Zoom Q1 FY2023 Earnings Report Recap

ZM beat on earnings and on revenue

Key Takeaways

  • The number of Zoom customers contributing over $100,000 in trailing-12-month revenue came in below analysts' estimates.
  • Large-contract customers contributing more than $100,000 in annual revenue are usually a more stable source of revenue than smaller-contract customers.
  • Zoom expects Q2 FY 2023 adjusted EPS to be between $0.90 and $0.92.
Zoom Earnings Results
Metric  Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Beat $1.03 $0.87
Revenue Beat $1,073.8M $1,073.5M
Customers Contributing Over $100K in Trailing-12-Month Revenue Miss  2,916 2,996

Source: Predictions based on analysts' consensus from Visible Alpha

Zoom (ZM) Financial Results: Analysis

Zoom Video Communications, Inc. (ZM) reported Q1 FY 2023 earnings on May 23, 2022, that beat analysts' expectations. Adjusted earnings per share (EPS) came in above analyst forecasts, falling 22.0% year over year (YOY). Analysts had been expecting a decline of 33.9% YOY. Zoom's revenue narrowly beat analyst estimates, up 12.3% YOY. But that was the slowest pace of revenue growth in at least 17 quarters. The number of customers contributing over $100,000 in trailing-12-month (TTM) revenue missed consensus estimates.

The company's shares rose more than 19% at one point in extended trading. Over the past year, Zoom's shares have provided a total return of -72.2%, well below the S&P 500's total return of -7.1%.

ZM Customers Contributing Over $100K in Trailing-12-Month Revenue

The number of Zoom's customers contributing over $100,000 in TTM revenue rose 45.9% YOY. It was the slowest pace of growth in at least 17 quarters. The size of this customer group provides a measure of two key capabilities: Zoom's ability to scale its offerings to its users' needs and the company's ability to attract larger organizations to its platform.

Large customers are likely to be a more stable source of revenue compared to individuals or smaller organizations, who may switch more frequently to other video conferencing services. Securing contracts with large enterprises will be especially important as the global economy emerges from the pandemic and as many people begin returning to their company offices to work.

ZM Forward Guidance

Zoom provided forward guidance for Q2 FY 2023 and for the full-year FY 2023. For the second quarter, the company expects revenue to be approximately $1.1 billion and adjusted EPS to be between $0.90 and $0.92. For full-year FY 2023, Zoom expects revenue to be between approximately $4.5 billion and $4.6 billion, while adjusted EPS are forecast to be between $3.70 and $3.77.

Zoom's next earnings report (for Q2 FY 2023) is expected to be released on Aug. 30, 2022.

Article Sources
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  1. Zoom Video Communications Inc. "Zoom Video Communications Reports Financial Results for the First Quarter of Fiscal Year 2023."

  2. Visible Alpha. "Financial Data."

  3. TradingView. "Price Chart: ZM and S&P 500."

  4. Zoom Video Communications Inc. "Form 10-K for the Fiscal Year Ended January 31, 2022," Page 47.

  5. Investing.com. "Zoom Video Communications Inc. (ZM): Financials—Earnings."

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