On November 20, 2023, Zoom Video Communications Inc (ZM, Financial) released its 8-K filing, detailing the financial outcomes for the third quarter of the fiscal year 2024. The company witnessed a modest increase in total revenue, reporting $1,136.7 million, which represents a 3.2% rise from the previous year. When adjusted for foreign currency impact, the revenue growth in constant currency terms was slightly higher at 3.5%.
Financial Performance Overview
Zoom's enterprise segment was a key growth driver, with revenue from this sector increasing by 7.5% year over year to $660.6 million. However, the online revenue segment experienced a 2.4% decline. The GAAP operating margin improved significantly to 14.9%, and the non-GAAP operating margin stood at a robust 39.3%. Net income attributable to common stockholders for the quarter was $141.2 million, or $0.45 per share, a substantial increase from $48.4 million, or $0.16 per share in the same quarter of the previous fiscal year.
Cash Flow and Customer Metrics
Zoom's operating cash flow showed a remarkable year-over-year increase of 67.0%, reaching $493.2 million. Free cash flow followed suit, with a 66.2% increase to $453.2 million. The number of customers contributing more than $100,000 in trailing 12 months revenue grew by 13.5%, and the company had approximately 219,700 enterprise customers, marking a 5.0% increase from the previous year. The trailing 12-month net dollar expansion rate for enterprise customers was 105%.
Balance Sheet Highlights
As of October 31, 2023, Zoom's balance sheet reflected $6.5 billion in cash, cash equivalents, and marketable securities, excluding restricted cash. Total assets amounted to $9.3 billion, while total liabilities were $1.9 billion, resulting in total stockholders' equity of $7.4 billion.
Forward Guidance
For the fourth quarter of fiscal year 2024, Zoom expects total revenue to be between $1.125 billion and $1.130 billion, with non-GAAP income from operations projected to be between $409.0 million and $414.0 million. Non-GAAP diluted EPS is anticipated to be between $1.13 and $1.15. For the full fiscal year 2024, the company forecasts total revenue to be between $4.506 billion and $4.511 billion, with non-GAAP income from operations expected to be between $1.740 billion and $1.745 billion, and non-GAAP diluted EPS between $4.93 and $4.95.
Zoom's CEO, Eric S. Yuan, commented on the results, stating,
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."He also expressed confidence in the company's ability to increase its full-year outlook for revenue and non-GAAP profitability.
Zoom's financial tables provide a detailed reconciliation of GAAP to non-GAAP measures, underscoring the company's commitment to transparency and providing valuable insights for investors. The company's continued investment in innovation and customer expansion is evident in its financial results and strategic direction.
For more detailed information on Zoom Video Communications Inc (ZM, Financial)'s financial results, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Zoom Video Communications Inc for further details.
