Zoom posts first billion dollar revenue in a single quarter
For the first time, Zoom Video Communications posted over $1 billion revenue in a single quarter.
The video communications company yesterday announced financial results for the second fiscal quarter ended 31 July.
Zoom has seen phenomenal growth since the outbreak of the COVID-19 pandemic, which resulted in more and more people working or learning remotely.
The company competes against Microsoft Teams, Cisco Webex and Google Meet, among others.
In a move aimed at competing with Zoom and others, Apple recently updated its FaceTime video-calling service for iOS 15, to make the app compatible with Android and PC Windows devices.
“In Q2, we achieved our first billion dollar revenue quarter while delivering strong profitability and cash flow,” says Zoom founder and CEO Eric S Yuan.
“Q2 also marked several milestones on our expansion beyond the UC [unified communications] platform. We launched Zoom Apps, bringing over 50 apps directly into the Zoom experience, and Zoom Events, an all-in-one digital events service.”
Zoom’s total revenue for the second quarter was $1.021 billion, up 54% year-over-year.
The company’s blow-out second quarter comes after it entered into a definitive agreement to acquire Five9, a provider of intelligent cloud contact centre solutions, in an all-stock transaction valued at approximately $14.7 billion.
It said the Five9 acquisition is expected to help enhance Zoom’s presence with enterprise customers and allow it to accelerate its long-term growth opportunity by adding the $24 billion contact centre market.
Generally accepted accounting principles (GAAP) income from operations for the second quarter was $294.6 million, up from $188.1 million in the second quarter of fiscal year 2021.
Zoom says after adjusting for stock-based compensation expense and related payroll taxes, acquisition-related expenses, and expenses related to charitable donation of common stock, non-GAAP income from operations for the second quarter was $424.7 million, up from $277 million in the second quarter of fiscal year 2021.
For the second quarter, GAAP operating margin was 28.8% and non-GAAP operating margin was 41.6%.
GAAP net income attributable to common stockholders for the second quarter was $316.9 million, or $1.04 per share, up from $185.7 million, or $0.63 per share in the second quarter of fiscal year 2021.
Non-GAAP net income was $415.1 million, after adjusting for stock-based compensation expense and related payroll taxes, acquisition-related expenses, gains on strategic investments, undistributed earnings attributable to participating securities, and expenses related to charitable donation of common stock.
According to Zoom, non-GAAP net income per share was $1.36. In the second quarter of fiscal year 2021, non-GAAP net income was $274.8 million, or $0.92 per share.
The company’s total cash, cash equivalents and marketable securities, excluding restricted cash, as of 31 July, was $5.1 billion.
Net cash provided by operating activities was $468 million for the second quarter, compared to $401.3 million in the second quarter of fiscal year 2021. Free cash flow, which is net cash provided by operating activities less purchases of property and equipment, was $455 million, compared to $373.4 million in the second quarter of the previous year.
Zoom explains that the drivers of total revenue included acquiring new customers and expanding across existing customers.
At the end of the second quarter of fiscal year 2022, Zoom had 2 278 customers contributing more than $100 000 in trailing 12-month revenue, up approximately 131% from the same quarter in the last fiscal year.
The company had approximately 504 900 customers with more than 10 employees, up approximately 36% from the same quarter last fiscal year.
Zoom says for the third quarter fiscal year 2022, total revenue is expected to be between $1.015 billion and $1.020 billion, and non-GAAP income from operations is expected to be between $340 million and $345 million.