Zoom Video stock dips on Q1 results, guidance

Zoom Video Communications (NASDAQ:ZM), Inc. reported a stronger-than-expected performance for the first quarter, surpassing analyst estimates for both earnings per share (EPS) and revenue.

The video conferencing giant announced an adjusted EPS of $1.35, which was $0.16 higher than the analyst consensus of $1.19. Revenue for the quarter was also ahead of expectations at $1.14 billion compared to the predicted $1.13 billion.

Despite the earnings beat, the company's stock fell by 0.5% as the guidance for the second quarter and full fiscal year 2025 showed a cautious outlook.

Zoom anticipates Q2 adjusted EPS to be between $1.20 and $1.21, slightly below the analyst consensus of $1.23. The expected Q2 revenue range of $1.145 to $1.15 billion is also at the lower end of the analyst estimate of $1.15 billion.

For the full fiscal year 2025, Zoom forecasts an adjusted EPS of $4.99 to $5.02, which is above the consensus of $4.91. The revenue guidance for FY2025 is set at $4.61 to $4.62 billion, aligning closely with the consensus of $4.61 billion.

Zoom's first-quarter revenue saw a 3.2% increase year over year (YoY), with a notable 5.3% YoY growth in Enterprise revenue, reaching $665.7 million.

The company's GAAP operating margin was 17.8%, and the adjusted operating margin stood at 40.0%. Zoom's operating cash flow surged 40.6% YoY to $588.2 million, reflecting robust financial health.

CEO Eric S. Yuan attributed the strong quarter to the integration of AI across Zoom's platform and the company's strategic investments.

"These innovations combined with our execution and focused investment enabled us to outperform our guidance and drive operating cash flow growth of 40.6% and free cash flow growth of 43.6% year over year," Yuan commented.

The company also reported customer growth, with 3,883 customers contributing more than $100,000 in trailing 12 months revenue, an increase of 8.5% from the same quarter last fiscal year.