Zoom Releases Strong Report, Predicts 42% Revenue Growth

Zoom reported record quarterly revenue and earnings growth, beating Wall Street estimates. Zoom’s first quarter and full fiscal 2022 forecasts are also above expectations.

Zoom Video Communications (ZM) shares rose 8.4% after the close of trading on Monday 1.03. as investors reacted to positive outlooks from the company’s management, which believes in continued business growth after the end of the pandemic.

Zoom’s IPO took place on April 18, 2019. The COVID-19 pandemic has made Zoom’s product incredibly popular and its stock has skyrocketed.

Zoom provides a free 40 minute video calling service with a limited number of members and charges a corporate service fee.

Over the past 12 months, Zoom shares are up more than 290%. The decrease in shares by 7.7% in the last quarter is explained by the emergence of vaccines against COVID-19 and investors’ fears that the return of employees to offices and students to classrooms will reduce the company’s revenues.

However, Zoom’s report on Monday reassured investors as the company gave strong forecasts for the coming quarter and the current fiscal year.

Zoom data for Q4 and FY2021. year

Zoom reported earnings per share for the fourth quarter (ended Jan. 31, 2021) rising to $ 1.22, a far cry from last year’s $ 0.2 earnings per share and $ 0.43 better than analysts’ estimate of $ 0.79.

Net income for the quarter increased to $ 365.4 million from last year’s value of $ 43.2 million.

Zoom revenue continued to grow at a massive rate of more than 355% for the third straight quarter to $ 882.5 million, also above the analyst average of $ 811.77 million. Zoom’s quarterly revenue and earnings statistics for recent quarters are available here.

Zoom’s total revenue for full FY2021 year grew by 326% to $ 2.65 billion, annual earnings per share were $ 3.34 against last year’s value of $ 0.35, and the amount of net profit increased to $ 995.7 million against last year’s $ 101.3 million.

Zoom’s free cash flow at year-end rose to $ 1.4 billion from $ 113.8 million a year earlier. This balance of free funds gives Zoom the ability to invest in new products and purchases from other companies.

Zoom added more customers than analysts expected

Zoom’s key metric is the addition of new users of its video conferencing service; market experts pay special attention to the number of corporate users – how much it has grown and what was the churn rate.

Zoom showed positive dynamics:

  • With more than 10 employees, Zoom’s customer base grew to 467,100, up about 8% from the previous quarter and beating the analyst average of 442,570.

  • The number of Zoom customers who pay a $ 100,000 annual subscription rose to 1,644, while analysts had predicted 1,474 of these large customers.

Zoom forward-looking statements

Zoom Forecast for Q1 FY2022 years (from February to April 2021):

  • revenue growth of about 175% to the range of $ 900 million – $ 905 million, which is higher than analysts’ expectations of $ 829.2 million;

  • EPS of $ 0.95 – $ 0.97 is also above the Wall Street average of $ 0.72.

Forecast for full FY2022 year:

Although this means a growth rate of 42%, which is much less than 326% for FY2021. year, that’s higher than analysts’ average growth estimate of 37% to $ 3.56 billion.

  • Annual earnings per share will rise to $ 3.59 – $ 3.65, analysts predicted $ 2.97.

Zoom Video Founder and Chief Executive Officer Eric S. Yuan said the company is “well positioned to grow strongly” in the coming year.

Zoom is committed to creating more revenue streams by adding products such as the cloud phone system to attract more large businesses as well as small and medium-sized businesses.

Zoom last October announced the OnZoom online event service and Zapps product for integrating third-party applications, and earlier in July launched sales of dedicated video conferencing monitors.

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