Summary
Zoom Communications closed fiscal year 2025 with fourth quarter total revenue of $1.18 billion, up 3.3% year over year, and full fiscal year revenue of $4.67 billion, up 3.1%. Constant currency revenue grew 3.6% in the quarter and 3.3% for the year. Management framed the year around AI Companion, which it described as the driving force behind the company's shift into an AI-first platform. Contact Center and Workvivo both had strong fourth quarters in strategic logo wins and upmarket momentum. The federated approach to AI lets users tap models from OpenAI, Anthropic, and Meta, and Zoom does not use customer audio, video, chat, screen sharing, or attachments to train its own or third-party AI models.
Profitability improved. Fourth quarter gross profit was $896.78 million, with gross margin of 75.7%, down 0.2 percentage points year over year. Operating income was $225.06 million, and GAAP operating margin reached 19.0%, up 430 basis points. Non-GAAP operating margin was 39.5%, up 80 basis points. Non-GAAP income from operations was $468.0 million in the quarter, compared with $443.7 million a year earlier. Net income was $367.86 million, up 23.1%. For the full fiscal year, operating income was $813.30 million, net income was $1.01 billion, and diluted EPS was $3.21, up 55.1% compared with fiscal year 2024. Full year non-GAAP operating margin was 39.4%, up 20 basis points, and full year non-GAAP income from operations was $1,837.9 million, compared with $1,774.9 million in fiscal year 2024. Management tied the margin gain to prioritizing investments and controlling share-based compensation.
Cash generation remained the strongest part of the story. Fourth quarter operating cash flow was $424.6 million, up 20.9%, while capital expenditures were $8.33 million, down 55.0%. Free cash flow, defined as operating cash flow less purchases of property and equipment, was $416.2 million, up 25.1%. Full year operating cash flow was $1,945.3 million, up 21.7%, and capital expenditures were $136.56 million, up 7.6%. Full year free cash flow was $1,808.7 million, up 22.9%. Current deferred revenue was $1.34 billion, up 6.8%, and remaining performance obligations were $3.80 billion, up 6.4%.
Customer metrics looked steady rather than fast growing. The trailing 12 month net dollar expansion rate for Enterprise customers was 98%. Zoom ended the quarter with approximately 192,600 Enterprise customers and 4,088 customers contributing more than $100,000 in trailing 12 month revenue, up approximately 7.3% from the same quarter last fiscal year. Online average monthly churn was 2.8%, down 20 basis points from a year earlier, and 75.1% of total Online MRR came from Online customers with a continual term of service of at least 16 months, up 90 basis points year over year. Zoom will stop reporting the number of Enterprise customers as a key business metric beginning in the first quarter of fiscal year 2026, arguing that heavy overlap between the Enterprise and Online categories has made the count less meaningful. It repurchased approximately 4.3 million shares in the fourth quarter and approximately 15.9 million shares during the full fiscal year, leaving $1.6 billion of authorized repurchase remaining as of January 31, 2025.
Guidance covers the first quarter of fiscal year 2026 and the full fiscal year 2026. For the first quarter, Zoom expects non-GAAP income from operations between $440.0 million and $445.0 million, and non-GAAP diluted EPS between $1.29 and $1.31 on approximately 316 million non-GAAP weighted average shares outstanding. For the full fiscal year 2026, it guided non-GAAP income from operations between $1.850 billion and $1.860 billion, non-GAAP diluted EPS between $5.34 and $5.37 on approximately 318 million non-GAAP weighted average shares outstanding, and free cash flow between $1.680 billion and $1.720 billion. Zoom also issued revenue guidance for both periods but said a reconciliation of forward-looking non-GAAP measures to GAAP is not available without unreasonable effort.
