Zoom earnings soar, doubles revenue forecast as video meetings become pandemic norm

Lawrence Kim
June 3, 2020

There were roughly 265,400 companies with more than 10 employees using its platform, a 354% increase from the year prior.

The company, which sells videoconferencing tools, crushed Wall Street's estimates, reporting a profit before certain costs such as stock compensation of 9 cents per share on revenue of $328.2 million, up 169% from a year ago.

"Use cases have grown rapidly as people integrated Zoom into their work, learning, and personal lives". In addition, he spoke of an "unprecedented number of free participants" that could lead to upselling opportunities later. For the full year, the company gave revenue guidance in the range of $1.78 billion to $1.8 billion, which would be approximately 185% to 189% year-over-year growth. The stock, which ended the day 1.9% higher, was up about 2% in after-hours trading following the earnings report.

"We were humbled by the accelerated adoption of the Zoom platform around the globe", said boss Eric Yuan, who co-founded the company nine years ago.

Today after the bell, video-chat service Zoom reported its Q1 earnings.

The US company has been one of the few winners of the coronavirus crisis, beating rival video calling services from Microsoft, Google and Facebook to become the de facto app for many households and businesses.

"We should have played the role of IT for first-time users". King said. "The massive jump in revenue and earnings isn't hugely surprising, given the word of mouth the company has enjoyed in 2020".

The mass migration of business to work-from-home (WFH) arrangements has supercharged the financial performance of conferencing and collaboration platform Zoom.

While Zoom's business has undoubtedly benefited from greater usage during the pandemic, it's also received unwanted attention. "And we could not have done it without relying on our partners". He also praised Oracle and its CEO Larry Ellison for other cloud-related support.

In operating metrics, it reported 769 customer contributed more than $100K in trailing-12-months revenue (up about 90% Y/Y), and a trailing-12-month net dollar expansion rate in customers with more than 10 employees over 130% for the eighth straight quarter.

A host of security issues emerged in early March, including controversies over the level of encryption it provides and the practice of "Zoombombing" - where trolls interrupt meetings to share profanity or pornography - prompting scrutiny from U.S. authorities and temporary bans from schools in New York City and Singapore.

However, the record quarterly and promising outlook are shadowed by a lower margin due to higher demand from free users.

Steckelberg told analysts Zoom is planning to add more capacity to its data centers.

Other reports by Click Lancashire

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