Summary
Zoom closed fiscal 2024 with fourth quarter revenue of $1.15 billion, up 2.6% from the prior-year quarter, and full fiscal year revenue of $4.53 billion, up 3.1%. On a constant currency basis, which is a non-GAAP measure, growth was modestly faster in both periods. Growth has settled into the low single digits. Enterprise accounts are doing the heavy lifting while the Online, self-serve side keeps shrinking.
Profitability moved sharply the other way. Fourth quarter GAAP income from operations was $168.5 million, a swing from a loss of $129.9 million in the prior-year quarter, and the quarter's operating margin was 14.7% against negative 11.6%. That negative prior-year operating margin is the clearest sign of how much the cost base changed. Full year income from operations was $525.3 million, up 114.0%, on an operating margin of 11.6% versus 5.6%. GAAP net income was $298.8 million in the quarter, compared with a loss of $104.1 million a year earlier. For the full year, net income was $637.5 million, up 514.7%, and diluted EPS was $2.07, up from $0.34. Gross profit of $870.15 million rose 5.7% in the quarter, and the quarter's gross margin of 75.9% was up 2.2 percentage points; the full year gross margin was 76.2%, up 1.2 points. Lower personnel costs, including a steep drop in stock-based compensation, did most of the work. On a non-GAAP basis, fourth quarter income from operations was $443.7 million at a 38.7% operating margin, and non-GAAP net income was $444.0 million, or $1.42 per share.
Cash was the cleanest part of the report. Operating cash flow was $351.2 million in the quarter, up 66.0%, and $1,598.8 million for the fiscal year, up 23.9%, a full year operating cash flow margin of 35.3%. Free cash flow, which is operating cash flow less purchases of property and equipment, was $332.7 million in the quarter, up 81.5%, and $1,471.9 million for the year, up 24.1%, a 32.5% free cash flow margin. Capital expenditures were $18.5 million in the quarter, down 34.4%, and $127.0 million for the year, up 22.3%.
Customer metrics describe a base that is stable rather than fast-growing. Zoom ended the year with roughly 220,400 Enterprise customers, up 3.5%, and 3,810 customers that spent more than $100,000 in trailing 12 months revenue, up about 9.8%. The trailing 12-month net dollar expansion rate for Enterprise customers was 101%. Online average monthly churn was 3.0% in the quarter, down 40 basis points year over year, and 74.2% of total Online MRR came from customers with at least 16 months of continual service, up 220 basis points. Deferred revenue, current portion, was $1.25 billion, down 1.2% from the prior-year quarter, while remaining performance obligations were $3.57 billion, up 4.1%.
Management issued guidance for the first quarter of fiscal 2025 and for the full fiscal year 2025. For the first quarter, Zoom expects non-GAAP income from operations of $410.0 million to $415.0 million and non-GAAP diluted EPS of $1.18 to $1.20 on roughly 316 million non-GAAP weighted average shares. For the full fiscal year 2025, the company guides to non-GAAP income from operations of $1.720 billion to $1.730 billion, non-GAAP diluted EPS of $4.85 to $4.88, and free cash flow of $1.440 billion to $1.480 billion. The board also authorized repurchases of up to $1.5 billion of Class A common stock, funded from working capital, with no shares bought back as of March 1, 2024.
