Second quarter total revenue of $1,162.5 million, up 2.1% year over year as reported and 2.4% in constant currency
Second quarter Enterprise revenue of $682.8 million, up 3.5% year over year
Second quarter GAAP operating margin of 17.4% and non-GAAP operating margin of 39.2%
Second quarter operating cash flow of $449.3 million, up 33.7% year over year
Repurchased approximately 4.8 million shares of common stock in Q2
Zoom Video Communications, Inc. (NASDAQ: ZM), today announced financial results for the second fiscal quarter ended July 31, 2024.
“In Q2, we outperformed our guidance across the board and grew operating cash flow and free cash flow by 33.7% and 26.2% year over year, respectively, demonstrating our continued commitment to efficient growth. We also saw strength in large accounts, with customers contributing more than $100,000 in trailing 12 months revenue increasing by 7.1% year over year, and resilience in our Online business, with Online average monthly churn reaching its lowest ever rate,” said Eric S. Yuan, Zoom founder, and CEO. “Zoom Contact Center racked up several marquee customers, including its largest single order deal to-date, highlighting our ability to win competitive deals for full scale, customer-facing deployments with our higher-end packages that utilize advanced AI features to enhance agent performance.”
Second Quarter Fiscal Year 2025 Financial Highlights:
Revenue: Total revenue for the second quarter was $1,162.5 million, up 2.1% year over year. Adjusting for foreign currency impact, revenue in constant currency was $1,166.1 million, up 2.4% year over year. Enterprise revenue was $682.8 million, up 3.5% year over year, and Online revenue was $479.7 million, flat year over year.
Income from Operations and Operating Margin: GAAP income from operations for the second quarter was $202.4 million, compared to GAAP income from operations of $177.6 million in the second quarter of fiscal year 2024. 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 second quarter was $455.5 million, compared to non-GAAP income from operations of $461.7 million in the second quarter of fiscal year 2024. For the second quarter, GAAP operating margin was 17.4% and non-GAAP operating margin was 39.2%.
Net Income and Diluted Net Income Per Share: GAAP net income for the second quarter was $219.0 million, or $0.70 per share, compared to GAAP net income of $182.0 million, or $0.59 per share, in the second quarter of fiscal year 2024.
Non-GAAP net income for the second quarter was $436.4 million, after adjusting for stock-based compensation expense and related payroll taxes, gains on strategic investments, net, acquisition-related expenses, restructuring expenses, litigation settlements, net, and the tax effects on non-GAAP adjustments. Non-GAAP net income per share was $1.39. In the second quarter of fiscal year 2024, non-GAAP net income was $409.6 million, or $1.34 per share.
Cash and Marketable Securities: Total cash, cash equivalents, and marketable securities, excluding restricted cash, as of July 31, 2024 was $7.5 billion.
Cash Flow: Net cash provided by operating activities was $449.3 million for the second quarter, compared to $336.0 million in the second quarter of fiscal year 2024, up 33.7% year over year. Free cash flow, which is net cash provided by operating activities less purchases of property and equipment, was $365.1 million, compared to $289.4 million in the second quarter of fiscal year 2024, up 26.2% year over year.
Customer Metrics: Drivers of total revenue included acquiring new customers. At the end of the second quarter of fiscal year 2025, Zoom had:
3,933 customers contributing more than $100,000 in trailing 12 months revenue, up approximately 7.1% from the same quarter last fiscal year.
Approximately 191,600 Enterprise customers.
A trailing 12-month net dollar expansion rate for Enterprise customers of 98%.
Online average monthly churn of 2.9% for the second quarter, down 30 bps from the second quarter fiscal year 2024.
The percentage of total Online MRR from Online customers with a continual term of service of at least 16 months was 74.4%, up 160 bps year over year.
Financial Outlook: Zoom is providing the following guidance for its third quarter of fiscal year 2025 and its full fiscal year 2025.
Third Quarter Fiscal Year 2025: Total revenue is expected to be between $1.160 billion and $1.165 billion and revenue in constant currency is expected to be between $1.162 billion and $1.167 billion. Non-GAAP income from operations is expected to be between $438.0 million and $443.0 million. Non-GAAP diluted EPS is expected to be between $1.29 and $1.31 with approximately 314 million weighted average shares outstanding.
Full Fiscal Year 2025: Total revenue is expected to be between $4.630 billion and $4.640 billion and revenue in constant currency is expected to be between $4.641 billion and $4.651 billion. Full fiscal year non-GAAP income from operations is expected to be between $1.790 billion and $1.800 billion. Full fiscal year non-GAAP diluted EPS is expected to be between $5.29 and $5.32 with approximately 316 million weighted average shares outstanding. Full fiscal year free cash flow is expected to be between $1.580 billion and $1.620 billion.
The EPS and share count figures do not include the impact from $1.062 billion of authorized share repurchase remaining as of July 31, 2024.
