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Zoom Video Communications Free Cash Flow

: $1,503 Mil (TTM As of Apr. 2022)
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Zoom Video Communications's total free cash flow for the months ended in Apr. 2022 was $498 Mil. Its total free cash flow for the trailing twelve months (TTM) ended in Apr. 2022 was $1,503 Mil.

Zoom Video Communications's Free Cash Flow per Share for the months ended in Apr. 2022 was $1.62. Its free cash flow per share for the trailing twelve months (TTM) ended in Apr. 2022 was $4.91.

During the past 12 months, the average Free Cash Flow per Share Growth Rate of Zoom Video Communications was -7.00% per year. During the past 3 years, the average Free Cash Flow per Share Growth Rate was 294.10% per year. During the past 5 years, the average Free Cash Flow per Share Growth Rate was 256.80% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.

During the past 6 years, Zoom Video Communications's highest 3-Year average Free Cash Flow per Share Growth Rate was 405.40% per year. The lowest was 197.40% per year. And the median was 294.10% per year.


Zoom Video Communications Free Cash Flow Historical Data

The historical data trend for Zoom Video Communications's Free Cash Flow 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 Annual Data
Trend Jan17 Jan18 Jan19 Jan20 Jan21 Jan22
Free Cash Flow
Premium Member Only 9.69 20.88 113.67 1,385.36 1,459.66

Zoom Video Communications Quarterly Data
Jan17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22
Free Cash Flow 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 Premium Member Only Premium Member Only 454.23 455.04 365.16 185.23 497.90

Zoom Video Communications Free Cash Flow Calculation

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

Zoom Video Communications's Free Cash Flow for the fiscal year that ended in Jan. 2022 is calculated as

Free Cash Flow (A: Jan. 2022 )=Cash Flow from Operations+Capital Expenditure
=1605.266+-145.608
=1,460

Zoom Video Communications's Free Cash Flow for the quarter that ended in Apr. 2022 is calculated as

Free Cash Flow (Q: Apr. 2022 )=Cash Flow from Operations+Capital Expenditure
=526.151+-28.249
=498

Free Cash Flow for the trailing twelve months (TTM) ended in Apr. 2022 adds up the quarterly data reported by the company within the most recent 12 months, which was $1,503 Mil.

* 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.


Zoom Video Communications  (NAS:ZM) Free Cash Flow Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Apr22, Zoom Video Communications's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Apr22)=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=0/99.57+0
=0.00 %

* 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

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.


Zoom Video Communications Free Cash Flow Related Terms

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


Zoom Video Communications Business Description

Zoom Video Communications logo
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
Mcdermott William R director C/O UNDER ARMOUR, INC. 1020 HULL STREET, 3RD FLOOR BALTIMORE MD 21230
Subotovsky Santiago director C/O EMERGENCE CAPITAL PARTNERS 160 BOVENT ROAD SUITE 300 SAN MATEO CA 94402
Napolitano Janet director C/O VIR BIOTECHNOLOGY, INC. 499 ILLINOIS STREET, SUITE 500 SAN FRANCISCO CA 94158
Crehan Shane officer: Chief Accounting Officer C/O EVENTBRITE, INC. 155 5TH STREET, 7TH FLOOR SAN FRANCISCO CA 94103
Sankarlingam Velchamy officer: Pres. of Engineering & Product C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Mcmaster Herbert Raymond director C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Leone Douglas M 10 percent owner C/O SEQUOIA CAPITAL 2800 SAND HILL RD, SUITE 101 MENLO PARK CA 94025
Abramson Michael Saul 10 percent owner C/O SEQUOIA CAPITAL 2800 SAND HILL ROAD, SUITE 101 MENLO PARK CA 94025
Azus Ryan officer: Chief Revenue Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Salesforce Com Inc 10 percent owner SALESFORCE TOWER 415 MISSION STREET 3RD FL SAN FRANCISCO CA 94105
Bonus Goal International Ltd 10 percent owner C/O 7/F, CHEUNG KONG CENTER 2 QUEEN'S ROAD CENTRAL HONG KONG K3 00000
Sc Global Growth Ii Management, L.p. 10 percent owner 2800 SAND HILL ROAD, SUITE 101 MENLO PARK CA 94025
Red Porphyry, Llc 10 percent owner 635 KNIGHT WAY STANFORD CA 94305
Qualcomm Inc/de 10 percent owner 5775 MOREHOUSE DR SAN DIEGO CA 92121
Oscar Time Ltd 10 percent owner C/O SUITES PT. 2909 & 2910 HARBOUR CENTRE, 25 HARBOUR ROAD WANCHAI K3 00000

Zoom Video Communications Headlines

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