Zoom pops as company beats expectations and issues strong guidance

Earnings

Eric Yuan, founder and chief executive officer of Zoom Video Communications Inc., center, reacts while ringing the opening bell during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, U.S., on Thursday, April 18, 2019. Zoom reported net income of $7.6 million on revenue of $331 million for the year ended January, and is now worth nine times the $1 billion valuation it secured after a funding round two years ago.

Victor J. Blue | Bloomberg | Getty Images

Zoom shares rose as much as 11% in extended trading on Monday after the video-calling software maker reported fiscal fourth-quarter earnings that were stronger than analysts had expected.

Here’s how the company did:

  • Earnings: $1.22 per share, adjusted, vs. 79 cents per share as expected by analysts, according to Refinitiv.
  • Revenue: $882.5 million, vs. $811.8 million as expected by analysts, according to Refinitiv.

Revenue grew 369% year over year in the quarter that ended on Jan. 31, according to a statement. In the year-ago quarter people began to use Zoom more heavily as the Covid-19 virus emerged in China, leading to the World Health Organization calling the virus a pandemic in March 2020. In the previous quarter revenue had grown some 367%.

Zoom expanded its gross margin to 69.7% from 66.7% in the prior quarter. And the company also posted gains among small customers. Zoom said it had 467,100 customers with over 10 employees at the end of the fiscal fourth quarter, up 470% on an annualized basis, compared with 354% growth in the previous quarter. The company ended the quarter with $4.24 billion in cash, cash equivalents and marketable securities, up .

During the fiscal fourth quarter Zoom said it had accumulated more than 1 million seats paying for Zoom Phone, a service that allows people to virtually make and receive phone calls, route calls and accept voicemail.

With respect to guidance, for the fiscal first quarter Zoom sees 95 cents to 97 cents in adjusted earnings per share on $900 million and $905 million in revenue, which would imply 175% revenue growth at the middle of the range. Analysts surveyed by Refinitiv had expected 72 cents in adjusted earnings per share on $829.2 million in revenue.

For the full 2022 fiscal year, Zoom called for adjusted earnings of $3.59 and $3.65 per share and $3.76 billion and $3.78 billion million in revenue, which would represent 42% growth. Analysts polled by Refinitiv had been looking for $2.96 in adjusted earnings per share and $3.56 billion in revenue.

Excluding the after-hours move, Zoom stock has risen 22% since the start of the year, while the S&P 500 is up less than 4% over the same period.

Executives will discuss the results with analysts on a Zoom video call that starts at 5 p.m. Eastern time.

This is breaking news. Please check back for updates.

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