Zoom has reported three percent year-over-year growth at its Q1 2024 earnings call, despite laying off 15 percent of its staff.
As a result of waning demand for video conferencing services, in February this year, Zoom announced it would cut 1,300 employees, and the CEO, Eric Yuan, took a 98 percent pay reduction.
Nevertheless, Zoom has achieved a total revenue of $1.105 billion, which is roughly $20 million above the high end of guidance.
Eric S. Yuan, Zoom Founder and CEO, said: “The Zoom platform is designed to support limitless human connection to empower the modern workday and strengthen customer relationships.
“Our customers see Zoom as mission-critical in how they collaborate internally and externally across the globe.
“This relationship with our customers helped us to exceed our guidance due to enterprise growth and stabilizing online revenue while driving greater efficiencies in our business to deliver strong profitability and free cash flow margin.
“The solid start to the year has enabled us to raise our outlook for fiscal year 2024 while continuing to invest in innovations such as AI to help make interactions more meaningful and communications more effective.”
Other notable financial results included its non-GAAP gross margin of 80.5 percent exceeding its long-term target, enterprise business up 13 percent, online revenue increasing, and Zoom Phone surpassing ten percent of quarterly revenue.
It wasn’t all roses for the communications platform provider, however.
While revenue in the Americas grew eight percent, it declined in EMEA and APAC by eight percent and five percent respectively.
Kelly Steckelberg, CFO at Zoom Video Communications, explained that this loss was due to local regulations prolonging the redundancy process, a stronger dollar, and the Russia-Ukraine war.
Yuan shared his view of the quarter from a product perspective, reflecting on its acquisition of Workvivo, investment in AI, Zoom Contact Center, Zoom Phone, and more.
Last month, Zoom acquired Workvivo, the modern employee communication and engagement platform, which merges a social intranet and app into a central hub.
Yuan said that by integrating Workvivo, Zoom will be able to offer its customers a unified platform to keep connected throughout the workday.
In regards to AI, Zoom has made good progress towards its goal of deploying generative AI throughout its portfolio.
ZoomIQ, for example, added new in-beta features which use generative AI for chat compose, email compose, and meeting summaries.
Last week, Zoom announced its strategic investment in Anthropic, enabling Zoom to integrate the company’s AI assistant, Claude, across its entire platform.
The in-beta Zoom Workforce Management will be among the first solutions to be integrated with Claude, as well as Zoom Contact Center and Zoom Virtual Agent.
Yuan reminded investors that AI is nothing new at Zoom: “It seems like everyone has just woken up to AI.
“We have been busy on the AI front for a few years. If you look at the past, two of our largest acquisitions, Solvvy and Kites, are AI-based.
“Internally, we also have an AI team because we understand the importance of AI, in particular the recent generative AI momentum.”
Yuan also pointed to some big wins for Zoom this quarter, which included Virginia Tech and Vensure both adding around 10,000 Zoom Phone seats.
Earlier this month, Zoom received a Unified License with Access to provide Zoom Phone to businesses in India.
Looking ahead, for Q2 Zoom is expecting its revenue to grow to between $1.110 billion and $1.115 billion, with a non-GAAP income between $405 million and $410 million.
For the full fiscal year of 2024, Zoom is expecting the total revenue to be between $4.465 billion and $4.485 billion, with a non-GAAP income between $1.630 billion and $1.650 billion.
