Zoom Video Communications Reports Results for First Quarter

Zoom Video Communications ( ZM ) has raised its annual forecast for profit and revenue, citing robust demand for its product portfolio as companies continue to adopt hybrid work. The company's efforts to incorporate artificial intelligence (AI) and broaden its range of services have been successful, with the introduction of Zoom Workplace, an AI-powered, open collaboration platform in March, along with new AI companion expansions first unveiled in September last year, for paid users. Zoom, along with platforms like Microsoft's Teams and Cisco's CSCO.O, opens new tab Webex, are pandemic darlings, which most businesses and individuals turned to for connecting with employees and friends.

The company now expects 2025 revenue of about $4.61 billion to $4.62 billion, up from its earlier forecast of about $4.6 billion. Analysts expect revenue of $4.61 billion, according to LSEG data. On an adjusted basis, it expects full-year earnings between $4.99 and $5.02 per share, compared with its previous forecast of between $4.85 and $4.88. For the second quarter, Zoom sees revenue between $1.145 billion and $1.150 billion, slightly below analysts' average estimate of $1.15 billion.

The company posted revenue of $1.14 billion, up 3.2%, for the first quarter ended April 30 and above analysts' expectations of $1.13 billion. Zoom Video Communications ( ZM ) reported financial results for the first fiscal quarter of fiscal year 2025, with total revenue of $1,141.2 million, up 3.2% year over year as reported and 3.5% in constant currency. Enterprise revenue was $665.7 million, up 5.3% year over year, and Online revenue was $475.5 million, flat year over year.

Income from operations and operating margin was $203.0 million, compared to GAAP income from operations of $9.7 million in the first quarter of fiscal year 2024. Non-GAAP net income for the first quarter was $426.3 million, after adjusting for stock-based compensation expense and related payroll taxes, acquisition-related expenses, restructuring expenses, litigation settlements, net, and the tax effects on non-GAAP adjustments. Non-GAAP net income per share was $1.35. In the first quarter of fiscal year 2024, non-GAAP net income was $353.3 million, or $1.16 per share.

Cash and marketable securities were $7.4 billion, with net cash provided by operating activities being $588.2 million for the first quarter, compared to $418.5 million in the first quarter of fiscal year 2024, up 40.6% year over year. Free cash flow, which is net cash provided by operating activities less purchases of property and equipment, was $569.7 million, compared to $396.7 million in the first quarter of fiscal year 2024, up 43.6% year over year.

Customer metrics for total revenue included acquiring new customers, with 3,883 customers contributing more than $100,000 in trailing 12 months of revenue, up approximately 8.5% from the same quarter last fiscal year.

Technical Outlook
Zoom Video Communications stock ( ZM ) has been forming a Trough and Crest pattern or should and Neck pattern concurrently for the past 1 year now. The stock is down 1.69% in Premarket Trading approaching support level of $61 a move that will validate a bearish reversal.