Zoom's Q4 2025 Earnings: AI Drives Growth Amid Mixed Revenue Results

Zoom Sees AI Momentum as Enterprise Revenue Grows | The Motley Fool

Zoom (ZM -1.71%) hosted its fourth-quarter and full fiscal-year 2025 earnings call on February 24, 2025. CEO Eric Yuan described fiscal year 2025 as "an incredible year, marked by a major advancement in AI, the evolution of Zoom into an AI-first work platform, spanning Phone, Teams Chat, Events, Docs and more, and a strong momentum in Contact Center and Workvivo." Monthly active users of Zoom AI Companion grew 68% quarter over quarter, which management cited as "demonstrating the real value AI is providing customers." AI Companion has emerged as a driving force behind our transformation into an AI-first company, enabling our customers to discover enhanced productivity opportunities. ... In April, we're launching the custom AI Companion add-on to automate workplace [hubs] through custom agents. This will personalize AI to feed the customer needs connected with our existing data and work seamlessly with their third-party tools. -- Eric Yuan, Founder, President, CEO & Chairman Management outlined their pricing approach for the upcoming Custom AI Companion: We think that the $12 price point is going to be a really compelling TCO [total cost of ownership] story for our customers, it's differentiated from what others in the market are pricing now. -- Michelle Chang, Chief Financial Officer Enterprise revenue grew 6% year over year and now comprises 60% of total revenue. The company secured a notable enterprise win with Amazon (NASDAQ: AMZN), marking a transition from Amazon's previous use of Chime. We are excited to offer Zoom to Amazon employees and further strengthen our long-standing relationship with AWS as our preferred cloud provider. This builds on the success we've achieved helping customers easily procure and deploy Zoom through AWS marketplace. -- Eric Yuan, Founder, President, CEO & Chairman The quarter included the company's largest Contact Center deal to date, with a Fortune 100 tech company deploying over 15,000 agents. The number of Contact Center customers with over $100,000 in ARR grew over 100% year over year, with wins both displacing on-prem and leading CCAR vendors. Our AI-first approach is resonating strongly. -- Eric Yuan, Founder, President, CEO & Chairman Seven of the top 10 Contact Center deals came from cloud vendor displacement, with three from on-premises migrations, according to management. The Workvivo employee communications platform showed continued growth, with customer count increasing 89% year-over-year and three deals over $1 million in annual recurring revenue (ARR). Workvivo also had a record quarter driven by strength across all regions. The total number of Workvivo customers grew 89% year-over-year, accelerating from 79% in Q3. ... Our strategic partnership as a preferred migration partner for Meta Workplace has been a strong contributor to this momentum. -- Eric Yuan, Founder, President, CEO & Chairman The platform secured Delta Air Lines (NYSE: DAL) as a customer for their global workforce following Meta Workplace's sunsetting. The company maintained its non-GAAP operating margin at 39.5% while reducing stock-based compensation to 20% of revenue (which is still a high number, to be frank), even as it invested in AI capabilities. We're very pleased with our margin finish in FY '25. And while we don't guide to the margin in '26, I feel good that our increased usage in AI and our spend there is going to be offset by efficiencies. -- Michelle Chang, Chief Financial Officer Management described the demand environment as "mixed but stable to the positive," noting record low churn rates in the online segment and sequential improvements in enterprise customer retention. The company outlined three strategic priorities for fiscal year 2026: "Expanding our AI capabilities to drive customer value; rapidly innovating within Zoom Workplace; and building upon momentum in new products such as Contact Center and Workvivo." Yuan said that Zoom's innovation engine and platform strategy are clicking, "and we have significant opportunities and growth vectors to execute upon."

