Zoom’s stock pops 5% on revenue and earnings beat, strong guidance

Zoom Video logs first billion-dollar quarter, but the stock is still falling
Zoom Video logs first billion dollar quarter but the stock is

Zoom Video Communications Inc.’s stock initially popped 5% in extended trading Monday after the videoconferencing-service giant posted revenue, earnings and full-year revenue guidance that edged Street estimates. The stock has since retreated to even. Zoom
reported fiscal third-quarter net income of $340.4 million, or $1.11 a share, compared with net income of $198.4 million, or 66 cents a share, in the year-ago quarter. The company’s adjusted net earnings were $338.4 million, or $1.11 a share.

Net revenue soared 35% to $1.05 billion from $777.2 million a year ago. “Looking forward, we expect to close the year between $4.079 to $4.081 billion in total revenue, representing approximately 54% year-over-year growth, alongside strong profitability and operating cash-flow growth,” Zoom Chief Executive Eric Yuan said in a statement announcing the results. The company said it had surpassed 512,100 customers with more than 10 employees, up 18% from the same quarter a year ago. Analysts surveyed by FactSet had expected net income of $1.09 a share on revenue of $1.02 billion. Analysts are projecting $4.01 billion is fiscal year revenue. Shares of Zoom have declined 28% this year. The S&P 500 index
is up 25% in 2021. Analysts have carefully watched Zoom as it transitions from a pandemic-fueled boom period to an era in which more vaccinated employees are returning to work. While the company’s growth has cooled dramatically in recent months, Zoom executives are confident their technology is here to stay as a permanently technology tool of most enterprises.

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