Zoom Communications Q1 Earnings Beat Expectations with 2.9% Revenue Growth

$ZM

Zoom Communications (NASDAQ:ZM), renowned for its video conferencing solutions, not only surpassed the anticipated earnings per share (EPS) but also provided an optimistic revenue forecast for the upcoming fiscal year. In the first quarter, it achieved a total revenue of $1,174.7 million, marking a 2.9% increase year-over-year. This growth was slightly above the forecast, with revenue in constant currency terms rising by 3.4% to $1,179.5 million.

The enterprise segment of the business was particularly strong, with revenue up 5.9% year-over-year to $704.7 million. However, the online revenue experienced a slight decline of 1.2%. The GAAP operating margin stood at 20.6%, while the non-GAAP operating margin reached 39.8%. This indicates operational efficiency and the effectiveness of Zoom’s cost management strategies.

The GAAP net income for the quarter was reported at $254.6 million, or $0.81 per share, an increase from the previous year’s $216.3 million, or $0.69 per share. The non-GAAP net income was even higher at $448.3 million, or $1.43 per share. Zoom’s cash flow remained strong, with net cash provided by operating activities amounting to $489.3 million. The company also reported a healthy cash reserve, with total cash, cash equivalents and marketable securities excluding restricted cash standing at $7.8 billion as of April 30, 2025.

Zoom provided guidance for the second quarter of fiscal year 2026, expecting total revenue to be between $1.195 billion and $1.200 billion. The non-GAAP income from operations is projected to be between $460.0 million and $465.0 million and the non-GAAP diluted EPS is anticipated to range from $1.36 to $1.37.

For the full fiscal year 2026, the company expects total revenue to be between $4.800 billion and $4.810 billion, with non-GAAP diluted EPS between $5.56 and $5.59. Zoom’s performance this quarter reflects its continued innovation and ability to adapt to the dynamic market environment. The company’s financial position and positive outlook underscore its potential to maintain a leading role in the evolving landscape of digital communication and collaboration solutions.

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