Zoom's Fiscal Q4 2025 Profits Top Estimates | The Motley Fool

Zoom Communications posted better-than-expected earnings thanks to advancements in AI and robust enterprise growth. Zoom Communications (ZM -1.70%), known for its video conferencing service and unified communication solutions, announced its fiscal fourth-quarter 2025 results on Feb. 24. The company reported earnings per share (EPS) of $1.41, beating analysts' consensus predictions of $1.30. Revenue rose 3.3% to $1.184 billion, exceeding projections of $1.178 billion. Overall, the quarter indicated solid operational performance but modest revenue growth due to competitive pressures. Source: Analysts' estimates provided by FactSet. Zoom Communications has carved out a niche in the communications sector by providing video conferencing and voice call solutions across the globe. It's best known for its seamless communication platform that facilitates teleconferencing services for businesses, educational institutions, and individuals. Recently, it has been focused on artificial intelligence (AI) innovations such as its Zoom AI Companion. The company's growth strategy also hinges on expanding its customer base among enterprise clients. This segment provided around 59% of its total revenue in the quarter, and the number of Zoom clients contributing over $100,000 in revenue over the past four quarters increased by 7.3%. During the fiscal quarter, which ended Jan. 31, Zoom witnessed a 3.3% year-over-year rise in total revenue, driven largely by a 5.9% increase in enterprise revenue to $706.8 million. Operating cash flow surged by 20.9% year over year to $424.6 million, while free cash flow jumped 25.1%. Notably, Zoom's GAAP operating margin improved 430 basis points year over year to 19%. The improvements were likely tied to the company's completion of its restructuring moves. Zoom is investing heavily in AI-driven initiatives to retain competitiveness in its market, and CEO Eric S. Yuan reiterated its commitment to evolving into an "AI-first company," expanding its capability range beyond standard video conferencing services. For its fiscal 2026, Zoom is guiding for revenues of between $4.785 billion and $4.795 billion, which suggests moderate growth in the near term. Management anticipates maintaining its non-GAAP EPS in the range of $5.34 to $5.37, focusing on efficiency to sustain profitability despite competitive pressures. Continued attention is being paid to customer retention. The company's net dollar expansion rate for enterprise clients remains just below 100%, reflecting mild challenges in customer upselling. Moving forward, Zoom plans to leverage AI integration across its services to enhance its competitive stance against players like Microsoft Teams. Investors should note Zoom's focus on AI-driven solutions, exploring hybrid work enhancements, and sustaining its enterprise segment growth as crucial elements for upcoming quarters.

Zoom Eyes AI-Powered Growth, Analyst Highlights Innovation Momentum, Revenue Challenges - Zoom Communications (NASDAQ:ZM)

JPMorgan analyst Mark R. Murphy maintained a Neutral rating on Zoom Communications Inc ZM with a price target of $80. Zoom reported fourth-quarter revenue of $1.18 billion, up 3.3%, which is in-line with analyst estimates. The communications company reported fourth-quarter adjusted earnings of $1.41 per share, beating analyst estimates of $1.30 per share. Also Read: Huawei Boosts AI Chip Production Despite Taiwan Semi And ASML Ban, Aims to Challenge Nvidia In China Zoom expects first-quarter revenue of $1.162 billion-$1.167 billion. The company sees first-quarter adjusted earnings of $1.29-$1.31 per share. Coming into Zoom's fourth-quarter earnings, Murphy called out, as he had consistently throughout this earnings season, headwinds likely to arise from FX and the leap year dynamics, which were factors in Zoom's results. The analyst said Zoom could see a similar upside to fourth-quarter total revenue guidance as it did in the second and third quarters and potentially continue modest growth acceleration from the third to the fourth quarter, which did not play out. The analyst also noted the fiscal 2026 Street consensus growth hurdle was achievable on a constant currency basis. While there are puts and takes around leap year impacts, Zoom's first-blush fiscal 2026 revenue constant currency growth guidance comes in a tick below Street consensus or just about meets it under the most generous adjustments. As a reminder, Zoom stated during its first-quarter earnings call approximately nine months ago that the second quarter would be " the low point for fiscal 2025 from a year-over-year growth perspective, and then seeing reacceleration in the back half from there." While Zoom technically accelerated growth from 2.7% in the first half to 3.4% in the second half, Murphy said investors were hoping for consistent growth acceleration from quarter to quarter and conceivably fiscal 2026 revenue growth guidance that implies acceleration. The company has been discussing product initiatives to drive growth for some time. For reference, constant currency growth was 3.5% in the first quarter, 2.4% in the second quarter, 3.6% in the third quarter and 3.6% in the fourth quarter. Zoom is now guiding fiscal 2026 total revenue growth to 3.1% constant currency and, while not necessarily raising new concerns, continues to call out a mixed aspect to the macro environment. Zoom continues to trade at a relatively low free cash flow multiple, though admittedly heavily boosted by SBC. However, Murphy said a rerating catalyst is in and would most likely be revenue growth acceleration toward the mid-high single digits or beyond. The analyst reiterated his positive view of Zoom's innovation track record and meaningful momentum in proliferating AI through its install base and remained constructive overall. However, the lack of a clear growth catalyst beyond a few gradually developing points that can be sketched out kept the analyst on the sidelines. Murphy projected first-quarter revenue of $1.14 billion and adjusted EPS of $1.35. The price target is based on ~10 times EV/calendar 2026E unlevered free cash flow (uFCF). The multiple is at a discount to Zoom Video's primary comp set of Software Vendors with mid-high single-digit calendar 2026E growth and uFCF margin of ~20% or more, which trade at ~20 times EV/calendar 2025E uFCF on average. Murphy noted a discount is warranted given Zoom's inferior FTM growth profile, FTM GAAP operating margin and competitive dynamics within the communications software market. ZM Price Action: Zoom stock is down 9.08% at $73.74 at publication Tuesday. Also Read: International Game Technology Misses Q4 Earnings Estimates Amid Jackpot Slowdown Photo: Courtesy Zoom ZMZoom Communications Inc$73.37-9.53%OverviewMarket News and Data brought to you by Benzinga APIs

