Zoom Reports 3.6% Revenue Growth to $1.18 Billion in Q3 FY2025

Zoom Communications, Inc. reported its financial results for the third quarter of fiscal year 2025, ending October 31, 2024, revealing a revenue of $1,177.5 million, a 3.6% increase from $1,136.7 million in the same period last year. For the nine months ended October 31, 2024, total revenue reached $3,481.3 million, up 3.0% from $3,380.8 million in the prior year. The company achieved a net income of $207.1 million for the quarter, compared to $141.2 million in the previous year, and a net income of $642.4 million for the nine-month period, up from $338.6 million.

The company’s balance sheet as of October 31, 2024, showed total assets of $10.68 billion, an increase from $9.93 billion at the end of January 2024. Cash and cash equivalents decreased to $1.27 billion from $1.56 billion, while marketable securities rose to $6.43 billion from $5.40 billion. The total stockholders' equity increased to $8.68 billion, up from $8.02 billion at the beginning of the fiscal year. The company also reported a significant increase in operating cash flow, which reached $1.52 billion for the nine months ended October 31, 2024, compared to $1.25 billion in the same period last year.

In terms of strategic developments, Zoom completed the acquisition of Workvivo Limited in April 2023 for $221.8 million, enhancing its employee experience platform. The company has also focused on expanding its product offerings, including the launch of Zoom AI Companion, aimed at improving productivity and collaboration. As of October 31, 2024, Zoom reported approximately 192,400 Enterprise customers, a decrease from 219,700 a year earlier, attributed to a strategic transition of lower MRR customers to its Online business segment.

Operationally, Zoom's revenue from Enterprise customers grew by 5.8% year-over-year, while revenue from Online customers remained flat. The company reported a net dollar expansion rate of 98% for Enterprise customers, down from 105% in the previous year, indicating challenges in upselling existing customers amid macroeconomic pressures. The company continues to face competitive pressures and elongated sales cycles, particularly in the current economic environment characterized by high inflation and reduced corporate spending.

Looking ahead, Zoom anticipates continued growth in its subscription services, although it acknowledges potential challenges due to macroeconomic conditions and increased competition. The company remains committed to investing in its platform and expanding its international presence, while also navigating the complexities of regulatory compliance and evolving market demands.