Shulou(Shulou.com)11/24 Report--

On the morning of February 28, Beijing time, videoconferencing software developer Zoom today released its fourth quarter of fiscal year 2023 (ending January 31, 2023) and full-year results. According to the report, Zoom's total revenue in the fourth quarter was $1.1178 billion (CTOnews.com Note: currently about RMB 7.78 billion), up 4% from $1.0714 billion in the same period last year; its net loss was $104.1 million (CTOnews.com Note: currently about RMB 725 million), and its net profit in the same period last year was $4.906 billion (CTOnews.com Note: currently about RMB 3.415 billion), turning a profit into a loss year-on-year. The net loss attributable to the company's common shareholders was also $104.1 million (CTOnews.com Note: currently approximately RMB 725 million), while the net profit attributable to the company's common shareholders in the same period last year was $490.5 million (CTOnews.com Note: currently approximately RMB 3.414 billion).

Zoom's fourth-quarter and full-year 2023 results beat Wall Street analysts' expectations, and the company's outlook for the first quarter of 2024 and the whole of 2024 mostly beat expectations, sending its shares up more than 8 per cent in after-hours trading.

Summary of fourth quarter results:

For the quarter ended January 31, 2023, Zoom posted a net loss of $104.1 million, compared with a net profit of $490.6 million in the same period last year, turning a profit into a loss. The net loss attributable to the company's common shareholders was also $104.1 million, compared with $490.5 million in the same period last year. The net diluted loss per share attributable to the company's common shareholders was $0.36, compared with $1.60 per diluted net profit per share attributable to the company's common shareholders in the same period last year.

Excluding USAGAs (excluding equity incentive expenses and related payroll taxes, M & A related expenses, strategic investment income, income tax income from separation activities and undistributed income from participating securities), Zoom's adjusted net profit for the fourth quarter was $366.6 million, or $1.22 per diluted share, compared with $393.6 million in the same period last year. Adjusted diluted earnings of $1.29 per share beat analysts' expectations. On average, 29 analysts expected Zoom's adjusted diluted earnings per share to reach $0.80 in the fourth quarter, according to data provided by Yahoo Finance.

Zoom's fourth-quarter revenue was $1.1178 billion, up 4 per cent from $1.0714 billion a year earlier. Excluding currency changes, Zoom's fourth-quarter revenue was $1.1402 billion, up 6 per cent from a year earlier, which also beat analysts' expectations. On average, 28 analysts had expected Zoom's fourth-quarter revenue to reach $1.1 billion, according to Yahoo Finance.

Zoom's fourth-quarter revenue was $636.1 million, up 18 per cent from a year earlier, while online revenue was $481.7 million, down 10 per cent from a year earlier.

Zoom's fourth-quarter revenue cost was $294.4 million, compared with $257.3 million a year earlier. Zoom's fourth-quarter gross profit was $823.4 million, compared with $814 million a year earlier.

Zoom's operating expenses were $953.3 million in the fourth quarter, compared with $562.2 million in the same period last year. Of this total, R & D expenditure was $261.3 million, compared with $116.7 million in the same period last year; sales and marketing expenditure was $505.6 million, compared with $325.4 million in the same period last year; and general and administrative expenditure was $186.5 million, compared with $1.198 in the same period last year.

Zoom posted an operating loss of $129.9 million in the fourth quarter, compared with an operating profit of $251.8 million a year earlier. Excluding US GAAP (excluding equity incentive expenses and related payroll taxes and M & A related expenses), Zoom's adjusted operating profit was $404.8 million in the fourth quarter, compared with $420.3 million in the same period a year earlier.

Zoom's fourth-quarter operating profit margin was-11.6%, compared with 23.5% in the same period last year. Excluding US general accounting principles (excluding equity incentive expenses and related payroll taxes and M & A-related expenses), Zoom's adjusted operating profit margin was 36.2% in the fourth quarter, compared with 39.2% in the same period last year.

Customer metrics:

Zoom's total revenue is driven by the acquisition of new customers and the expansion of its existing customer base. As of the end of the fourth quarter of fiscal year 2023, Zoom had:

-about 213000 enterprise customers, an increase of 12% over the same period last year

-the net dollar expansion rate of corporate customers over the past 12 months was 115%

-3471 customers contributed more than $100000 in revenue in the past 12 months, an increase of about 27% over the same period last year

-the average monthly turnover rate of online business in the fourth quarter was 3.4%, down 40 basis points from the same period last year.

-the online MRR (monthly recurring income) of online customers who have served continuously for at least 16 months accounted for 72.0% of the total online MRR, an increase of 1300 basis points compared with the same period last year.