Zoom Communications Q4 Earnings: EPS Beat, Revenue In Line As Company Continues Transformation Into 'AI-First Company' - Zoom Communications (NASDAQ:ZM)

Get access to your new suite of high-powered trading tools, including real-time stock ratings, insider trades, and government trading signals. Zoom Communications Inc ZM reported fourth-quarter financial results after the market close on Monday. Here's a rundown of the report. Q4 Earnings: Zoom reported fourth-quarter revenue of $1.18 billion, in line with analyst estimates. The communications company reported fourth-quarter adjusted earnings of $1.41 per share, beating analyst estimates of $1.30 per share. Zoom has now met or exceeded analyst estimates on the top and bottom lines in ten consecutive quarters, according to data from Benzinga Pro. Total revenue was up 3.3% on a year-over-year basis. Enterprise revenue was up 5.9% year-over-year, while online revenue fell 0.4% year-over-year. Zoom noted online monthly average churn was down 20 basis points to 2.8% in the quarter. Zoom ended the quarter with approximately 192,600 enterprise customers. Net cash provided by operating activities was $424.6 million in the fourth quarter, up 20.9% year-over-year. Free cash flow came in at $416.2 million, up 25.1% year-over-year. Zoom ended the quarter with $7.8 billion in cash, cash equivalents and marketable securities. "In FY25, Zoom AI Companion emerged as the driving force behind our transformation into an AI-first company, enabling our customers to discover enhanced productivity opportunities. As Zoom AI Companion becomes increasingly agentic, we look forward to continuing to help our customers fully realize the benefits of AI and discover what's possible with AI agents," said Eric Yuan, founder and CEO of Zoom. See Also: US Lawmakers Demand EU Clarify Big Tech Regulations That 'May Target American Companies' Outlook: Zoom expects first-quarter revenue to be in the range of $1.162 billion to $1.167 billion. The company sees first-quarter adjusted earnings of $1.29 to $1.31 per share. Zoom sees full-year 2026 revenue in the range of $7.785 billion to $4.795 billion. The company expects full-year adjusted earnings to be between $5.34 and $5.37 per share. Zoom executives will further discuss the quarter on a call with investors and analysts set for 5 p.m. ET. ZM Price Action: Zoom shares were down 2.25% after hours, trading at $79.27 at the time of publication Monday, according to Benzinga Pro. Read Next: Palantir Extends Losses, Microsoft Slides: What's Driving Markets Monday? Photo: Courtesy of Zoom Communications. ZMZoom Communications Inc $79.45-3.70% Overview Market News and Data brought to you by Benzinga APIs

Zoom Communications Stock Is Falling Tuesday: Here's Why - Zoom Communications (NASDAQ:ZM)

