Zoom Shares rally as the company continues to rally despite the end of the quarantine


Zoom Video Communications rallied after the company posted above-average earnings and earnings and raised its full-year financial outlook. Zoom added approximately 30,000 customers during the quarter, indicating a worldwide shift to a “hybrid workspace” format.

A report from Zoom Video Communications (ZM), released on Tuesday after the close of trading, showed that demand for web conferencing persists around the world, despite the end of quarantine measures and the return of employees to offices.

Zoom shares rose 2% after the close of trading on Tuesday.

Zoom Video reported the following results for the first quarter of fiscal 2022, which ended on April 30, 2021:

  • earnings per share rose to a record $ 1.32 from analysts’ forecast of $ 0.99;

  • profit for the quarter was $ 227.4 million compared to $ 27 million a year ago;

  • revenues rose 191% to $ 956.2 million over the same period in 2020.

Zoom Video quarterly earnings and earnings statistics for the last 2 years are available here.

In the first quarter, 66.5% of Zoom’s revenue came from sales of subscriptions of US users (the share decreased compared to last year’s value of 74.9%), 20.6% – from EMEA users: Europe, the Middle East and Africa (the share increased by up from 15.6% in Q1 2020) and 12.9% from Asia Pacific (APAC) users.

  • In the first quarter, Zoom added 30,000 customers with more than 10 employees. The total number of these Zoom customers has reached 497,000, and they currently account for 63% of the company’s revenues.

  • Customers with 10 or fewer employees also grew, contributing 37% of Zoom’s total revenue.

  • The number of clients generating more than $ 100,000 in revenue in twelve months reached 1999.

Zoom said its Zoom Phone product, which includes cloud-based phone services as well as video calling and other capabilities, had 1.5 million users at the end of April, up from 1 million in January.

Commenting on the company’s report, CFO Kelly Steckelberg told analysts: “This result exceeded our forecast upper limit of $ 905 million (revenue) thanks to strong sales and marketing results and lower-than-expected customer churn.”

Zoom CEO Eric Yuan said, “Zoom helps each client customize their future workflow. Many companies are redesigning the workplace to improve the hybrid work experience. ”

Yuan also announced strong demand for upcoming Zoom Phones.

Earlier in July 2020, Zoom announced the Zoom for Home DTEN ME video conferencing monitor, created in partnership with DTEN. These devices can become new sources of income for the company.

Zoom forecast

Zoom raised its projected total revenue for fiscal 2022 to the range of $ 3.975 billion – $ 3.990 billion, representing an increase of about 50%. At the same time, it is expected that the annual earnings per share will be $ 4.56 – $ 4.61.

In the second quarter, the company projects total revenue of $ 985 to $ 990 million and earnings per share of $ 1.14 to $ 1.15.

However, Zoom faces a tough test to maintain its momentum after incredible growth during the pandemic, given that quarantine restrictions continue to ease in its core markets.

Since the beginning of 2021, Zoom shares are down 2.85% and have lost 30.5% over the past six months.

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