Zoom reports 3.1% YoY revenue rise in fiscal year 2024

Zoom Video Communications has released its financial results for Q4 and the full fiscal year ending 31 January 2024. Total revenue for the quarter stood at USD $1,146.5 million, marking a 2.6% YoY increase, while fiscal year total revenue hit USD $4,527.2 million, representing a 3.1% YoY rise. In constant currencies, these rises equated to 2.7% and 3.8% respectively.

The Q4 enterprise revenue rose to USD $667.3 million, up 4.9% YoY, with the full fiscal year enterprise revenue reaching USD $2,619.3 million, up 8.7% YoY. Q4 operating cash flow hit USD $351.2 million, representing a significant 66% YoY increase, and the full fiscal year operating cash flow came in at USD $1,598.8 million, marking a 23.9% YoY increase. The cash flow margin for the full fiscal year came to 35.3%.

A notable development from the announcement was the authorisation for the repurchase of up to USD $1.5 billion of Zoom's Class A common stock. Eric S. Yuan, Founder and CEO of Zoom, said, "In FY24, we unveiled Zoom AI Companion, our generative AI digital assistant, aimed at boosting productivity, enhancing team effectiveness, and fostering skill development across the Zoom platform."

"We are committed to democratising AI accessibility, offering it to all our customers regardless of business size, included at no extra charge with a paid license," said Yuan. 

The company's team is dedicated to innovation throughout the platform, introducing hundreds of new features, including those for the Zoom Contact Center. This is aimed at redefining the gold standard for customer experience. While delivering considerable innovation for customers, Zoom also drove strong profitability and grew its free cash flow, with an increase of 24.1% YoY to USD $1,471.9 million for the full fiscal year. This represented a free cash flow margin of 32.5%.

Key drivers of total revenue included acquiring new customers and expanding existing relationships. As of the end of Q4 of the fiscal year 2024, Zoom had approximately 220,400 Enterprise customers, marking a 3.5% YoY increase. It also had a trailing 12-month net dollar expansion rate for Enterprise customers standing at 101%. The company had 3,810 customers contributing more than $100,000 in trailing 12 months' revenue, representing an approximate 9.8% rise from the same quarter last fiscal year.

Looking forward, Zoom has issued guidance for its first quarter of fiscal year 2025 and its full fiscal year 2025. For Q1 2025, it expects total revenue and revenue in constant currency to be approximately USD $1.125 billion. Non-GAAP income from operations is projected to be between USD $410 million and USD $415 million.

For the full fiscal year 2025, Zoom anticipates total revenue of approximately USD $4.600 billion, revenue in constant currency to be approximately USD $4.597 billion, and non-GAAP income from operations to be between USD $1.720 billion and USD $1.730 billion. For the full fiscal year, free cash flow is expected to be between USD $1.440 billion and USD $1.480 billion.

Zoom's Board of Directors has authorised a stock repurchase programme of up to USD $1.5 billion of Zoom's outstanding Class A common stock. The repurchase of Class A common stock can be conducted either on the open market, in privately negotiated transactions, and other transactions in per compliance with applicable securities laws.