Zoom Communications Inc ZM shares are trading lower Tuesday after the company reported fourth-quarter financial results and issued weak guidance. Q4 Revenue: $1.18 billion, versus estimates of $1.18 billion Q4 EPS: $1.41, versus estimates of $1.30 Revenue was up 3.3% on a year-over-year basis. Enterprise revenue was up 5.9% year-over-year, while online revenue fell 0.4% year-over-year. Zoom noted online monthly average churn was down 20 basis points to 2.8% in the quarter. Zoom ended the quarter with approximately 192,600 enterprise customers. Net cash provided by operating activities was $424.6 million in the fourth quarter, up 20.9% year-over-year. Free cash flow came in at $416.2 million, up 25.1% year-over-year. Zoom ended the quarter with $7.8 billion in cash, cash equivalents and marketable securities. "In FY25, Zoom AI Companion emerged as the driving force behind our transformation into an AI-first company, enabling our customers to discover enhanced productivity opportunities," said Eric Yuan, founder and CEO of Zoom. "As Zoom AI Companion becomes increasingly agentic, we look forward to continuing to help our customers fully realize the benefits of AI and discover what's possible with AI agents." See Also: Home Depot Lifts Annual Dividend After Strong Q4, But Soft 2025 Outlook Weighs On Stock Guidance: Zoom sees first-quarter revenue in the range of $1.162 billion to $1.167 billion versus estimates of $1.175 billion. The company expects first-quarter adjusted earnings to be between $1.29 and $1.31 per share versus estimates of $1.35 per share. Zoom expects full-year 2026 revenue to be in the range of $7.785 billion to $4.795 billion versus estimates of $4.81 billion. The company expects full-year adjusted earnings to be between $5.34 and $5.37 per share versus estimates of $5.36 per share. Analyst Changes: Needham analyst Ryan Koontz reiterated Zoom with a Hold rating. Stifel analyst Parker Lane maintained a Hold and lowered the price target from $90 to $85. Rosenblatt analyst Catharine Trebnick maintained a Buy rating and price target of $95. Cantor Fitzgerald analyst Thomas Blakey reiterated a Neutral rating and price target of $87. Benchmark analyst Matthew Harrigan reiterated a Buy rating and price target of $97. ZM Price Action: Zoom shares were down 9.08% at $73.74 at the time of publication Tuesday, according to Benzinga Pro. Photo: courtesy of Zoom. ZMZoom Communications Inc$73.67-9.16%OverviewMarket News and Data brought to you by Benzinga APIs

Zoom reports earnings beat but first-quarter guidance disappoints investors - SiliconANGLE

Zoom reports earnings beat but first-quarter guidance disappoints investors Shares in Zoom Communications Inc. were down slightly in late trading today after the online communications company fell short of expectations with its first-quarter outlook despite reporting a beat in earnings in its fiscal 2025 fourth quarter. For the quarter that ended on Jan. 31, Zoom reported adjusted earnings per share of $1.41, down from $1.42 in the same quarter of the previous fiscal year, on revenue of $1.18 billion, up 3.3% year-over-year. The adjusted earnings per share came in ahead of the $1.30 expected by analysts, while revenue was in line with the $1.18 billion expected. Across its verticals, Zoom saw enterprise revenue in the quarter of $706.8 million, up 5.9% year-over-year, while online revenue came in at $477.3 million, down 0.4% year-over-year. As of the end of the quarter, Zoom had approximately 192,600 enterprise customers with a trailing 12-month net dollar expansion rate of 98%. The company also had 4,088 customers contributing more than $100,000 in trailing 12 months revenue, up 7.3% from the same quarter in the previous fiscal year. Customer wins in the quarter include Amazon.com Inc., a leading global airline and a cloud software group. While Zoom notes in its investor presentation that Amazon was a fourth-quarter win, the deal wasn't announced publicly until Feb. 20. Under the deal, Amazon is adopting Zoom as its main internal meeting app in place of Chime, Amazon's in-house internal meeting software. For its full fiscal year 2025, Zoom reported adjusted earnings per share of $3.21, up from $2.07 per share in fiscal year 2024, on revenue of $4.665 million, up 3.1% year-over-year. "FY25 was an incredible year, marked by major advancements in AI, the evolution of Zoom into an AI-first work platform spanning Phone, Team Chat, Events, Docs and more, and strong momentum in Contact Center and Workvivo," said Eric Yuan, founder and chief executive officer of Zoom, in prepared remarks to investors. "A key highlight has been the rapid adoption of our AI capabilities -- growth in monthly active users of Zoom AI Companion accelerated to 68% quarter over quarter, demonstrating the real value AI is providing customers." For its fiscal 2026 first quarter, Zoom expects adjusted earnings per share of $1.29 to $1.31 on revenue of $1.16 billion to $1.17 billion. Both were misses at the midpoint - be it not by much, as analysts were expecting $1.31 per share on revenue of $1.18 billion. For the full year, the company expects adjusted earnings per share of $5.34 to $5.37 on revenue of $4.79 billion to $4.8 billion. Analysts were expecting $5.45 per share on revenue of $4.66 billion.