The 10-K spells out the risk set. High inflation, elevated interest rates, elongated sales cycles, and softer corporate spending are weighing on growth, and foreign currency moves cut $34.1 million from full year revenue. Management also cites competition, security compromises, data center or broadband failures, and the conflicts in Ukraine and Israel, which together represented roughly 1% of net assets and consolidated revenue. A restructuring plan announced in February 2023 reduced the workforce by about 15%. Much of this year's margin and cash flow improvement traces back to that leaner cost base, which makes the 101% net dollar expansion rate and the contracting Online business the numbers to watch.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.15B | $1.14B | +0.9% | $1.12B | +2.6% |
| Gross profit | $870.1M | $865.7M | +0.5% | $823.4M | +5.7% |
| Gross margin | 75.9% | 76.2% | -0.3 pp | 73.7% | +2.2 pp |
| Research & development | $205.3M | $196.8M | +4.3% | $261.3M | -21.4% |
| Sales & marketing | $371.1M | $374.4M | -0.9% | $505.6M | -26.6% |
| General & administrative | $125.3M | $125.1M | +0.1% | $186.5M | -32.8% |
| Total operating expenses | $701.6M | $696.4M | +0.8% | $953.3M | -26.4% |
| Operating income (loss) | $168.5M | $169.4M | -0.5% | -$129.9M | +229.8% |
| Operating margin | 14.7% | 14.9% | -0.2 pp | -11.6% | +26.3 pp |
| Net income (loss) | $298.8M | $141.2M | +111.6% | -$104.0M | +387.2% |
| Net margin | 26.1% | 12.4% | +13.7 pp | -9.3% | +35.4 pp |
| Diluted EPS | $0.97 | $0.45 | +$0.52 | -$0.34 | +$1.31 |
Risks
MD&A states high inflation, elevated interest rates, potential recessionary environments and geopolitical conflicts introduced uncertainty. For FY2024, Zoom experienced elongated sales cycles and decreased corporate spending, and a $34.1 million unfavorable foreign currency impact on revenue for the fiscal year ended January 31, 2024.
Risk Factors highlight generative AI challenges including insufficient or biased algorithms, IP infringement claims, high investment costs, and the potential for AI-powered communication and collaboration tools to make Zoom's platform obsolete. MD&A emphasizes AI Companion and federated AI investments.
Zoom faces competition from bundled productivity providers such as Microsoft Teams and Google Meet, legacy web meeting providers such as Cisco Webex and GoTo, UCaaS providers, and consumer platforms. Competitors may bundle or price lower, and MD&A notes increased competition and slowing demand as factors that may contribute to declines in growth rate.
Risk Factors state revenue growth has fluctuated and may continue to decline. MD&A reports the trailing 12-month net dollar expansion rate for Enterprise customers declined to 101% as of January 31, 2024 from 115% as of January 31, 2023, while FY2024 revenue was up 3.1% year over year.
Sales to large organizations have lengthened and may continue to lengthen due to significant evaluation and negotiation processes. Large organizations may demand pricing concessions or additional features, and MD&A cites elongated sales cycles as negatively impacting the revenue growth rate and net dollar expansion rate.
The business depends on renewals and upgrades, and Risk Factors note customers may not renew or may reduce subscriptions. MD&A reports online monthly average churn was 3.1% for FY2024 and revenue from Online customers represented 42.1% of total revenue, while deferred revenue current portion decreased 1.2% in FY2024 Q4 compared with FY2023 Q4.
Risk Factors disclose security measures have been compromised in the past and may be again, with threats including ransomware, nation-state actors, and supply-chain attacks. A large-scale compromise could simultaneously affect many customers and result in catastrophic liability, and past securities class actions alleged false statements about privacy and security.
Zoom is subject to evolving privacy, data protection, AI, breach notification, app store, and network neutrality rules. Risk Factors note inconsistent breach notification laws, SEC rules, and potential FCC network neutrality changes that could increase costs or limit operations.
Significant R&D personnel are in China, exposing Zoom to governmental, regulatory, market and media scrutiny. Risk Factors warn that if Chinese government agencies interfere with R&D operations, the ability to design products or deliver services would be adversely impacted. Revenue from APAC and EMEA decreased to 28.7% of total revenue for FY2024 from 30.5% for FY2023.
Competition for executives, software developers, and sales personnel is intense. The February 2023 restructuring reduced the workforce by approximately 15%, and Risk Factors note employee turnover, difficulty hiring security personnel, and potential culture harm from stock price volatility.
Zoom holds strategic investments in publicly traded and privately held companies. Risk Factors warn of partial or total loss of invested capital and volatility from fair value adjustments, and MD&A reports gains on strategic investments, net were $109.8 million for FY2024 compared with losses of $37.6 million for FY2023.
Risk Factors state that if users view Zoom primarily as a video conferencing point solution or utility rather than a platform, market position may be harmed. Negative publicity from privacy or security issues could impair the ability to attract and retain customers.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Free Cash Flow
Online Average Monthly Churn
Enterprise Customers
Free cash flow margin
Summary, forecast, risks and KPIs are extracted from Zoom Communications, Inc.'s SEC filings for Q4 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.