Zoom Video's fiscal 2025 revenues beat expectations, strong growth in user base and customer retention

From Nasdaq: 2024-12-30 10:43:00

Zoom Communications (ZM) surpasses expectations with third-quarter fiscal 2025 revenues reaching $1.178 billion, growing 3.6% year over year. AI Companion 2.0 launch showcases innovation, with 59% quarter-over-quarter growth in Monthly Active Users and over 4 million enabled accounts. Shares surge 41.6% in 6 months, outperforming the sector.

Enterprise momentum thrives, with 6% revenue growth and 59% of total revenues from the upmarket segment. Strong customer retention seen with 2.7% monthly churn rate. Contact Center segment achieves milestones with over 20,000 seats deployment and 82% year-over-year customer growth.

Zoom’s financial strength shines with $7.7 billion in cash, 38.9% non-GAAP operating margin, and a $2 billion share repurchase program. Competition from tech giants countered by Zoom’s customer-centric approach, offering core AI features for free while monetizing enterprise capabilities.

2025 growth catalysts include Custom AI Companion add-ons for Healthcare and Education, Zoom Workplace for Frontline, and partnerships with major players like ServiceNow. Fiscal 2025 revenue guidance raised to $4.656-$4.661 billion, with an operating margin of 39%. Zacks consensus estimates suggest year-over-year growth in revenue and earnings.

Investors eyeing Zoom stock should consider its strong financials, expanding product portfolio, and leadership in AI innovation. Despite elevated valuation metrics, strategic initiatives, growth metrics, and profitability support potential appreciation in 2025. Zacks Rank #1 (Strong Buy) underscores confidence in Zoom’s future prospects.



Read more at Nasdaq: Zoom Video Poised for Growth in 2025: Time to Buy the Stock?