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Zoom Video Communications (Zoom Video Communications) ROE % : 10.60% (As of Apr. 2024)


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What is Zoom Video Communications ROE %?

ROE % is calculated as Net Income divided by its average Total Stockholders Equity over a certain period of time. Zoom Video Communications's annualized net income for the quarter that ended in Apr. 2024 was $865 Mil. Zoom Video Communications's average Total Stockholders Equity over the quarter that ended in Apr. 2024 was $8,159 Mil. Therefore, Zoom Video Communications's annualized ROE % for the quarter that ended in Apr. 2024 was 10.60%.

The historical rank and industry rank for Zoom Video Communications's ROE % or its related term are showing as below:

ZM' s ROE % Range Over the Past 10 Years
Min: 1.73   Med: 18.75   Max: Negative Equity
Current: 11.25

During the past 8 years, Zoom Video Communications's highest ROE % was Negative Equity%. The lowest was 1.73%. And the median was 18.75%.

ZM's ROE % is ranked better than
68.87% of 2628 companies
in the Software industry
Industry Median: 3.555 vs ZM: 11.25

Zoom Video Communications ROE % Historical Data

The historical data trend for Zoom Video Communications's ROE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Zoom Video Communications ROE % Chart

Zoom Video Communications Annual Data
Trend Jan17 Jan18 Jan19 Jan20 Jan21 Jan22 Jan23 Jan24
ROE %
Get a 7-Day Free Trial 6.12 28.64 28.54 1.73 8.96

Zoom Video Communications Quarterly Data
Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24 Apr24
ROE % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.97 10.76 7.84 15.49 10.60

Competitive Comparison of Zoom Video Communications's ROE %

For the Software - Application subindustry, Zoom Video Communications's ROE %, along with its competitors' market caps and ROE % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Zoom Video Communications's ROE % Distribution in the Software Industry

For the Software industry and Technology sector, Zoom Video Communications's ROE % distribution charts can be found below:

* The bar in red indicates where Zoom Video Communications's ROE % falls into.



Zoom Video Communications ROE % Calculation

Zoom Video Communications's annualized ROE % for the fiscal year that ended in Jan. 2024 is calculated as

ROE %=Net Income (A: Jan. 2024 )/( (Total Stockholders Equity (A: Jan. 2023 )+Total Stockholders Equity (A: Jan. 2024 ))/ count )
=637.462/( (6206.607+8019.406)/ 2 )
=637.462/7113.0065
=8.96 %

Zoom Video Communications's annualized ROE % for the quarter that ended in Apr. 2024 is calculated as

ROE %=Net Income (Q: Apr. 2024 )/( (Total Stockholders Equity (Q: Jan. 2024 )+Total Stockholders Equity (Q: Apr. 2024 ))/ count )
=865.232/( (8019.406+8298.824)/ 2 )
=865.232/8159.115
=10.60 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

In the calculation of annual ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data, the net income data used here is four times the quarterly (Apr. 2024) net income data. ROE % is displayed in the 30-year financial page.


Zoom Video Communications  (NAS:ZM) ROE % Explanation

ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.

The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:

ROE %(Q: Apr. 2024 )
=Net Income/Total Stockholders Equity
=865.232/8159.115
=(Net Income / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Stockholders Equity)
=(865.232 / 4564.936)*(4564.936 / 10113.2115)*(10113.2115 / 8159.115)
=Net Margin %*Asset Turnover*Equity Multiplier
=18.95 %*0.4514*1.2395
=ROA %*Equity Multiplier
=8.55 %*1.2395
=10.60 %

With this breakdown, it is clear that if a company grows its Net Profit Margin, its Asset Turnover, or its Leverage, it can grow its ROE %.

