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Video conferencing platform Zoom (NASDAQ:ZM) missed Wall Street’s revenue expectations in Q1 CY2025 as sales rose 2.9% year on year to $1.17 billion. Its non-GAAP EPS of $1.43 per share was 9.5% above analysts’ consensus estimates.
Is now the time to buy ZM? Find out in our full research report (it’s free).
Zoom’s first quarter results were marked by ongoing adoption of its AI-powered features and expansion of high-value offerings. CEO Eric Yuan highlighted the rising popularity of Zoom AI Companion, with a 40% increase in monthly active users, and cited customer wins such as Raymond James and the Boston Celtics upgrading to broader platform solutions. The company also saw notable traction in its Customer Experience segment, with Contact Center customer growth of 65% year over year and upsell momentum for the Virtual Agent. CFO Michelle Chang pointed to record-low churn in the online segment and a growing share of enterprise customers contributing over $100,000 in annual revenue, while also noting that recent product enhancements, such as increased storage limits tied to modest price increases, have supported customer retention.
Looking ahead, Zoom’s guidance is shaped by its emphasis on expanding AI-first solutions and prudent assumptions in light of macroeconomic uncertainty. Management expects ongoing adoption of Custom AI Companion, new offerings for frontline and clinician workers, and continued channel partner expansion to support growth, though they acknowledged some elongation in enterprise deal cycles. CFO Michelle Chang explained that the updated outlook incorporates a modestly improved forecast for the online segment, aided by price increases and product enhancements, but a more conservative stance for enterprise due to greater scrutiny in large deal negotiations. CEO Eric Yuan reiterated the company’s focus on integrating intelligent workflow automation and agentic AI capabilities, stating that these innovations are “transforming Zoom from a communication platform into a system of actions that streamlines business processes.”
Management attributed the quarter’s results to expanding AI capabilities and increased product integration, while acknowledging selective softness in enterprise demand.
Zoom’s outlook focuses on accelerating AI-driven product adoption and navigating a cautious enterprise environment as macroeconomic pressures persist.
In coming quarters, the StockStory team will monitor (1) adoption rates and monetization progress for Custom AI Companion and other AI-driven offerings, (2) the pace of enterprise deal closures and any improvement in sales cycle duration, and (3) expansion of channel-led sales, particularly in Contact Center and Phone. Execution on international growth and continued customer retention in the online segment will also be key indicators of Zoom’s ability to meet its updated guidance.
Zoom currently trades at a forward price-to-sales ratio of 5.1×. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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