Zoom Video Communications Inc.’s hot streak continued today as the company reported fiscal second-quarter results well ahead of market expectations.
The company, which most of the world now knows sells videoconferencing tools that enable online collaboration, reported a profit before certain costs such as stock compensation of 92 cents per share on revenue of $663.5 million, up 355% from a year ago. Wall Street had the company down for a profit of just 45 cents per share on revenue of $500.45 million.
Zoom’s stock jumped 23% in after-hours trading, with officials attributing its stellar performance to strong tailwinds from the COVID-19 pandemic and the shift to working from home.
“Organizations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere, and connecting anywhere on Zoom’s video-first platform,” Zoom founder and Chief Executive Eric Yuan (pictured) said in a statement.
Yuan said the company’s performance was thanks to its “ability to keep people around the world connected,” including students and workers stuck at home, coupled with its “strong execution.”
Zoom’s user base expanded dramatically, and it ended the quarter with around 370,200 customers with more than 10 employees, up 458% from a year ago. Meanwhile, the number of customers worth more than $100,000 in trailing-12-months revenue came to 998, up 112% from a year ago.
The company highlighted some of its biggest customer deals in the quarter, including the additions of new clients ExxonMobil Corp. and Activision Blizzard Inc., and an expanded deal with existing customer ServiceNow Inc.
Zoom said 81% of its year-over-year revenue growth was due to subscriptions from new customers, while subscriptions provided to existing customers accounted for the rest.
It’s looking likely that the good times will continue for Zoom for the foreseeable future. With no end to the pandemic in sight, Zoom said it sees total revenue of between $685 million and $690 million in the third quarter, with a profit of 73 to 74 cents per share. Wall Street had forecast revenue of just $492.9 million.
The company also raised its outlook for its full fiscal year 2021, saying it expects revenue of between $2.37 billion and $2.39 billion, well up from its earlier guidance of just $1.77 billion.
Analyst Charles King of Pund-IT Inc. said some might attribute Zoom’s success to being in the right place at the right time, but he argued that ideal placement is no guarantee of this. He said it helps to have an easy-to-use interface, a dependable platform and a good support system.
“Overall, Zoom has done a great job of providing for customers at a time when many once-dependable services seem to be shaky, eroding or failing,” King said. “It’s no wonder that businesses and investors have taken a liking to the company.”
Zoom made a few product-related announcements during the quarter, including a new, all-in-one personal collaboration device aimed at the home office called Zoom for Home – DTEN ME, and a new hardware-as-a-service solution that enables enterprises to buy its specialized communications equipment such as Zoom Phone and Zoom Rooms directly from the company. It also said it will make its end-to-end encryption feature available for free users.
Photo: Vitor Oliveira/Flickr
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