Cash related news:

Zoom's net cash from business operations was $211.6 million in the fourth quarter, compared with $209.4 million in the same period last year. Zoom's free cash flow (calculated as net cash from business operations minus expenses on property and equipment purchases) was $183.3 million in the fourth quarter, compared with $188.6 million in the same period last year.

As of January 31, 2023, total cash, cash equivalents and marketable securities (excluding restricted cash) held by Zoom were $5.4127 billion.

Summary of results for fiscal year 2023:

For the entire fiscal year 2023, Zoom's total revenue was $4.393 billion, up 7 per cent from $4.0999 billion in the previous fiscal year. Excluding currency changes, Zoom's total revenue for the entire 2023 fiscal year was $4.462 billion, up 9% from the previous fiscal year, a performance that beat analysts' expectations. On average, 33 analysts had expected Zoom's full-year revenue to reach $4.38 billion, according to Yahoo Finance.

Zoom's corporate revenue for the entire 2023 fiscal year was $2.4093 billion, up 24 per cent from the previous fiscal year, while online revenue was $1.9836 billion, down 8 per cent from a year earlier.

Zoom's full-year operating profit was $245.4 million, compared with $1.0636 billion in the previous fiscal year. Excluding US GAAP (excluding equity incentive expenses and related payroll taxes, judicial settlement fees and M & A related expenses), Zoom's adjusted operating profit for the full year was $1.5791 billion, compared with $1.6571 billion in the previous fiscal year.

Zoom's full-year operating profit margin was 5.6%, compared with 25.9% in the same period last year. Excluding US general accounting principles (excluding equity incentive expenses and related payroll taxes, judicial settlement fees and M & A-related expenses), Zoom's adjusted operating profit margin for the full year was 35.9%, compared with 40.4% in the same period last year.

Zoom's full-year net profit attributable to common shareholders was $103.7 million, or 34 cents per diluted share, compared with $1.3751 billion, or $4.50 per diluted share, in the same period last year.

Excluding USAGAs (excluding equity incentive expenses and related payroll taxes, M & A related expenses, strategic investment income, income tax income from separation activities and undistributed income from participating securities), Zoom's full-year adjusted net profit was $1.329 billion, or $4.37 per diluted share, compared with $1.5491 billion, or $5.07 per diluted share, for the same period last year. The performance also exceeded analysts' expectations. On average, 30 analysts had expected Zoom's adjusted earnings per share to reach $3.95 for the full year, according to Yahoo Finance.

Zoom's net cash from business operations for the full year was $1.2903 billion, compared with $1.6053 billion in the previous fiscal year. Zoom's full-year free cash flow (calculated as net cash from business operations minus expenses on property and equipment purchases) was $1.1864 billion, compared with $1.4727 billion in the previous fiscal year.

Performance outlook:

Outlook for the first quarter of fiscal year 2024

Zoom expects total net revenue for the first quarter of fiscal 2024 to be between $1.08 billion and $1.085 billion; revenue excluding currency changes is expected to be between $1.097 billion and $1.102 billion, a performance outlook that is largely in line with analysts' expectations. On average, 23 analysts had expected Zoom's first-quarter revenue to reach $1.11 billion, according to Yahoo Finance.

Zoom also expects operating profit that does not comply with GAAP to reach between $374 million and $379 million in the first quarter of fiscal 2024, and diluted earnings per share that do not comply with GAAP is expected to be between 96 and 98 U.S. dollars, a performance outlook that exceeds analysts' expectations. On average, 25 analysts had expected Zoom to earn 84 cents a share in the first quarter, according to data provided by Yahoo Finance.

Full-year performance outlook for fiscal year 2024

Zoom expects total net revenue of between $4.435 billion and $4.455 billion in fiscal 2024, and between $4.458 billion and $4.478 billion excluding currency changes, a performance outlook that exceeds analysts' expectations. On average, 33 analysts had expected Zoom's full-year revenue to reach $4.38 billion, according to Yahoo Finance.

Zoom also expects operating profit that does not comply with GAAP to be between $1.606 billion and $1.626 billion in fiscal 2024, and diluted earnings per share that do not comply with GAAP is expected to be between $4.11 and $4.18, a performance outlook that also exceeds analysts' expectations. On average, 30 analysts had expected Zoom to earn $3.95 a share for the full year, according to data provided by Yahoo Finance.

Stock price response:

Zoom shares fell 21 cents, or 0.28 percent, to close at $73.72 in regular Nasdaq trading. Zoom shares rose 8.38 per cent, or 8.38 per cent, to $79.90 in after-hours trading as of 05:20 est on Monday (06:20 Beijing time on Tuesday). In the past 52 weeks, the price of the Zoom has been as high as $136.00 and as low as $63.55.

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