Zoom Earnings: Company Sees the Quarter as a Growth Trough With 2025 Outlook Largely in Line

Narrow-moat Zoom reported good fourth-quarter fiscal 2024 results that were above our expectations on the top- and bottom line, while the fiscal 2025 outlook was largely in line with what we anticipated. We see results as a continuation of trends from last quarter, with enterprise growth outperforming the corporate average, but still decelerating. Importantly, management believes the second quarter will be the trough for revenue growth and expects to see modest top-line acceleration in the second half of the year. Zoom also highlighted strength in its fledgling contact center business, which is positive, as it carries an attractive price point to help drive revenue growth. Last, the board authorized a new $1.5 billion share repurchase. Given in-line guidance, we see little reason to make material changes to our model. Thus, we are maintaining our fair value estimate of $89 per share and see the stock as undervalued.