Zoom stock rises as Enterprise business drives revenue beat
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Zoom Video Communications (NASDAQ:ZM) gained after hours Monday following first-quarter earnings where it fairly easily beat expectations and guided to the high side of forecasts for the full year.
Revenues rose 3% overall to $1.105B; adjusting for foreign exchange impact, revenues rose 5% in constant currency.
Enterprise revenue was the strength, rising 13% to $632M, making up for Online revenue that fell 8% to $473.4M.
In customer metrics, Enterprise customers rose 9% year-over-year to 215,900, with a trailing 12-month net dollar expansion rate of 112%. Some 3,580 customers contributed more than $100,000 in trailing-12-months revenue, up 23% year-over-year. And Online average monthly chur was down 50 basis points to 3.1% for Q1.
A solid relationship with customers "helped us to exceed our guidance due to Enterprise growth and stabilizing Online revenue while driving greater efficiencies in our business to deliver strong profitability and free cash flow margin," said founder and CEO Eric Yuan.
"The solid start to the year has enabled us to raise our outlook for fiscal year 2024 while continuing to invest in innovations such as AI to help make interactions more meaningful and communications more effective," he added.
Net cash from operations was $418.5M, down from a prior-year $526.2M. Free cash flow dipped to $396.7M from a year-ago $501.1M. Liquidity came to $5.6B as of April 30.
For Q2, it's guiding to $1.11B-$1.115B (vs. $1.11B consensus) and non-GAAP earnings per share of $1.04-$1.06, vs. $1.06 expected.
For the full year, it sees revenue of $4.465B-$4.485B (above expectations for $4.46B) and EPS of $4.25-$4.31, above Street forecasts for $4.22.
Conference call to come at 5 p.m. ET.