As firms throttle back on mandatory home working, many analysts have pondered whether breakout pandemic conferring leader Zoom Communications will begin a downward trajectory, but its first-quarter 2022 results suggest this may not be for some time yet.
The three-month period ended 30 April 2022 saw the core conferencing solution complemented with the launch of Zoom Contact Center, Zoom Whiteboard and Zoom IQ for Sales, a conversation intelligence service for sales professionals, as well as Zoom Events and Webinar functionalities such as Backstage and Webinar session branding.
These offerings are designed to put engagement at the centre of the experience and transform the way users work, connect and collaborate. The company said the products demonstrated its focus on enhancing the customer experience and promoting hybrid work.
In the quarter, the company posted total revenue of $1.074bn, up 12% year on year, with GAAP income from operations of $187.1m and non-GAAP income from operations of $399.6m. GAAP operating margin was 17.4% and non-GAAP operating margin was 37.2%. Total cash, cash equivalents and marketable securities, excluding restricted cash, was $5.7bn as of 30 April 2022.
Strong customer metrics formed the engine of the firm’s revenue increase, including acquiring new customers and expanding across existing customers. At the end of the first quarter of fiscal year 2023, Zoom had about 198,900 enterprise customers, up 24% from the same quarter last fiscal year. It also had a trailing 12-month net dollar expansion rate for enterprise customers of 123% and 2,916 customers contributed more than $100,000 in trailing 12-month revenue, up about 46% from the same quarter last fiscal year.
Looking at the drivers for the growth, and assessing the trends revealed in the company’s first-quarter results, Zoom founder and CEO Eric S Yuan said the new launches would further expand the company’s market opportunity for future growth and expansion with customers.
“In Q1, we delivered revenue of over $1bn driven by ongoing success in Enterprise, Zoom Rooms and Zoom Phone, which reached three million seats during the quarter,” he said. “We also maintained strong profitability and cash flow, including 17% in GAAP operating margin, approximately 37% non-GAAP operating margin, approximately 49% operating cash flow margin, and over 46% adjusted free cash flow margin.”
Going forward, for its second quarter in the fiscal year, Zoom expected total revenue to be between $1.115bn and $1.12bn and non-GAAP income from operations to be between $360m and $365m. Non-GAAP diluted EPS is forecast to be between $0.90 and $0.92, with about 308 million non-GAAP weighted average shares outstanding.
For the full 2023 fiscal year, total revenue is now expected to be between $4.53bn and $4.55bn and non-GAAP income from operations to be between $1.48bn and $1.5bn.
Read more about Zoom
- In the next step of progression from being the pandemic’s breakout collaboration services leader, Zoom furthers contact centre expansion with Solvvy acquisition, adding advanced conversational AI and automation capabilities.
- Videoconferencing platform Zoom adds multiple third-party security certifications and service updates in new round of cyber security enhancements.
- Zoom has agreed to let RingCentral customers continue using the Zoom-powered product Meetings and will also give companies time to move to RingCentral’s homegrown product.