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Zoom’s (ZM - Free Report) fourth-quarter fiscal 2024 adjusted earnings of $1.42 per share beat the Zacks Consensus Estimate by 23.48% and increased 16.4% year over year.
Revenues of $1.15 billion beat the consensus mark by 1.57% and increased 2.6% year over year on strong growth from Enterprise customers.
Zoom Video Communications, Inc. Price, Consensus and EPS Surprise
Revenues from Enterprise customers rose 4.9% year over year to $667.3 million and represented 58.2% of total revenues. Customers contributing more than $100,000 in revenues in the trailing 12 months grew 9.8% to 3,810. These customers accounted for 30% of revenues, up from 28% in the year-ago quarter.
The company reported a trailing 12-month net dollar expansion rate for Enterprise customers of 101%.
The number of Enterprise customers rose 3% year over year to more than 220,400.
Zoom Phone reached approximately 9.5 million paid seats. Zoom Contact Center licenses grew three times year over year, while Zoom AI Companion enabled approximately 510,000 accounts.
Revenues increased 4% in America and 0.5% in EMEA, while international market revenues from APAC decreased 3% year over year.
Non-GAAP Operating Details
Gross margin expanded 874 basis points (bps) to 75.9% in the fiscal fourth quarter of 2024.
Research and development expenses decreased 21.43% year over year to $205.28 million. Sales and marketing expenses declined 26.61% to $371.05 million, while general and administrative expenses plunged 32.82% to $125.29 million.
Operating income surged 229.75% to $168.53 million year over year. The operating margin came in at 14.7% against the year-ago quarter’s negative operating margin of 11.6%.
Balance Sheet
Total cash, cash equivalents and marketable securities as of Jan 31, 2024, were $7 billion. As of Oct 31, 2023, cash, cash equivalents and marketable securities were $6.49 billion.
Free cash flow as of Jan 31, 2023, was $332.7 million. As of Oct 31, 2023, free cash flow was $453.2 million.
Guidance
Zoom expects first-quarter fiscal 2025 revenues to be approximately $1.125 billion.
Non-GAAP earnings per share are expected in the range of $1.18 to $1.2.
For fiscal 2025, Zoom expects revenues in the range of $4.597-$4.6 billion.
Non-GAAP earnings per share are expected in the range of $4.85 to $4.88.
Zacks Rank & Key Picks
Currently, Zoom carries a Zacks Rank #3 (Hold). Shares of ZM have lost 12.2% year to date.
Image: Bigstock
Zoom (ZM) Q4 Earnings Beat, Customer Growth Drives Revenues
Zoom’s (ZM - Free Report) fourth-quarter fiscal 2024 adjusted earnings of $1.42 per share beat the Zacks Consensus Estimate by 23.48% and increased 16.4% year over year.
Revenues of $1.15 billion beat the consensus mark by 1.57% and increased 2.6% 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 rose 4.9% year over year to $667.3 million and represented 58.2% of total revenues. Customers contributing more than $100,000 in revenues in the trailing 12 months grew 9.8% to 3,810. These customers accounted for 30% of revenues, up from 28% in the year-ago quarter.
The company reported a trailing 12-month net dollar expansion rate for Enterprise customers of 101%.
The number of Enterprise customers rose 3% year over year to more than 220,400.
Zoom Phone reached approximately 9.5 million paid seats. Zoom Contact Center licenses grew three times year over year, while Zoom AI Companion enabled approximately 510,000 accounts.
Revenues increased 4% in America and 0.5% in EMEA, while international market revenues from APAC decreased 3% year over year.
Non-GAAP Operating Details
Gross margin expanded 874 basis points (bps) to 75.9% in the fiscal fourth quarter of 2024.
Research and development expenses decreased 21.43% year over year to $205.28 million. Sales and marketing expenses declined 26.61% to $371.05 million, while general and administrative expenses plunged 32.82% to $125.29 million.
Operating income surged 229.75% to $168.53 million year over year. The operating margin came in at 14.7% against the year-ago quarter’s negative operating margin of 11.6%.
Balance Sheet
Total cash, cash equivalents and marketable securities as of Jan 31, 2024, were $7 billion. As of Oct 31, 2023, cash, cash equivalents and marketable securities were $6.49 billion.
Free cash flow as of Jan 31, 2023, was $332.7 million. As of Oct 31, 2023, free cash flow was $453.2 million.
Guidance
Zoom expects first-quarter fiscal 2025 revenues to be approximately $1.125 billion.
Non-GAAP earnings per share are expected in the range of $1.18 to $1.2.
For fiscal 2025, Zoom expects revenues in the range of $4.597-$4.6 billion.
Non-GAAP earnings per share are expected in the range of $4.85 to $4.88.
Zacks Rank & Key Picks
Currently, Zoom carries a Zacks Rank #3 (Hold). Shares of ZM have lost 12.2% year to date.
Some better-ranked stocks from the broader Computer and Technology sector are Dell Technologies (DELL - Free Report) , ACM Research (ACMR - Free Report) and Bandwidth (BAND - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Dell Technologies have jumped 21.3% year to date. DELL is scheduled to release fourth-quarter fiscal 2024 results on Feb 29.
Shares of ACM Research have gained 10.5% year to date. ACMR is set to report its fourth-quarter 2023 results on Feb 28.
Shares of Bandwidth have lost 17.3% year to date. BAND is set to report its fourth-quarter 2023 results on Feb 28.