Zoom Q4 FY2022 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 above 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 announced that its board of directors has approved a stock buyback program of up to $1.0 billion.
Zoom Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted Earnings Per Share Beat $1.29 $1.06
Revenue Beat $1,071.4M $1,053.4M
Customers Contributing Over $100K in Trailing-12-Month Revenue Beat  2,725 2,701

Source: Predictions based on analysts' consensus from Visible Alpha

Zoom (ZM) Financial Results: Analysis

Zoom Video Communications, Inc. (ZM) reported Q4 FY 2022 earnings on Feb. 28, 2022, that beat analysts' expectations. Adjusted earnings per share (EPS) came in above analyst forecasts, rising 5.7% year over year (YOY). Analysts had been expecting adjusted EPS to fall 12.6% YOY. Zoom's revenue also surpassed analyst estimates, up 21.4% YOY. But that was the slowest pace of revenue growth in at least 15 quarters. The number of customers contributing $100,000 in trailing-12-month (TTM) revenue exceeded consensus estimates.

The company's shares fell as much as 12% at one point in extended trading. Over the past year, Zoom's shares have provided a total return of -67.7%, well below the S&P 500's total return of 12.1%.

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

The number of Zoom's customers contributing over $100,000 in TTM revenue rose 65.8% YOY. It was the slowest pace of growth in at least 15 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 Stock Repurchase Program

Zoom announced that its board of directors has approved a share repurchase program of up to $1.0 billion of the company's outstanding class A common stock. The timing and amount of repurchases will be determined at the discretion of the company's management and will be based on an evaluation of market conditions and other factors. The stock buyback program is scheduled to expire in February 2024.

ZM Forward Guidance

Zoom provided forward guidance for Q1 FY 2023 and for the full-year FY 2023. For the first quarter, the company expects revenue to be approximately $1.1 billion and adjusted EPS to be between $0.86 and $0.88. For full-year FY 2023, Zoom expects revenue to be between approximately $4.5 billion and $4.6 billion, while adjusted EPS is forecast to be between $3.45 and $3.51.

ZM Earnings Call Recap

In a call with analysts after results were released, Chief Financial Officer (CFO) Kelly Steckelberg gave more detail on the company's guidance. She said that sales to larger companies, its enterprise business, are expected to increase 20% YOY. By contrast, she said that sales to Zoom's online business, self-service customers, are expected to be largely flat. 

Zoom's next earnings report (for Q1 FY 2023) is expected to be released on May 30, 2022.

Article Sources
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  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, 2021," Page 48.

  5. Wall Street Journal. "Zoom’s Sales Growth Slows as Retreat From Pandemic High Continues."

  6. Yahoo! Finance. "Earnings Calendar: ZM."

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