Zoom has reported a significant revenue beat in its second-quarter earnings, exceeding expectations and raising its revenue outlook for the current fiscal year.
The company unveiled these impressive results during its latest earnings report, released after the closing bell on Monday.
Zoom’s Q2 revenue reached $1.14 billion, slightly surpassing analysts’ estimates of $1.11 billion. Additionally, the company adjusted its revenue guidance for the fiscal year 2024, which is the current fiscal year, projecting it to be in the range of $4.49 billion to $4.5 billion. This updated forecast represents an increase from the previous range of $4.47 billion to $4.49 billion and exceeded analyst estimates of $4.48 billion.
Robust performance
The market responded positively to Zoom’s robust performance, with the company’s stock surging over 5% in after-hours trading. Prior to this earnings announcement, Zoom’s shares had experienced relatively flat year-to-date performance.
Zoom entered this earnings cycle with a strategic focus on leveraging artificial intelligence (AI) trends. The company aimed to harness AI-driven advantages after the initial surge in demand during the pandemic subsided.
Q2 results
Here’s a summary of Zoom’s Q2 results in comparison to estimates:
– **Revenue**: Actual – $1.14 billion vs. Estimated – $1.11 billion
– **Adjusted EPS**: Actual – $1.34 vs. Estimated – $1.05
– **Free Cash Flow**: Actual – $289.4 million vs. Estimated – $258.6 million
– **Number of Enterprise Customers**: Actual – 218,000 vs. Estimated – 219,350
– **Q3 Revenue Forecast**: Actual – $1.12 billion vs. Estimated – $1.12 billion
Zoom had high expectations for AI to bolster its performance this year, especially in terms of profit margins. CEO Eric Yuan expressed this sentiment in his prepared remarks, stating, “For the full year, we expect non-GAAP gross margin to be approximately 79.7%, as we make additional investments in new AI technologies.”
To enhance its AI capabilities, the company welcomed XD Huang as its new Chief Technology Officer, who brought valuable AI experience from his previous role at Microsoft as the head of Azure AI.
Yuan emphasized the importance of trust in technology development, particularly regarding AI, by assuring customers that Zoom does not use their content for training its AI models or third-party AI models.
