development expenses declined 51.2% year over year to $41.4 million. Sales and marketing expenses declined 28.5% to $190.9 million, while general and administrative expenses decreased 20.8% to $73.4 million.
Non-GAAP operating income increased 0.3% to $400.9 million year over year. Non-GAAP operating margin contracted 450 basis points (bps) to 37.3%.
Balance Sheet and Cash Flow
Total cash, cash equivalents, and marketable securities, excluding restricted cash, as of Apr 30, 2022 was $5.7 billion. As of Jan 31, 2022, cash, cash equivalents and marketable securities were $5.4 billion.
Adjusted free cash flow was $501.1 million. As of Jan 31, 2022, adjusted free cash flow was $274 million.
Guidance
Zoom expects second-quarter fiscal 2023 revenues in the range of $1.115 billion to $1.120 billion.
Non-GAAP earnings per share are expected in the range of 90 cents to 92 cents.
For fiscal 2023, Zoom expects revenues in the range of $4.53 billion to $4.55 billion.
Non-GAAP earnings per share are expected in the range of $3.70 to $3.77.
Zacks Rank & Other Key Picks
Currently, Zoom Video carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Avnet's fourth-quarter fiscal 2022 earnings has been revised 55 cents northward to $1.96 per share over the past 30 days. For 2022, earnings estimates have moved 20.5% north to $6.83 per share in the past 30 days.
Avnet's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 21.2%. Shares of AVT have gained 4.5% in the past year.
The Zacks Consensus Estimate for Axcelis' second-quarter 2022 earnings has been revised 3 cents upward to 99 cents per share over the past 30 days. For 2022, ACLS' earnings estimates have moved 41 cents north to $4.40 per share in the past 30 days.
Axcelis' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 23.5%. Shares of ACLS have jumped 42.5% in the past year.
The Zacks Consensus Estimate for Analog Devices' second-quarter fiscal 2022 earnings has been revised 4 cents upward to $2.18 per share over the past 60 days. For fiscal 2022, earnings estimates have moved 11 cents north to $8.43 per share in the past 60 days.
Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6%. Shares of ADI have climbed 0.9% in the past year.
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Zoom's (ZM) Q1 Earnings Top Estimates, Revenues Jump Y/Y
Zoom’s (ZM - Free Report) first-quarter fiscal 2023 adjusted earnings of $1.03 per share beat the Zacks Consensus Estimate by 17.05% but decreased 22% year over year.
Revenues of $1.07 billion surpassed the consensus mark by 0.12% and increased 12.3% year over year.
In the reported quarter, Zoom Video revenues benefited from growth in enterprise business, which saw a steady increase in customers as well as improved renewal rates year over year.
Revenues from Enterprise customers grew 31% year over year and represented 52% of total revenues, up from 45% in first-quarter fiscal 2022. The number of Enterprise customers grew 24% year over year to over 198,900.
Strong demand for Zoom Phone impacted the growth of revenues positively. In the fiscal first quarter, Zoom Phone reached 3 million paid seats.
Zoom Video Communications, Inc. Price, Consensus and EPS Surprise
Zoom Video Communications, Inc. price-consensus-eps-surprise-chart | Zoom Video Communications, Inc. Quote
Quarter in Detail
Expanding customer base was a major contributor to earnings in the reported quarter. In the fiscal first quarter, Zoom customers contributing more than $100,000 in revenues in the trailing 12 months, grew 46%. These customers accounted for 24% of revenues, up from 19% in the year-ago quarter.
Renewals in Online business improved sequentially but growth was impacted mainly by international headwinds, including the strengthening of the dollar and the Russia-Ukraine war.
This business is an attractive model from the profitability and cash flow perspective. Thus, slower growth in this business model slightly hampered bottom-line growth.
Revenues grew 14.5% in America while international market revenues from APAC grew 20.2% year over year.
Operating Details
Non-GAAP gross margin contracted from 88.3% in the year-ago quarter to 65.8% in the fiscal first quarter of 2023.
Research and development expenses declined 51.2% year over year to $41.4 million. Sales and marketing expenses declined 28.5% to $190.9 million, while general and administrative expenses decreased 20.8% to $73.4 million.
Non-GAAP operating income increased 0.3% to $400.9 million year over year. Non-GAAP operating margin contracted 450 basis points (bps) to 37.3%.
Balance Sheet and Cash Flow
Total cash, cash equivalents, and marketable securities, excluding restricted cash, as of Apr 30, 2022 was $5.7 billion. As of Jan 31, 2022, cash, cash equivalents and marketable securities were $5.4 billion.
Adjusted free cash flow was $501.1 million. As of Jan 31, 2022, adjusted free cash flow was $274 million.
Guidance
Zoom expects second-quarter fiscal 2023 revenues in the range of $1.115 billion to $1.120 billion.
Non-GAAP earnings per share are expected in the range of 90 cents to 92 cents.
For fiscal 2023, Zoom expects revenues in the range of $4.53 billion to $4.55 billion.
Non-GAAP earnings per share are expected in the range of $3.70 to $3.77.
Zacks Rank & Other Key Picks
Currently, Zoom Video carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader Computer and Technology sector are Avnet (AVT - Free Report) , Axcelis Technologies (ACLS - Free Report) and Analog Devices (ADI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Avnet's fourth-quarter fiscal 2022 earnings has been revised 55 cents northward to $1.96 per share over the past 30 days. For 2022, earnings estimates have moved 20.5% north to $6.83 per share in the past 30 days.
Avnet's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 21.2%. Shares of AVT have gained 4.5% in the past year.
The Zacks Consensus Estimate for Axcelis' second-quarter 2022 earnings has been revised 3 cents upward to 99 cents per share over the past 30 days. For 2022, ACLS' earnings estimates have moved 41 cents north to $4.40 per share in the past 30 days.
Axcelis' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 23.5%. Shares of ACLS have jumped 42.5% in the past year.
The Zacks Consensus Estimate for Analog Devices' second-quarter fiscal 2022 earnings has been revised 4 cents upward to $2.18 per share over the past 60 days. For fiscal 2022, earnings estimates have moved 11 cents north to $8.43 per share in the past 60 days.
Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6%. Shares of ADI have climbed 0.9% in the past year.