Zoom Video Communications Inc (ZM)

[eastunder]

Zoom Video Communications Reports Financial Results for the Third Quarter of Fiscal Year 2024
November 20, 2023 16:05 ET
| Source: Zoom Video Communications, Inc.
https://www.globenewswire.com/news-release/2023/11/20/2783601/0/en/Zoom-Video-Communications-Reports-Financial-Results-for-the-Third-Quarter-of-Fiscal-Year-2024.html

Third quarter total revenue of $1,136.7 million, up 3.2% year over year as reported and 3.5% in constant currency
Third quarter Enterprise revenue of $660.6 million, up 7.5% year over year
Third quarter GAAP operating margin of 14.9% and non-GAAP operating margin of 39.3%
Third quarter operating cash flow of $493.2 million, up 67.0% year over year
Number of customers contributing more than $100,000 in trailing 12 months revenue up 13.5% year over year

SAN JOSE, Calif., Nov. 20, 2023 (GLOBE NEWSWIRE) -- Zoom Video Communications, Inc. (NASDAQ: ZM), today announced financial results for the third fiscal quarter ended October 31, 2023.

“In Q3, revenue came in ahead of guidance as we bolstered Zoom’s all-in-one intelligent collaboration platform with advanced new capabilities like Zoom AI Companion and continued to evolve our customer and employee engagement solutions. We are also pleased with our Online business where we drove higher retention and saw usage of our new AI capabilities, enhancing the value of our platform,” said Eric S. Yuan, Zoom founder, and CEO. “Our strong performance across a number of metrics has enabled us to increase our full year outlook for revenue and non-GAAP profitability, as well as for free cash flow, which we now expect to be in the range of $1.34 billion to $1.35 billion, up approximately 13% year over year.”

Third Quarter Fiscal Year 2024 Financial Highlights:

Revenue: Total revenue for the third quarter was $1,136.7 million, up 3.2% year over year. Adjusting for foreign currency impact, revenue in constant currency was $1,140.7 million, up 3.5% year over year. Enterprise revenue was $660.6 million, up 7.5% year over year, and Online revenue was $476.1 million, down 2.4% year over year.

Income from Operations and Operating Margin: GAAP income from operations for the third quarter was $169.4 million, compared to GAAP income from operations of $66.5 million in the third quarter of fiscal year 2023. After adjusting for stock-based compensation expense and related payroll taxes, acquisition-related expenses, restructuring expenses, and litigation settlements, net, non-GAAP income from operations for the third quarter was $447.1 million, compared to non-GAAP income from operations of $380.9 million in the third quarter of fiscal year 2023. For the third quarter, GAAP operating margin was 14.9% and non-GAAP operating margin was 39.3%.

Net Income and Diluted Net Income Per Share: GAAP net income attributable to common stockholders for the third quarter was $141.2 million, or $0.45 per share, compared to GAAP net income attributable to common stockholders of $48.4 million, or $0.16 per share in the third quarter of fiscal year 2023.

Non-GAAP net income for the third quarter was $401.2 million, after adjusting for stock-based compensation expense and related payroll taxes, losses (gains) on strategic investments, net, acquisition-related expenses, restructuring expenses, litigation settlements, net, undistributed earnings attributable to participating securities, and the tax effects on non-GAAP adjustments. Non-GAAP net income per share was $1.29. In the third quarter of fiscal year 2023, non-GAAP net income was $323.2 million, or $1.07 per share.

Cash and Marketable Securities: Total cash, cash equivalents, and marketable securities, excluding restricted cash, as of October 31, 2023 was $6.5 billion.
Cash Flow: Net cash provided by operating activities was $493.2 million for the third quarter, compared to $295.3 million in the third quarter of fiscal year 2023, up 67.0% year over year. Free cash flow, which is net cash provided by operating activities less purchases of property and equipment, was $453.2 million, compared to $272.6 million in the third quarter of fiscal year 2023, up 66.2% year over year.

Customer Metrics: Drivers of total revenue included acquiring new customers and expanding across existing customers. At the end of the third quarter of fiscal year 2024, Zoom had:

Approximately 219,700 Enterprise customers, up 5.0% from the same quarter last fiscal year.
A trailing 12-month net dollar expansion rate for Enterprise customers of 105%.
3,731 customers contributing more than $100,000 in trailing 12 months revenue, up approximately 13.5% from the same quarter last fiscal year.
Online average monthly churn of 3.0% for the third quarter, down 10 bps from the same quarter last fiscal year.
The percentage of total Online MRR from Online customers with a continual term of service of at least 16 months was 73.2%, up 250 bps year over year.
Financial Outlook: Zoom is providing the following guidance for its fourth quarter of fiscal year 2024 and its full fiscal year 2024.

Fourth Quarter Fiscal Year 2024:

Total revenue is expected to be between $1.125 billion and $1.130 billion and revenue in constant currency is expected to be between $1.129 billion and $1.134 billion. Non-GAAP income from operations is expected to be between $409.0 million and $414.0 million. Non-GAAP diluted EPS is expected to be between $1.13 and $1.15 with approximately 312 million weighted average shares outstanding.

Full Fiscal Year 2024:

Total revenue is expected to be between $4.506 billion and $4.511 billion and revenue in constant currency is expected to be between $4.542 billion and $4.547 billion. Full fiscal year non-GAAP income from operations is expected to be between $1.740 billion and $1.745 billion. Full fiscal year non-GAAP diluted EPS is expected to be between $4.93 and $4.95 with approximately 308 million weighted average shares outstanding.