Zoom profits up despite CEO's doubts about remote working
And CFO is off, maybe to find a role where she doesn't have to come into the office
Zoom continues to turn a profit from providing remote collaboration tools, despite mandating that its own staff must work in the office at least twice a week.
The pandemic tech darling reported revenue for Q2 of its fiscal 2025 ended July 31 of $1.16 billion, up 2.1 percent year-on-year, and said enterprise revenue for the same period amounted to $682.8 million, up 3.5 percent.
Income from operations for the quarter was $202.4 million, compared to operating income of $177.6 million for the same period a year ago.
Founder and CEO Eric Yuan used an earnings conference call to say Zoom had outperformed its guidance across the board, and had seen increased strength in large accounts. Customers that contributed more than $100,000 in revenue over the preceding 12 months increased 7.1 percent, he claimed.
Zoom Contact Center racked up several "marquee customers" during the quarter, according to Yuan, including its largest single deal to date. He said this highlights the company's ability to win competitive deals for full-scale, customer-facing deployments "with our higher-end packages that utilize advanced AI features to enhance agent performance."
On the earnings call, Yuan said the rollout of Zoom Workplace features over the last few months represented "the most significant upgrade to the Zoom experience in years."
"We reinvigorated the UI with the simplicity and reliability that has defined Zoom from the very beginning, while also adding to the capabilities of Zoom Meetings, Zoom Team Chat, and Zoom Phone, and strengthening how AI Companion operates across these modalities."
He highlighted the launch just days ago of a new Zoom Webinar service that can now host up to 1 million attendees, plus the recent introduction of Zoom Docs, an AI-powered tool intended to transform meeting content into actionable documents.
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In response to a question, Yuan reiterated that Zoom will not use any customer data to train its AI models, and said he did not think the company was exposed to any potential AI regulations in the EU or US.
"We take customer data very, very seriously, right? And as a customer, they know that they trust our brand and trust what we're doing, and so far, I do not see any impact in terms of regulation," he said.
Also on the call, Zoom disclosed that chief financial officer Kelly Steckelberg will be leaving after almost seven years at the company. No reason was given for her departure, but perhaps she's seeking a job where she won't be forced to come into the office.
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Zoom famously surprised its workerforce last year by insisting that any of them living within 50 miles of an office were required to come in at least two days a week. Yuan is even said to have told employees that their own product does not allow the company to "build as much trust or be as innovative as in the office."
Financial news outfit Investing.com noted that Steckelberg sold all her direct holdings in Zoom at the end of June, some 5,007 shares of Class A common stock amounting to more than $288,000.
On the call, Steckelberg said that Zoom's revenue was approximately $13 million above the high end of the company's guidance, and enterprise revenue represented 59 percent of the total, up from 58 percent a year ago.
Looking ahead, Steckelberg said Zoom expects Q3 revenue to be in the range of $1.16 billion to $1.165 billion, which at the midpoint would represent another 2.3 percent year-over-year growth. She added that Q2 was likely to have been the low point this year in terms of growth, and it would start to pick up in Q3.
That's still quite a comedown from during the pandemic, when Zoom saw its revenue leap by 367 percent year-on-year for the quarter ended 31 October 2020, but those were extremely unusual circumstances.
For the full fiscal 2025, Zoom's forecast is for revenue to be in the range of $4.63 billion to $4.64 billion, approximately 2.4 percent growth for the year. ®