The factors that affect a company's ROE % can also be illustrated with the five-step DuPont Analysis:

ROE %(Q: Apr. 2024 )
=Net Income/Total Stockholders Equity
=865.232/8159.115
=(Net Income / Pre-Tax Income) * (Pre-Tax Income / Operating Income) * (Operating Income / Revenue) * (Revenue / Total Assets) * (Total Assets / Total Stockholders Equity)
= (865.232 / 1167.856) * (1167.856 / 812.088) * (812.088 / 4564.936) * (4564.936 / 10113.2115) * (10113.2115 / 8159.115)
= Tax Burden * Interest Burden * Operating Margin % * Asset Turnover * Equity Multiplier
= 0.7409 * 1.4381 * 17.79 % * 0.4514 * 1.2395
=10.60 %

Note: The net income data used here is four times the quarterly (Apr. 2024) net income data. The Revenue data used here is four times the quarterly (Apr. 2024) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Net Income is used.

Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.


Zoom Video Communications ROE % Related Terms

Thank you for viewing the detailed overview of Zoom Video Communications's ROE % provided by GuruFocus.com. Please click on the following links to see related term pages.


Zoom Video Communications (Zoom Video Communications) Business Description

Address
55 Almaden Boulevard, 6th Floor, San Jose, CA, USA, 95113
Zoom Video Communications provides a communications platform that connects people through video, voice, chat, and content sharing. The company's cloud-native platform enables face-to-face video and connects users across various devices and locations in a single meeting. Zoom, which was founded in 2011 and is headquartered in San Jose, California, serves companies of all sizes from all industries around the world.
Executives
Aparna Bawa officer: General Counsel C/O ZOOM VIDEO COMMUNICATIONS, INC., 55 ALMADEN BOULEVARD, 6TH FLOOR, SAN JOSE CA 95113
Shane Crehan officer: Chief Accounting Officer C/O EVENTBRITE, INC., 155 5TH STREET, 7TH FLOOR, SAN FRANCISCO CA 94103
Velchamy Sankarlingam officer: Pres. of Engineering & Product C/O ZOOM VIDEO COMMUNICATIONS, INC., 55 ALMADEN BOULEVARD, 6TH FLOOR, SAN JOSE CA 95113
Eric S. Yuan director, 10 percent owner, officer: Chief Executive Officer C/O ZOOM VIDEO COMMUNICATIONS, INC., 55 ALMADEN BOULEVARD, 6TH FLOOR, SAN JOSE CA 95113
Santiago Subotovsky director C/O EMERGENCE CAPITAL PARTNERS, 160 BOVENT ROAD SUITE 300, SAN MATEO CA 94402
Kelly Steckelberg officer: Chief Financial Officer C/O ZOOM VIDEO COMMUNICATIONS, INC., 55 ALMADEN BOULEVARD, 6TH FLOOR, SAN JOSE CA 95113
Jonathan Chadwick director 3401 HILLVIEW AVENUE, PALO ALTO CA 94304
Gregory Tomb officer: President 650 CASTRO ST, SUITE 400, MOUNTAIN VIEW CA 94041
Cindy L Hoots director C/O ZOOM VIDEO COMMUNICATIONS, INC, 55 ALMADEN BOULEVARD, 6TH FLOOR, SAN JOSE CA 95113
William R Mcdermott director 2225 LAWSON LANE, SANTA CLARA CA 95054
Ryan Azus officer: Chief Revenue Officer C/O ZOOM VIDEO COMMUNICATIONS, INC., 55 ALMADEN BOULEVARD, 6TH FLOOR, SAN JOSE CA 95113
Carl M. Eschenbach director, 10 percent owner C/O SEQUOIA CAPITAL, 2800 SAND HILL ROAD, SUITE 101, PALO ALTO CA 94025
Janine Pelosi officer: Chief Marketing Officer C/O ZOOM VIDEO COMMUNICATIONS, INC., 55 ALMADEN BOULEVARD, 6TH FLOOR, SAN JOSE CA 95113
Kimberly Hammonds director 100 EAST DAVIE STREET, RALEIGH NC 27601
Bart Swanson director C/O ZOOM VIDEO COMMUNICATIONS, INC., 55 ALMADEN BOULEVARD, 6TH FLOOR, SAN JOSE CA 95113