Zoom is still booming, raising the chances that the video conferencing service will be able to keep up with its pandemic-fueled momentum
San Ramon, Calif. – Zoom is still booming, raising the possibility that the video-conferencing service will be able to keep up its momentum, even as the easing pandemic eases the need for virtual meetings.
The company’s latest quarterly earnings report released on Tuesday showed some signs of optimism. That fueled a slight rally in Zoom’s recent bearish stock.
“We are active in helping to advance the development of hybrid work that allows for greater flexibility, productivity and happiness for both personal and virtual connections,” Yuan said.
Zoom’s revenue and profit continued to grow at a rate that exceeded analysts’ estimates. But other indicators depicted a company that could face more headwinds with the lifting of stay-at-home restrictions that fueled the video-conferencing service’s popularity during the past 15 months.
In a major measure, Zoom ended its February-April quarter with 497,000 customers who employed at least 10 workers and subscribed to the premium version of its service. That category had a gain of 29,900 subscribers from the November-January quarter, Zoom’s smallest increase during the three-month period since 2019.
By comparison, Zoom added more than 183,000 customers with 10 or more employees during the same period last year, when pandemic containment was still in its early stages.
But Zoom management provided a show of confidence by projecting revenue above analysts’ estimates for both the current May-July quarter and its full fiscal year. According to FactSet Research.
For its full year ending next January, Zoom now expects annual revenue of about $4 billion. This would be an increase of about 50% over the previous year, which had quadrupled revenue compared to the previous year.
Uncertainty about Zoom’s prospects in the post-pandemic economy has already pushed its stock price down more than 40% from its peak of about $589 last October. Zoom’s current market value of about $100 billion is still more than triple that before the World Health Organization declared a global pandemic in March 2020.
What’s more, Zoom is making far more money than it was before the pandemic.
Zoom Video Communications Inc. earned $227 million, or 74 cents per share, during its most recent quarter, up from a $27 million profit in the same period last year. Revenue for the period nearly tripled from the same period last year to $956.2 million.
The company’s stock was up 3.2% in after-hours trading after the earnings report was released.