Zoom Communications Inc (NASDAQ:ZM) stock fell 9.17% (As on February 25, 11:28:26 AM UTC-4, Source: Google Finance) after the company fell short of expectations with its first-quarter outlook despite reporting a beat in earnings in its fiscal 2025 fourth quarter. Across its verticals, Zoom saw enterprise revenue in the quarter of $706.8 million, up 5.9% year-over-year, while online revenue came in at $477.3 million, down 0.4% year-over-year. As of the end of the quarter, Zoom had 192,600 enterprise customers, with a trailing-12-month net dollar expansion rate of 98%. The company also had 4,088 customers contributing more than $100,000 in trailing-12-month revenue, up 7.3% from the same quarter in the previous fiscal year. Total cash, cash equivalents, and marketable securities, excluding restricted cash, as of January 31, 2025 was $7.8 billion. Net cash provided by operating activities was $424.6 million for the fourth quarter, compared to $351.2 million in the fourth quarter of fiscal year 2024, up 20.9% year over year. Free cash flow, which is net cash provided by operating activities less purchases of property and equipment, was $416.2 million in the fourth quarter, compared to $332.7 million in the fourth quarter of fiscal year 2024, up 25.1% year over year.

ZM in the fourth quarter of FY 25 has reported the adjusted earnings per share of $1.41, beating the analysts’ estimates for the adjusted earnings per share of $1.30. The company had reported the adjusted revenue growth of 3.3 percent to $1.18 billion in the fourth quarter of FY 25, which is inline with the analysts’ estimates for revenue of $1.18 billion. Non-GAAP income from operations was $468.0 million for the fourth quarter, compared to non-GAAP income from operations of $443.7 million in the fourth quarter of fiscal year 2024. For the fourth quarter, GAAP and non-GAAP operating margin was 19.0% and 39.5%, respectively, up from 14.7% and 38.7%, respectively, in the fourth quarter of fiscal year 2024.

For its fiscal 2026 first quarter, Zoom expects adjusted earnings per share of $1.29 to $1.31 on revenue of $1.16 billion to $1.17 billion. Both were misses at the midpoint, though not by much, as analysts were expecting $1.31 per share on revenue of $1.18 billion.

For the full year, the company expects adjusted earnings per share of $5.34 to $5.37 on revenue of $4.79 billion to $4.8 billion. Analysts were expecting $5.45 per share on revenue of $4.66 billion.