Zoom Q4 Earnings Surpass Estimates, Revenues Increase Y/Y

Core Insights - Zoom's fourth-quarter fiscal 2025 adjusted earnings per share (EPS) were $1.41, exceeding the Zacks Consensus Estimate by 7.63% but showing a year-over-year decrease of 0.7% [1] - The company reported revenues of $1.184 billion, surpassing the consensus mark by 0.50% and increasing 3.29% year over year [2] Financial Performance - Enterprise revenues, which accounted for 59.69% of total revenues, rose 5.9% year over year to $706.8 million [3] - The number of customers contributing over $100,000 in revenues in the trailing 12 months grew by 7.3% to 4,088, representing 31% of total revenues [3] - The total number of Enterprise customers at the end of the fiscal fourth quarter was approximately 192,600, with a net dollar expansion rate of 98% for Enterprise customers [4] Strategic Developments - Zoom achieved its largest Annual Recurring Revenue (ARR) deal in history with a Fortune 100 U.S. tech company in its Contact Center, with the number of Contact Center customers with over $100,000 in ARR growing more than 100% year over year [5] - The company also saw an 89% year-over-year growth in customers for Workvivo and signed three new deals with more than $1 million in ARR [5] Operating Metrics - Non-GAAP gross margin for the fiscal third quarter was 78.22%, up from 69.80% in the previous year, attributed to strategic investments in AI innovation [6] - Non-GAAP operating income increased by 5.46% year over year to $467.96 million, with an operating margin of 40.82% compared to 39.70% in the prior year [7] Balance Sheet and Cash Flow - As of January 31, 2025, total cash, cash equivalents, and marketable securities were $7.8 billion, up from $7.7 billion as of October 31, 2024 [8] - Net cash provided by operating activities for the fiscal fourth quarter was $424.6 million, reflecting a 20.9% year-over-year increase, while free cash flow rose by 25.1% to $416.2 million [8] Guidance - For the first quarter of fiscal 2026, Zoom expects revenues between $1.162 billion and $1.167 billion, with non-GAAP EPS anticipated in the range of $1.29 to $1.31 [9] - For fiscal 2026, the company projects revenues between $4.785 billion and $4.795 billion, with non-GAAP EPS expected to be between $5.34 and $5.37 [10]