Analyzes Zoom’s 4Q24 and full fiscal year financial results.

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Summary

Zoom has announced its 4Q24 and full fiscal year financial results. It reported modest overall growth in full fiscal year total revenue of $4.6bn, up 3.1% year-over-year (YoY). Growth on the enterprise side is more encouraging, with full fiscal year Enterprise revenue of $2,7bn, up 5.2% YoY. Zoom’s results also outline the potential for its contact center solution and Workvivo employee engagement platform to drive new revenue opportunities going forward.

Zoom’s AI approach offers the vendor a strategic edge in a competitive market

Artificial intelligence (AI) has become central to Zoom’s strategy. Omdia has previously commented on how the vendor’s cost-effective and richly integrated AI productivity capabilities have the potential to help the vendor win against competitors. Encouragingly, Zoom reports that its AI Companion experienced a 68% growth in monthly active users quarter-over-quarter. Given that the baseline version of AI Companion is offered at no additional cost for Workplace customers, the important thing now will be for Zoom to grow AI-related revenue through advanced services that offer business value. The expansion of its industry-specific AI solutions represents a key growth opportunity.

Zoom’s healthy enterprise business is being driven by encouraging retention and platform expansion

Zoom also reported 192,600 Enterprise customers (it reported approximately 220,400 Enterprise customers in last year’s results). However, some that were previously categorized as Enterprise customers (with larger monthly recurring revenue, or MRR) have been reclassified as Online customers, which are generally smaller and have lower MRR. This reclassification in the way Zoom analyzes its customer base is not representative of customer churn but more of a different way of segmenting customers. Consequently, Zoom announced that as of the first quarter of fiscal year 2026, it will no longer report on the number of Enterprise customers as a metric.

Zoom’s customer retention rate and their spending are healthy. The vendor’s trailing 12-month net dollar expansion rate for Enterprise customers is 98%, which means that Zoom customers are spending 98% of what they spent the previous year. Zoom has invested significantly in broadening the capabilities of its platform beyond just the core of meetings and unified communications over recent years, notably into the realms of contact center and employee engagement—something the vendor must continue to do. The broader Zoom platform capabilities present a good opportunity for the vendor to grow this revenue, especially through upselling across its customer base.

Workvivo and Contact Center are Zoom’s fastest-growing business segments

Zoom’s Contact Center and Workvivo employee engagement solution experienced impressive growth and traction. On the Contact Center side, Zoom announced 100%-plus YoY growth in large contact center customers, and the number of customers with $100,000-plus in annual recurring revenue (ARR) doubled YoY. Seven of Zoom’s top 10 Contact Center deals also replaced instances from legacy contact center as a service (CCaaS) vendors, highlighting how Zoom is being disruptive in this space. Most notably, Zoom also shared that it completed its largest ARR deal in contact center history covering 15,000 agents with a Fortune 100 US tech company. Contact Center will continue to represent a key area of growth for Zoom. The vendor’s AI-first approach to evolving its solution here will continue to disrupt the CCaaS market and provide Zoom with opportunities for growth.

Workvivo represents another important growth driver for Zoom. The vendor reported 89% YoY growth in total customers for its employee engagement solution. It also shared that it has signed three $1m-plus ARR deals, including one with Delta Airlines, which moved its entire workforce to Workvivo. The fact that Zoom is the preferred partner for migration for Meta Workplace customers is significant, but the upselling element also represents an opportunity for growth.

It will be important for Zoom to not tie Workvivo to legacy product categories, such as intranet or basic internal communication and employee recognition tools. Zoom’s opportunity with Workvivo is to lead on a new employee engagement platform category that still supports what these legacy products deliver while also presenting a compelling opportunity to transform employee communications and productivity. Broadening the frontline worker use cases, delivering employee engagement metrics and analytics tying them to customer outcomes, and delivering industry-specific solutions will all be vital.

Growth blueprint and strategic recommendations for Zoom

  • Monetizing AI: We are still at a nascent stage of business AI adoption, with organizations still unsure of optimal cost models and ROI indicators. Zoom’s AI capabilities and different AI cost approaches that build on a freemium model baseline represent strengths. The vendor must focus on upselling freemium customers to paid AI approaches with meaningful and value-added capabilities—but without compromising its baseline freemium proposition. Expanding AI into contact center and industry-specific solutions, as well as further strengthening AI integrations with third-party tools, will all be important.
  • Scale contact center: Continue to grow the contact center business by targeting customers looking to modernize their solutions. Channel partnerships will be vital here, with Zoom announcing that 6 of the 10 top 4Q24 contact center deals came via the channel.
  • Advancing Workvivo expansion: Workvivo is becoming a vital solution, essential in helping Zoom grow its business footprint beyond just its meetings & chat heritage. Workvivo must continue to evolve into a platform that supports employee productivity and communication across the entire workforce. At the same time, it must also provide leadership with new data and analytical capabilities that help them better understand employee outcomes, sentiment, and the impact of both on business operations.
  • Further strengthen enterprise propositions: Zoom shared how 60% of its total revenue is attributed to its enterprise propositions. Further growing its enterprise footprint represents an important opportunity. To do this, Zoom must maintain its focus on Fortune 500 organizations and engage C-suite leaders on its proposition to drive broader platform awareness and adoption. The vendor’s planned expansion of industry-specific solutions will also be important here. Finally, continuing to develop its ecosystem of integrations will be key. Deep integrations with other important business technologies will help Zoom grow its enterprise-related revenue.

Appendix

Further reading

Zoom Communications Reports Fourth Quarter and Fiscal Year 2025 Financial Results,” Zoom (retrieved February 25, 2025)

Author

Adam Holtby, Principal Analyst, Workplace Transformation

askananalyst@omdia.com