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Zoom Revenue for Q1 Hits $1.1B, up 3% YoY, Beating Estimates

The News: Zoom revenue rose to $1.1 billion in the first quarter of fiscal year 2024, up three percent from the $1.07 billion reported one year ago by the video conferencing, cloud contact center, and collaboration software vendor. Zoom reported its Q1 earnings on May 22 for the quarter ending April 30, 2023. Read the full Q1 earnings Press Release on the Zoom Video Communications, Inc. investor web page.

Zoom Revenue for Q1 Hits $1.1B, up 3% YoY, Beating Estimates

Analyst Take: Zoom’s revenue for Q1 FY24 hit $1.1 billion, boosted by a 13 percent rise in enterprise revenue to $632 million compared to one year ago as the company also raised its financial outlook for fiscal year 2024.

Zoom revenue continues to be lower compared to its heady days during the beginning of the pandemic in early 2020 when mandatory work-from-home orders went into effect around the U.S. and the world and Zoom’s enterprise user base and revenue soared. But while that growth has eased, the company is still seeing increasing revenue and sales growth, which shows its resilience.

Here are the Zoom Q1 results by the numbers:

  • Q1 2024 revenue of $1.1 billion, up three percent from $1.07 billion one year ago. The $1.1 billion in revenue beat consensus estimates of $1.08 billion from analysts at Investing.com.
  • Q1 2024 non-GAAP net income of $353 million, up 12 percent from $315.8 million one year ago.
  • Q1 2024 non-GAAP earnings per diluted share of $1.16, up from $1.03 per diluted share one year ago. The share price beat the $0.98 per share price expected by analysts at Investing.com.
  • Q1 2024 non-GAAP income from operations of $422.3 million, up six percent from $399.6 million one year ago.
  • Q1 2024 non-GAAP operating margin of 38.2 percent, up from 37.2 percent one year ago.

It was an impressive quarter for Zoom CEO and founder Eric S. Yuan and his executive team as they shepherded the company to another healthy earnings performance. Zoom beat on EPS and revenue, while also raising its guidance for the rest of the year, which both mark wins for the company.

Zoom Revenue Details

Zoom also saw other positive business indicators in its Q1 2024 earning numbers, including 3,580 customers that are spending more than $100,000 in trailing 12 months revenue, which marks an increase of 23 percent from one year ago; a 112 percent trailing 12-month net dollar expansion rate for enterprise customers; and a customer base that rose to 215,900 enterprise customers, up nine percent from one year ago.

Zoom’s non-GAAP free cash flow for Q1 was $396.7 million, down 21 percent from $501 million one year ago.

Zoom Revenue Guidance for FY2024

Zoom’s revenue and earnings announcement for Q1 also included earnings guidance for Q2 of FY2024 and for the full FY2024.

For Q2 of FY2024, Zoom said it expects total revenue between $1.11 billion and $1.115 billion, and non-GAAP income from operations between $405 million and $410 million. Non-GAAP diluted EPS is expected to be between $1.04 and $1.06, according to the company.

For the full FY2024, total revenue is expected to be between $4.465 billion and $4.485 billion, while full fiscal year non-GAAP income from operations is expected to be between $1.63 billion and $1.65 billion. For the full fiscal year 2024, non-GAAP diluted EPS is expected to be between $4.25 and $4.31 per share.

Zoom Revenue Overview

There is a lot to like in Zoom’s Q1 earnings, including the fact that Zoom Phone now makes up about 10 percent of the company’s quarterly revenue, and that the company’s online attrition has fallen to about 3.1 percent, which is at pre-Covid levels, according to Zoom.

At The Futurum Group, we are optimistic about Zoom, as we see the company continue to innovate and grow its product lines and services for enterprises—all part of its important platform play. Last fall Zoom introduced Zoom Mail and Zoom Calendar in a pivot to diversify its products from being only a video conferencing vendor to offering a full-service platform that can integrate more services and grow the company’s sales and revenue.

This move helps Zoom embrace the ever-changing idea of hybrid workplaces that promote deeper collaboration, improved human connections, and more flexible work environments for customers and their employees, which is a smart pivot for Zoom.

Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.

Other insights from The Futurum Group:

Zoom Takes Another Big Step Forward in AI-based Value with Integration and Investment in Anthropic

Zoom Huddles: A Modern Communication Experience for the Hybrid Workplace

Zoom Acquires Workvivo in a Move to Bolster Employee Experience

Author Information

Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.

From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.

A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.

An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.

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