Is the business good?
How good a business is ZM?
Zoom Communications, Inc. earns 42% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
42%
Return on invested capital · cost of capital 9.0% · 33 points above what the capital costs: growth creates value
- Operating margin
- 24%
Operating margin · Software - Application median 8.2% · 12 months to Q1 2027
- Cash conversion
- 0.95×
Cash conversion · 1.62× a year ago · some of the reported profit has not turned into cash yet
- Share count, year on year
- −4.0%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2021 | 25% |
| FY2022 | 26% |
| FY2023 | 5.6% |
| FY2024 | 12% |
| FY2025 | 17% |
| FY2026 | 23% |
Details›
- Gross margin12 months to Q1 2027
- 77%
- Operating margin12 months to Q1 2027
- 24%
- Net margin12 months to Q1 2027
- 42%
- Free cash flow margin
- 40%
- R&D as % of revenue
- 18%
- Revenue, trailing twelve months
- $4.93B
- Free cash flow, trailing twelve months
- $1.96B
- Net income, trailing twelve months
- $2.07B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 42%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion from the cash flow statement.
Software - Application
Ranks #1 of 90 by Smart Score