Zoom Communications, Inc. · NASDAQ:ZM
Zoom Communications — Q1 2024 Earnings Presentation
24 slides from Zoom Communications's earnings presentation, May 22, 2023
Slide 1: Zoom Video Communications Q1 FY24 Earnings
Zoom Video Communications Q1 FY24 Earnings May 22, 2023 © 2023 Zoom Video Communications, Inc.
Slide 2: Use of non-GAAP financial measures
Use of In addition to the financials presented in accordance with U.S. generally accepted accounting principles ("GAAP"), this presentation includes the following non-GAAP metrics: Revenue in Constant Currency, non-GAAP gross profit, non-GAAP gross margin, non-GAAP R&D expense, non-GAAP S&M non-GAAP
Slide 3: Safe Harbor Statement
Safe Harbor This presentation and the accompanying oral presentation contain express and implied “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding Zoom's financial outlook for the second quarter and full fiscal yea
Slide 4: Zoom acquires Workvivo to enhance the employee experience offering
Zoom acquires Workvivo to enhance the employee experience offering Broadens our platform with Workvivo’s modern, feature-rich employee experience solution Extends our all-in-one collaboration capabilities into the heart of companies’ digital ecosystems and across hybrid, distributed workforces Deliv
Slide 5: Expansion of Zoom IQ and partnership with Anthropic are core to our AI strategy
Expansion of ZoomIQ and partnership with Anthropic are core to our AI strategy Zoom IQ1 Enhanced Productivity Improved Connections High-Quality CX Increase focus by simplifying communications and Agent insights and assist to improve performance and Have better alignment and outcomes for better human
Slide 6: Customer wins highlight the power of the platform
Customer wins highlight the power of the platform © 2023 Zoom Video Communications, Inc.
Slide 7: Q1 Milestones
Q1 Milestones Non-GAAP Zoom Phone Online business GM1 of 80.5% reaches stabilizing exceeds LT 10% of target revenue For endnote descriptions, see last slide © 2023 Zoom Video Communications, Inc. 7
Slide 8: Continued top-line growth with positive trends in Enterprise and Online
Continued top-line growth with positive trends in Enterprise and Online Total Revenue1 Enterprise Revenue Online Average (in millions) (in millions) Monthly Churn2 Currency 13% 5% Impact 3% 3.6% 3.1% For endnote descriptions, see final slide © 2023 Zoom Video Communications, Inc. 8
Slide 9: Growth in new and existing Enterprise customers
Growth in new and existing Enterprise customers # of Enterprise Customers1 # of Customers Contributing >$100k in TTM Revenue 9% 112% 23% TTM Net Dollar Expansion Rate for Enterprise Customers2 in Q1 FY24 For endnote descriptions, see final slide © 2023 Zoom Video Communications, Inc. 9
Slide 10: Growth in Americas, macro headwinds in ROW
Growth in Americas, macro headwinds in ROW Revenue1 YoY Growth Revenue Share by Region1 (in millions) APAC -5% EMEA -8% Americas 8% For endnote descriptions, see final slide © 2023 Zoom Video Communications, Inc. 10
Slide 11: Q1 FY24 expenses and margins
Q1 FY24 expenses and margins GAAP Non-GAAP1 Yr/Yr Yr/Yr Results Results Revenue $1,105 million 3% $1,105 million 3% Gross Profit 76.1% +50 bps 80.5% +190 bps As a % of Revenue R&D Expense 18.9% +549 bps 9.6% +171 bps S&M Expense 38.2% +444 bps 25.2% +28 bps G&A Expense 18.1% +711 bps 7.6% (108 bps)
Slide 12: Growing future revenue under contract
Growing future revenue under contract Total RPO1 YoY Growth Current2 & Non-Current RPO YoY Growth (in millions) (in millions) Total RPO Total RPO 16% 16% 41% Unbilled Non-Current 28% 37% 29% 59% 63% Deferred Revenue Current RPO 3% 9% For endnote descriptions, see final slide © 2023 Zoom Video Communi
Slide 13: Strong cash flow and position in Q1
Strong cash flow and position in Q1 Cash Balance1 (in billions) Operating Cash Flow $418M OCF Margin 37.9% Free Cash Flow 2 $397M FCF Margin 35.9% For endnote descriptions, see final slide © 2023 Zoom Video Communications, Inc. 13
Slide 14: Q2 and Fiscal Year 2024 outlook
Q2 and Fiscal Year 2024 outlook Q2 FY24 FY24 Revenue $1,110 - $1,115 million $4,465 - $4,485 million Total Revenue $1,120 - $1,125 million $4,495 - $4,515 million (Constant Currency) Non-GAAP Operating Outlook1 $405 - $410 million $1,630 - $1,650 million Income Weighted Average Share 307 million 308
Slide 15: Annual ESG Report Published!
Annual ESG Report Published! Proud to announce our 2nd Annual ESG Report! © 2023 Zoom Video Communications, Inc. 15
Slide 16: One platform delivering limitless human connection
One platform delivering limitless human connection Strategic Focuses 1. Drive impact with Zoom IQ & Federated Approach to AI 2. Empower modern Collaboration 3. Expand solutions to new departments and industries © 2023 Zoom Video Communications, Inc. 16
Slide 17: © 2023 Zoom Video Communications, Inc.
© 2023 Zoom Video Communications, Inc. 17
Slide 18: Thank you
Thank you © 2023 Zoom Video Communications, Inc. 18
Slide 19: Appendix
Appendix © 2023 Zoom Video Communications, Inc. 19
Slide 20: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation ($ in Thousands) Q1 FY23 Q1 FY24 Gross Profit Total Revenue $1,073,800 $1,105,364 GAAP Gross Profit $811,979 $841,417 (+) Stock-based compensation expense and related payroll taxes $31,598 $40,120 (+) Acquisition-related expense $791 $1,557 (+) Restructuring expenses
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation ($ in Thousands except EPS) Q1 FY23 Q1 FY24 Operating Profit Total Revenue $1,073,800 $1,105,364 GAAP Operating Profit $187,065 $9,742 (+) Stock-based compensation expense and related payroll taxes $212,862 $278,048 (+) Litigation settlements, net $(4,226) $52,500 (+)
Slide 22: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation ($ in Thousands) Q1 FY23 Q1 FY24 Free Cash Flow Cash Flow from Operations $526,151 $418,487 (-) Purchases of PPE $(25,038) $(21,826) Free Cash Flow $501,113 $396,661 Operating Cash Flow Margin 49.0% 37.9% Free Cash Flow Margin 46.7% 35.9% Net Cash Used in Investing Ac
Slide 23: Historic Metrics
Historic Metrics ($ in millions) Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Revenue $1,021.5 $1,050.8 $1,071.4 $1,073.8 $1,099.5 $1,101.9 $1,117.8 $1,105.4 Y/Y growth 54% 35% 21% 12% 8% 5% 4% 3% GAAP Operating Income $294.6 $290.9 $251.8 $187.1 $121.7 $66.5 $(129.9) $9.7 Stock-b
Slide 24: Endnotes
Endnotes Expansion of ZoomIQ and partnership with Anthropic are core to our AI Growth in Americas, macro headwinds in ROW strategy 1. Subtotals revenue have been rounded. 1. Not all features listed here are currently generally available. Q1 FY24 expenses and margins Q1 Milestones 1. See appendix for