Risks remain familiar. Management pointed to macroeconomic uncertainty, including geopolitical conflicts, tariffs and trade tensions, inflationary pressures, interest rate fluctuations, and foreign currency volatility, along with elongated sales cycles and more scrutiny of IT budgets. Higher market penetration, increased competition, and the maturation of the business also pressure the growth rate. The 10-K lists declines in new customers, renewals, or upgrades, weaker demand for the platform, delays or outages at co-located data centers, and compromised security measures among the risks. Zoom also flagged the judgment required to value privately held strategic investments. On the product side, Zoom Tasks, a custom AI Companion add-on, Zoom Workplace for Frontline Workers, and Zoom Workplace for Clinicians are expected to be generally available in the first half of 2025.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2025 | Q3 FY2025 | QoQ | Q4 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.18B | $1.18B | +0.6% | $1.15B | +3.3% |
| Gross profit | $896.8M | $893.7M | +0.3% | $870.1M | +3.1% |
| Gross margin | 75.7% | 75.9% | -0.2 pp | 75.9% | -0.2 pp |
| Research & development | $217.1M | $223.0M | -2.6% | $205.3M | +5.8% |
| Sales & marketing | $358.9M | $361.7M | -0.8% | $371.1M | -3.3% |
| General & administrative | $95.7M | $126.1M | -24.1% | $125.3M | -23.6% |
| Total operating expenses | $671.7M | $710.8M | -5.5% | $701.6M | -4.3% |
| Operating income (loss) | $225.1M | $182.8M | +23.1% | $168.5M | +33.5% |
| Operating margin | 19.0% | 15.5% | +3.5 pp | 14.7% | +4.3 pp |
| Net income (loss) | $367.9M | $207.1M | +77.7% | $298.8M | +23.1% |
| Net margin | 31.1% | 17.6% | +13.5 pp | 26.1% | +5.0 pp |
| Diluted EPS | $3.21 | $0.66 | +$2.55 | $0.97 | +$2.24 |
| Customers | 2,024 | — | — | — | — |
Risks
MD&A states geopolitical conflicts, tariffs, inflationary pressures, and interest rate fluctuations continue to create demand uncertainty, elongate sales cycles, and increase scrutiny of IT budgets. The trailing 12 month net dollar expansion rate for Enterprise customers was 98% as of January 31, 2025, down from 101% a year earlier and 115% two years earlier, which management said has dropped below 100%.
Risk Factors warn that AI-powered communication and collaboration tools from competitors could make Zoom's platform obsolete, and Zoom offers its AI features at no additional cost while third-party AI model dependencies and legal or IP claims add risk. MD&A attributes part of the gross margin decrease to 75.8% for FY2025 from 76.2% for FY2024 to increased costs from AI functionality.
Zoom's revenue growth rate has fluctuated and may remain flat or decline; revenue increased 3.1% for FY2025 to $4.67 billion and management cites higher market penetration, increased competition, and business maturation. The business depends on attracting new customers, retaining and upselling existing customers, and upgrading free users to paid offerings.
Risk Factors emphasize competition from bundled productivity suites such as Microsoft 365 with Teams and Google Workspace with Meet, legacy web meeting and UCaaS providers, and consumer platforms. Pricing is sensitive, and Zoom has used price-cutting or discounts to attract and retain customers.
Zoom has experienced past security incidents and vulnerabilities, including high or critical vulnerabilities in products and systems, and says it has limited budgetary and human resources for detecting and remediating vulnerabilities, with hiring difficulties for security personnel especially after restructuring actions. A large-scale compromise could affect many customers simultaneously.
As Zoom increases sales to large organizations, large customers' evaluation and negotiation processes have lengthened sales cycles and may cause deployment challenges and higher up-front sales costs. MD&A notes macroeconomic conditions have led to elongated sales cycles and increased IT budget scrutiny.
Zoom relies on co-located data centers and cloud hosting services such as AWS, Oracle Cloud, and Microsoft Azure; past partial outages impacted a subset of users, and capacity constraints or shortages for server parts could delay bringing additional data centers online. Interruptions could trigger credits, penalties, and customer terminations.
A significant portion of Zoom's research and development organization resides in China, exposing it to governmental and regulatory scrutiny and potential interference with product development or service delivery. International revenue from APAC and EMEA was 28.2% of total revenue for FY2025, down from 28.7% for FY2024 and 30.5% for FY2023.
Zoom has undertaken restructuring actions, and Risk Factors say these actions may adversely affect its ability to recruit, retain, and motivate highly skilled personnel and have caused employee turnover. Competition for software developers, sales personnel, and security staff is intense, and equity compensation attractiveness may be affected by stock price volatility.
Zoom faces evolving privacy, data protection, AI, and information security obligations, and generative AI use may lead to legal liability or IP infringement claims. App store requirements from Apple and Google and data privacy changes could impact how Zoom and partners collect, use, and share data.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Free Cash Flow
Online Average Monthly Churn
Enterprise Customers
Customers Contributing More Than $100,000 in Trailing 12 Months Revenue
Free cash flow margin
Percentage of total Online MRR from Online customers with continual term of service of at least 16 months
Summary, forecast, risks and KPIs are extracted from Zoom Communications, Inc.'s SEC filings for Q4 FY2025 (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.