Zoom Video Communications, Inc. (ZM) 10-Q Quarterly Report November 2021

SAN JOSE, California – November 22, 2021 – Zoom Video Communications, Inc. (NASDAQ: ZM) today announced financial results for the third fiscal quarter ended October 31, 2021.

“In Q3, we held our premier user event, Zoomtopia, on our Zoom Events service. During this immersive, multi-track conference, we showcased how Zoom is placing people at the center of our communications platform, connecting their disparate work streams into our technology, moving beyond enterprises’ ability to collaborate internally, and empowering them to communicate face-to-face with their customers through Zoom Events and our upcoming Video Engagement Center. We also showcased innovations such as hot desking, whiteboarding, and smart gallery, all designed to empower both co-located and remote hybrid workforces as some companies test return to office programs,” said Zoom founder and CEO, Eric S. Yuan. “Through innovation and dedication, we will continue to deliver happiness to our customers. Looking forward, we expect to close the year between $4.079 to $4.081 billion in total revenue, representing approximately 54% year-over-year growth, alongside strong profitability and operating cash flow growth. We are well on our way to becoming an indispensable platform for enterprises, individuals, and developers to connect, collaborate, and build in the flexible hybrid world of work. We believe our global brand, innovative technologies, and large customer base position us well for the future.”

Third Quarter Fiscal Year 2022 Financial Highlights:

•Revenue: Total revenue for the third quarter was $1,050.8 million, up 35% year over year.

•Income from Operations and Operating Margin: GAAP income from operations for the third quarter was $290.9 million, up from $192.2 million in the third quarter of fiscal year 2021. After adjusting for stock-based compensation expense and related payroll taxes, and acquisition-related expenses, non-GAAP income from operations for the third quarter was $411.3 million, up from $290.8 million in the third quarter of fiscal year 2021. For the third quarter, GAAP operating margin was 27.7% and non-GAAP operating margin was 39.1%.

•Net Income and Diluted Net Income Per Share: GAAP net income attributable to common stockholders for the third quarter was $340.3 million, or $1.11 per share, up from $198.4 million, or $0.66 per share in the third quarter of fiscal year 2021.

Non-GAAP net income for the third quarter was $338.4 million, after adjusting for stock-based compensation expense and related payroll taxes, acquisition-related expenses, gains on strategic investments, net, and undistributed earnings attributable to participating securities. Non-GAAP net income per share was $1.11. In the third quarter of fiscal year 2021, non-GAAP net income was $297.2 million, or $0.99 per share.

•Cash and Marketable Securities: Total cash, cash equivalents, and marketable securities, excluding restricted cash, as of October 31, 2021 was $5.4 billion.

•Cash Flow: Net cash provided by operating activities was $394.6 million for the third quarter, compared to $411.5 million in the third quarter of fiscal year 2021. Free cash flow, which is net cash provided by operating activities less purchases of property and equipment, was $374.8 million, compared to $388.2 million in the third quarter of fiscal year 2021.

Customer Metrics: Drivers of total revenue included acquiring new customers and expanding across existing customers. At the end of the third quarter of fiscal year 2022, Zoom had:

•2,507 customers contributing more than $100,000 in trailing 12 months revenue, up approximately 94% from the same quarter last fiscal year.

•Approximately 512,100 customers with more than 10 employees, up approximately 18% from the same quarter last fiscal year.

•A trailing 12-month net dollar expansion rate in customers with more than 10 employees above 130% for the 14th consecutive quarter.

The following information was filed by Zoom Video Communications, Inc. (ZM) on Monday, November 22, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Zoom Video Communications, Inc.'s 10-Q Quarterly Report:

Financial - Shares Highlight
Gains on Strategic Investments, Net 33 Table of Contents Gains on strategic investments, net recognized during the nine months ended October 31, 2021 was driven by $104.9 million unrealized gains recognized on our publicly traded equity securities and $49.6 million unrealized gains recognized on our privately held equity securities, while we had gains on strategic investments, net of $2.5 million recognized during the nine months ended October 31, 2020.

Financial - Shares Highlight
Gains on Strategic Investments, Net Gains on strategic investments, net recognized during the three months ended October 31, 2021 was driven by $72.8 million unrealized gains recognized on our publicly traded equity securities and $49.6 million unrealized gains recognized on our privately held equity securities.
Revenue - Product Highlight
However, based on our current business plan and revenue prospects, we believe our existing cash, cash equivalents, and marketable securities, together with net cash provided by operations, will be sufficient to meet our needs for at least the next 12 months and allow us to capitalize on growth opportunities.
Financial - Income Highlight
The change was primarily due to an increase in global income, certain elections and accounting method changes creating additional book-tax differences, as well as a decrease in stock-based compensation for tax purposes.
Financial - Income Highlight
The change was primarily due to an increase in global income, certain elections and accounting method changes creating additional book-tax differences, as well as a decrease in stock-based compensation for tax purposes.
Other - Other
Liquidity and Capital Resources As...Read more
Revenue - Product
We plan to increase our...Read more
Financial - Earnings
Gross margin increased to 74%...Read more
Financial - Earnings
32 Table of Contents Gross...Read more
Other - Other
We believe that FCF is...Read more
Revenue - Product
The increase in revenue was...Read more
Revenue - Product
The increase in revenue was...Read more
Financial - Expense
These costs are related to...Read more
Financial - Expense
However, the cost of revenue...Read more
Financial - Earnings
Therefore, the recent increase in...Read more
Revenue - Product
Comparison of the Nine Months...Read more
Revenue - Product
As of October 31, 2021...Read more
Revenue - Product
Our revenue was $1,050.8 million...Read more
Revenue - Product
Our revenue was $3,028.5 million...Read more
Financial - Income
31 Table of Contents Interest...Read more
Financial - Income
Interest Income and Other, Net...Read more
Other - Other
Cash from operations could also...Read more
Other - Other
Our net dollar expansion rate...Read more
Revenue - Product
The remaining increase was primarily...Read more
Other - Other
Governments have instituted lockdown or...Read more
Revenue - Product
Our future capital requirements will...Read more
Financial - Debt
Our marketable securities generally consist...Read more
Revenue - Product
Customers Contributing More Than $100,000...Read more
Other - Other
FCF is 27 Table of...Read more
Other - Other
Innovation and Expansion of Our...Read more
Revenue - Product
Our net dollar expansion rate...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Zoom Video Communications, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Ticker: ZM
CIK: 1585521
Form Type: 10-Q Quarterly Report
Accession Number: 0001585521-21-000295
Submitted to the SEC: Tue Nov 23 2021 4:09:46 PM EST
Accepted by the SEC: Tue Nov 23 2021
Period: Sunday, October 31, 2021
Industry: Computer Programming Data Processing