Zoom Video Communications (ZM) recently released its second-quarter fiscal 2025 earnings report, revealing strong performance driven by its growing enterprise customer base. The report showed adjusted earnings per share exceeding analyst expectations by 14.88%, reaching $1.39, and revenue growth of 2.09% year-over-year, reaching $1.16 billion. This positive performance can be attributed to the company’s focus on enterprise customers, with revenues from this segment increasing by 3.5% year-over-year to $682.8 million. The number of enterprise customers contributing over $100,000 in revenue also grew by 7% to 3,933, indicating a strong trend of large-scale adoption of Zoom’s services.
The company highlighted its ongoing efforts to improve customer experience and operational efficiency, transitioning 26,800 enterprise customers with low annualized revenue to its Online platform. Despite this shift, Zoom reported a trailing 12-month net dollar expansion rate of 98% for enterprise customers, demonstrating continued value and growth within this segment.
Beyond its core video conferencing platform, Zoom highlighted notable traction in its Workvivo and Zoom Contact Center offerings. Workvivo, a communication and collaboration platform, saw a doubling of customers with over $100,000 in annual recurring revenue (ARR) year-over-year. The company also saw significant growth in Zoom Contact Center, exceeding 1,100 customers, driven by the launch of higher pricing tiers and success in larger deals.
Zoom AI Companion, the company’s AI-powered assistant, has also experienced significant growth, with over 1.2 million customer accounts enabled. This expansion reflects the company’s commitment to incorporating AI into its product offerings.
Looking ahead, Zoom’s guidance for the third quarter of fiscal 2025 projects revenue between $1,162 million and $1,165 million, with non-GAAP earnings per share expected in the range of $1.29 to $1.31. For the full fiscal year 2025, the company expects revenue between $4.63 billion and $4.64 billion, and non-GAAP earnings per share between $5.29 and $5.32.
Following the earnings release, analyst estimates for Zoom have trended upward, indicating a positive outlook for the company’s future performance. While Zoom’s share price has experienced some recent negative trends, its strong fundamentals and growth trajectory suggest a potential breakout in the near future. With a Zacks Rank #3 (Hold), Zoom is poised for an in-line return in the coming months.
