Zoom Video Communications Reports Financial Results for the First Quarter of Fiscal Year 2024

Zoom Video Communications, Inc. (NASDAQ: ZM), today announced financial results for the first fiscal quarter ended April 30, 2023.
"The Zoom platform is designed to support limitless human connection to empower the modern workday and strengthen customer relationships. Our customers see Zoom as mission-critical in how they collaborate internally and externally across the globe,” said Eric S. Yuan, Zoom Founder and CEO. “This relationship with our 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. 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.”
First Quarter Fiscal Year 2024 Financial Highlights:
Revenue: Total revenue for the first quarter was $1,105.4 million, up 3% year over year. After adjusting for foreign currency impact, revenue in constant currency was $1,123.8 million, up 5% year over year. Enterprise revenue was $632.0 million, up 13% year over year, and Online revenue was $473.4 million, down 8% year over year.
Income from Operations and Operating Margin: GAAP income from operations for the first quarter was $9.7 million, compared to GAAP income from operations of $187.1 million in the first quarter of fiscal year 2023. After adjusting for stock-based compensation expense and related payroll taxes, acquisition-related expenses, restructuring expenses, and ligation settlements, net, non-GAAP income from operations for the first quarter was $422.3 million, compared to non-GAAP income from operations of $399.6 million in the first quarter of fiscal year 2023. For the first quarter, GAAP operating margin was 0.9% and non-GAAP operating margin was 38.2%.
Net Income and Diluted Net Income Per Share: GAAP net income attributable to common stockholders for the first quarter was $15.4 million, or $0.05 per share, compared to GAAP net income attributable to common stockholders of $113.6 million, or $0.37 per share in the first quarter of fiscal year 2023.

Non-GAAP net income for the first quarter was $353.3 million, after adjusting for stock-based compensation expense and related payroll taxes, losses (gains) on strategic investments, net, acquisition-related expenses, restructuring expenses, litigation settlements, net, undistributed earnings attributable to participating securities, and the tax effects on non-GAAP adjustments. Non-GAAP net income per share was $1.16. In the first quarter of fiscal year 2023, non-GAAP net income was $315.8 million, or $1.03 per share.
Cash and Marketable Securities: Total cash, cash equivalents, and marketable securities, excluding restricted cash, as of April 30, 2023 was $5.6 billion.
Cash Flow: Net cash provided by operating activities was $418.5 million for the first quarter, compared to $526.2 million in the first quarter of fiscal year 2023. Free cash flow, which is net cash provided by operating activities less purchases of property and equipment, was $396.7 million, compared to $501.1 million in the first quarter of fiscal year 2023.
Customer Metrics: Drivers of total revenue included acquiring new customers and expanding across existing customers. At the end of the first quarter of fiscal year 2024, Zoom had:
Approximately 215,900 Enterprise customers, up 9% from the same quarter last fiscal year.
A trailing 12-month net dollar expansion rate for Enterprise customers of 112%.
3,580 customers contributing more than $100,000 in trailing 12 months revenue, up approximately 23% from the same quarter last fiscal year.
Online average monthly churn of 3.1% for Q1, down 50 bps from the same quarter last fiscal year.
The percentage of total Online MRR from Online customers with a continual term of service of at least 16 months was 72.0%, up 700 bps year over year.
Financial Outlook: Zoom is providing the following guidance for its second quarter of fiscal year 2024 and its full fiscal year 2024.
Second Quarter Fiscal Year 2024: Total revenue is expected to be between $1.110 billion and $1.115 billion and revenue in constant currency is expected to be between $1.120 billion and $1.125 billion. Non-GAAP income from operations is expected to be between $405.0 million and $410.0 million. Non-GAAP diluted EPS is expected to be between $1.04 and $1.06 with approximately 307 million weighted average shares outstanding.
Full Fiscal Year 2024: Total revenue is expected to be between $4.465 billion and $4.485 billion and revenue in constant currency is expected to be between $4.495 billion and $4.515 billion. Full fiscal year non-GAAP income from operations is expected to be between $1.630 billion and $1.650 billion. Full fiscal year non-GAAP diluted EPS is expected to be between $4.25 and $4.31 with approximately 308 million weighted average shares outstanding.
Additional information on Zoom's reported results, including a reconciliation of the non-GAAP results to their most comparable GAAP measures, is included in the financial tables below. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future, although it is important to note that these factors could be material to Zoom's results computed in accordance with GAAP.
A supplemental financial presentation and other information can be accessed through Zoom’s investor relations website at investors.zoom.us.
Zoom Video Earnings Call
Zoom will hosted Zoom Video Webinar for investors on May 22, 2023 at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss the company’s financial results, business highlights and financial outlook. Investors were invited to join the Zoom Video Webinar by visiting: https://investors.zoom.us/