Just days after it opened its London Engagement Hub to demonstrate the changing nature of the employee experience, Zoom Video Communications has reported financial results for the second quarter of its fiscal year 2024, showing that overall business is still growing steadily but with particular increased growth in the enterprise sector.
For the quarter ended 31 July 2023, Zoom posted total revenue of $1.139bn, up 3.6% year-on-year. After adjusting for foreign currency impact, revenue in constant currency was $1.149bn, up 4.5%. Showing the contrasting fortunes of the two sectors, enterprise revenue was $659.5m, up 10.2% on an annual basis, while online revenue was $479.2m, down 4.3% compared with the second quarter of the previous year.
Zoom’s GAAP income from operations for the second quarter was $177.6m, compared with GAAP income from operations of $121.7m in the second quarter of fiscal year 2023. Net non-GAAP income from operations for the second quarter was $461.7m, compared with non-GAAP income from operations of $393.7m in the second quarter of fiscal year 2023. For the second quarter, GAAP operating margin was 15.6% and non-GAAP operating margin was 40.5%.
GAAP net income attributable to common stockholders for the second quarter was $182m, compared with GAAP net income of $45.7m in the second quarter of fiscal year 2023.
Drivers of this uptick in revenue included acquiring new customers and expanding across existing customers. At the end of the second quarter of fiscal year 2024, Zoom had amassed approximately 218,100 Enterprise customers, up 6.9% from the same quarter last fiscal year. There was also a trailing 12-month net dollar expansion rate for Enterprise customers of 109%.
As many as 3,672 customers contributed more than $100,000 in trailing 12 months revenue, up approximately 17.8% from the same quarter last fiscal year.
Zoom recorded an online average monthly churn of 3.2% for the second quarter, down 40 bps from the same quarter last fiscal year. The percentage of total online monthly recurring revenue (MRR) from online customers with a continual term of service of at least 16 months was 72.8%, up 340 bps year-on-year.
“Our mission of delivering limitless human connection remains core as we continue to innovate and expand our platform to help bring value and enhanced productivity to our customers with new AI [artificial intelligence] features like Zoom IQ Meeting Summary and Team Chat Compose, as well as Intelligent Director,” said Eric S Yuan, Zoom founder and CEO. “I’m also proud of the team for reinventing modern customer experiences with Zoom Virtual Agent and Zoom Contact Center, which surpassed 500 customers in Q2.
“In addition to delivering innovation to our customers, in Q2 we delivered GAAP EPS of $0.59 and non-GAAP EPS of $1.34, both up meaningfully year-over-year. With this strong operating discipline, we grew operating cash flow by 31% year-over-year to $336m.”
Going forward, Zoom expects third-quarter total revenue to be between $1.115bn and $1.120bn, and revenue in constant currency is expected to be between $1.117bn and $1.122bn. Non-GAAP income from operations is expected to be between $400m and $405m.
Full fiscal year 2024 total revenue is now forecast to be between $4.485bn and $4.495bn, and in constant currency it is expected to be between $4.516bn and $4.526bn. Full fiscal year non-GAAP income from operations is expected to be between $1.685bn and $1.695bn.