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Enterprise sector shines in steady Q1 for Zoom

Zoom’s latest financial results show continued growth beyond its roots, driven by a commitment to meet customer needs and enhance productivity

Showing the way its business has continued to grow beyond its core roots in conferencing services, Zoom Video Communications’ results for the first quarter of its 2025 financial year show solid revenue growth, particularly in its enterprise business, and notable increases in operating cash levels.

For the fiscal quarter to 30 April 2024, Zoom posted revenue of $1.141bn, up 3.2% year on year. Adjusting for foreign currency impact, revenue in constant currency was $1.144bn, representing a rise of 3.5%. Online revenue was $475.5m, flat on an annual basis, but enterprise revenue was $665.7m, up by 5.3% compared with the same quarter a year ago.

These revenues took first-quarter GAAP income from operations to $203m, a massive rise over the past 12 months, compared with the $9.7m in the first quarter of fiscal year 2024. After adjusting for stock-based compensation expenses and related payroll taxes, acquisition-related expenses, restructuring expenses and litigation settlements, net non-GAAP income from operations for the first quarter was $456.6m, compared with non-GAAP income from operations of $422.3m in the first quarter of fiscal year 2024.

GAAP net income for the first quarter was $216.3m, up from $15.4m in the same quarter last year. Non-GAAP net income for the quarter was $426.3m, up by $73m compared with the year-ago figure.

Revenue drivers included acquiring new customers. At the end of the first quarter of 2025, Zoom had 3,883 customers contributing more than $100,000 in trailing 12-month revenue, up approximately 8.5% year on year. Most importantly, it now has approximately 191,000 enterprise customers, with a trailing 12-month net dollar expansion rate for enterprise customers of 99%.

As part of a plan to enhance customer experience and improve efficiency, Zoom took approximately 26,800 enterprise customers with lower monthly recurring revenue (MRR) away from working with direct sales teams, resellers or strategic partners during the first quarter of fiscal year 2025.

The company stressed that the impact of this transition did not have a material impact on the percent of revenue from enterprise and online business lines, net dollar expansion rate or average monthly churn for the online business where such customers will in future be counted. The percentage of total online MRR from online customers with a continual term of service of at least 16 months was 73.8%, up 180 basis points year over year.

Assessing the key trends it experienced in the quarter, Zoom stressed that it had now expanded far beyond video, driven by a commitment to meet customer needs and enhance productivity. It claimed this strategic approach had “transformed” it into a “powerhouse” for communication and collaboration, with integrated artificial intelligence (AI) contributing to positive results. 

“In Q1, we continued to integrate AI across our platform, including Zoom Contact Centre and Zoom Workplace, our AI-powered collaboration platform that provides customers the ability to reimagine teamwork by streamlining communications, increasing employee engagement, and improving productivity within their organisations,” said Zoom founder and CEO Eric Yuan. “These innovations, combined with our execution and focused investment, enabled us to outperform our guidance and drive operating cashflow.”

Given the first-quarter performance, Zoom expects second-quarter revenue to be between $1.145bn and $1.150bn, and revenue in constant currency of between $1.147bn and $1.152bn. Total revenue for the full fiscal year 2025 is projected to be between $4.610bn and $4.620bn, and revenue in constant currency is expected to be between $4.616bn and $4.626bn. Full fiscal year non-GAAP income from operations is expected to be between $1.740bn and $1.750bn.

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