Eric Yuan: "Our rapid innovation over the years has taken us far beyond video conferencing...We have very deliberately created a communication and collaboration powerhouse with AI infused natively across the platform."
— Eric Yuan
03Detailed Report
ZM
Zoom Video Communications Inc
Period
Q1 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 5, 2026
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Executive Summary
Zoom Video Communications Inc (ZM) reported a solid performance in Q1 2025, achieving a revenue of $1.141 billion, an increase of 3.25% year-over-year. The company's focus on expanding its AI-driven product offerings, particularly through its newly launched Zoom Workplace, has enabled it to enhance productivity and engagement among customers. Despite slight increases in churn rates attributed to stricter grace periods for payments, Zoom continues to bolster its enterprise segment, which accounts for 58% of total revenue. Management remains positive on future growth, raising guidance for the full fiscal year and emphasizing AI as a critical driver for customer engagement and satisfaction.
Key Performance Indicators
Revenue
Increasing
1.14B
QoQ: -0.46% | YoY: 3.25%
Gross Profit
Decreasing
806.90M
70.70% margin
QoQ: -7.27% | YoY: -4.10%
Operating Income
Increasing
276.20M
QoQ: 63.89% | YoY: 3 598.97%
Net Income
Increasing
216.31M
QoQ: -27.62% | YoY: 1 300.60%
EPS
Increasing
0.70
QoQ: -28.57% | YoY: 1 238.43%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: $1.141 billion, up 3.25% YoY, down 0.46% QoQ\nGross Profit: $806.9 million, gross profit margin at 70.70%\nOperating Income: $276.2 million, up 3,598.97% YoY\nNet Income: $216.3 million, up 1,300.60% YoY\nEPS: $0.70, compared to $0.052 in Q1 2024\nCash Flow: Operating cash flow grew 41% YoY to $588 million; free cash flow rose 44% YoY to $570 million.\nDeferred Revenue: $1.35 billion, down 1% YoY; RPO increased 5% to $3.67 billion.\nChurn Rate: Online average monthly churn increased to 3.2%, attributed to tighter grace period policies.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
1.14B
3.25%
-0.46%
Gross Profit
806.90M
-4.10%
-7.27%
Operating Income
276.20M
3 598.97%
63.89%
Net Income
216.31M
1 300.60%
-27.62%
EPS
0.70
1 238.43%
-28.57%
Key Financial Ratios
Gross Profit Margin
Excellent
70.70%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Good
24.20%
Operating margin is healthy and competitive within industry standards
Net Profit Margin
Good
19.00%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Weak
2.10%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
2.61%
Return on equity suggests inefficient capital allocation
Current Ratio
Strong
4.36
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
Conservative
0.01
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Fair Value
21.80x
P/E ratio in line with market averages
Price to Book
Fair Value
2.27x
Price-to-book ratio reasonable for profitable companies
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