Zoom Beats Q1 Earnings Estimates but Issues Cautious Guidance

Zoom Video Communications (NASDAQ:ZM) exceeded expectations in its first-quarter performance, reporting adjusted EPS of $1.35 and revenue of $1.14 billion, surpassing analyst estimates. However, the stock saw a 0.5% decline as the company issued cautious guidance for the second quarter and fiscal year 2025.

For Q2, Zoom anticipates adjusted EPS between $1.20 and $1.21, slightly below the analyst consensus, with expected revenue in the range of $1.145 to $1.15 billion, at the lower end of estimates.

In fiscal year 2025, Zoom forecasts adjusted EPS of $4.99 to $5.02, above consensus, with revenue guidance of $4.61 to $4.62 billion, closely aligning with expectations.

While Q1 revenue increased by 3.2% year over year, with notable growth in Enterprise revenue reaching $665.7 million, Zoom's cautious outlook impacted investor sentiment despite robust financial health. The company reported a GAAP operating margin of 17.8% and adjusted operating margin of 40.0%, with operating cash flow surging 40.6% YoY to $588.2 million.

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