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Zoom’s (ZM - Free Report) fourth-quarter fiscal 2023 adjusted earnings of $1.22 per share beat the Zacks Consensus Estimate by 54.4% but decreased 5.4% year over year.
Revenues of $1.11 billion beat the consensus mark by 1.62% and increased 4.3% year over year on strong growth from enterprise customers.
Zoom Video Communications, Inc. Price, Consensus and EPS Surprise
Revenues from Enterprise customers grew 18% year over year and represented 57% of total revenues, up from 50% in fourth-quarter fiscal 2022. This was evident in the 27% growth in customers which came in at 3,471 contributing more than $100,000 in trailing 12 months revenues. These customers accounted for 28% of revenues, up from 23% in the year-ago quarter and span diverse industries, such as healthcare, education, government and more.
The company reported a trailing 12-month net dollar expansion rate for Enterprise customers of 115%.
The number of Enterprise customers grew 12% year over year to more than 213,000. Zoom One adoption continued to accelerate and help drive Zoom Phone to grow more than 100% year over year, surpassing 5.5 million seats in fourth-quarter. Emerging technologies, such as Zoom Contact Center picked up pace as customer experience teams recognized the value of a modern and integrated collaboration solution.
Revenues dropped 9.2% in America, while international market revenues from APAC grew 6.2% year over year. EMEA revenues increased 9.9% year over year.
Operating Details
Non-GAAP gross margin expanded 150 basis points (bps) to 79.8% in the fiscal fourth quarter of 2023.
Research and development expenses increased 42.6% year over year to $103 million. Sales and marketing expenses increased 19.5% to $300.2 million, while general and administrative expenses decreased 11.6% to $83.9 million.
Non-GAAP operating income decreased 3.7% to $404.8 million year over year. Non-GAAP operating margin contracted 300 bps to 36.2%.
Balance Sheet and Cash Flow
Total cash, cash equivalents and marketable securities as of Jan 31, 2022, was $5.41 billion. As of Oct 31, 2022, cash, cash equivalents and marketable securities were $5.17 billion.
Free cash flow was $183.2 million. As of Oct 31, 2022, adjusted free cash flow was $222.1 million.
Guidance
Zoom expects first-quarter fiscal 2024 revenues in the range of $1.08 billion to $1.085 billion.
Non-GAAP earnings per share are expected in the range of 96 cents to 98 cents.
For fiscal 2024, Zoom expects revenues in the range of $4.435 billion to $4.455 billion.
Non-GAAP earnings per share are expected in the range of $4.11 to $4.18.
Zacks Rank & Other Key Picks
Currently, Zoom Video carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Airbnb’s first-quarter 2023 earnings has been revised northward from breakeven to 14 cents per share over the past seven days. For 2023, earnings estimates have moved up by 52 cents to $3.38 per share in the past seven days.
ABNB's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 57.2%. Shares of the company have declined 19.1% in the past year.
The Zacks Consensus Estimate for Baidu’s fourth-quarter 2022 earnings has been revised 49 cents southward to $2.14 per share over the past 30 days. For 2022, earnings estimates have dropped by 3.4% to $8.64 per share over the past 30 days.
BIDU’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 50.2%. Shares of the company have lost 9.9% in the past year.
The Zacks Consensus Estimate for Fabrinet's third-quarter fiscal 2023 earnings has been revised 7 cents upward to $1.90 per share over the past 30 days. For fiscal 2023, earnings estimates have moved north by 24 cents to $7.71 per share in the past 30 days.
FN’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing once, the average surprise being 5.1%. Shares of the company have jumped 21.8% in the past year.
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Zoom (ZM) Q4 Earnings Beat, Customer Growth Drives Revenues
Zoom’s (ZM - Free Report) fourth-quarter fiscal 2023 adjusted earnings of $1.22 per share beat the Zacks Consensus Estimate by 54.4% but decreased 5.4% year over year.
Revenues of $1.11 billion beat the consensus mark by 1.62% and increased 4.3% year over year on strong growth from enterprise customers.
Zoom Video Communications, Inc. Price, Consensus and EPS Surprise
Zoom Video Communications, Inc. price-consensus-eps-surprise-chart | Zoom Video Communications, Inc. Quote
Quarter Details
Revenues from Enterprise customers grew 18% year over year and represented 57% of total revenues, up from 50% in fourth-quarter fiscal 2022. This was evident in the 27% growth in customers which came in at 3,471 contributing more than $100,000 in trailing 12 months revenues. These customers accounted for 28% of revenues, up from 23% in the year-ago quarter and span diverse industries, such as healthcare, education, government and more.
The company reported a trailing 12-month net dollar expansion rate for Enterprise customers of 115%.
The number of Enterprise customers grew 12% year over year to more than 213,000. Zoom One adoption continued to accelerate and help drive Zoom Phone to grow more than 100% year over year, surpassing 5.5 million seats in fourth-quarter. Emerging technologies, such as Zoom Contact Center picked up pace as customer experience teams recognized the value of a modern and integrated collaboration solution.
Revenues dropped 9.2% in America, while international market revenues from APAC grew 6.2% year over year. EMEA revenues increased 9.9% year over year.
Operating Details
Non-GAAP gross margin expanded 150 basis points (bps) to 79.8% in the fiscal fourth quarter of 2023.
Research and development expenses increased 42.6% year over year to $103 million. Sales and marketing expenses increased 19.5% to $300.2 million, while general and administrative expenses decreased 11.6% to $83.9 million.
Non-GAAP operating income decreased 3.7% to $404.8 million year over year. Non-GAAP operating margin contracted 300 bps to 36.2%.
Balance Sheet and Cash Flow
Total cash, cash equivalents and marketable securities as of Jan 31, 2022, was $5.41 billion. As of Oct 31, 2022, cash, cash equivalents and marketable securities were $5.17 billion.
Free cash flow was $183.2 million. As of Oct 31, 2022, adjusted free cash flow was $222.1 million.
Guidance
Zoom expects first-quarter fiscal 2024 revenues in the range of $1.08 billion to $1.085 billion.
Non-GAAP earnings per share are expected in the range of 96 cents to 98 cents.
For fiscal 2024, Zoom expects revenues in the range of $4.435 billion to $4.455 billion.
Non-GAAP earnings per share are expected in the range of $4.11 to $4.18.
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 Airbnb (ABNB - Free Report) , Baidu (BIDU - Free Report) , and Fabrinet (FN - 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 Airbnb’s first-quarter 2023 earnings has been revised northward from breakeven to 14 cents per share over the past seven days. For 2023, earnings estimates have moved up by 52 cents to $3.38 per share in the past seven days.
ABNB's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 57.2%. Shares of the company have declined 19.1% in the past year.
The Zacks Consensus Estimate for Baidu’s fourth-quarter 2022 earnings has been revised 49 cents southward to $2.14 per share over the past 30 days. For 2022, earnings estimates have dropped by 3.4% to $8.64 per share over the past 30 days.
BIDU’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 50.2%. Shares of the company have lost 9.9% in the past year.
The Zacks Consensus Estimate for Fabrinet's third-quarter fiscal 2023 earnings has been revised 7 cents upward to $1.90 per share over the past 30 days. For fiscal 2023, earnings estimates have moved north by 24 cents to $7.71 per share in the past 30 days.
FN’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing once, the average surprise being 5.1%. Shares of the company have jumped 21.8% in the past year.