Zoom raises full-year revenue outlook on remote-work boost

Lawrence Kim
June 3, 2020

Excluding items, the company earned 20 cents per share in the latest quarter, beating analysts' estimate of 9 cents.

The company, a big beneficiary of the covid-19 pandemic fallout, nearly doubled its revenue guidance for the fiscal year.

Zoom Video posted a jump in earnings for the first quarter of 2020 driven by higher revenue. Asia-Pacific, which accounts for 9.5% of Zoom's total sales, generated $31.3 million in revenue, more than triple from past year.

The company raised its full-year revenue forecast to a range of $1.78bn to $1.80bn from $905.0m to $915.0m. In contrast, Wall Street had forecast earnings of just 11 cents per share on revenue of $223.8 billion. Analysts surveyed by FactSet had expected sales of $203.5 million and net income of $3.2 million for the quarter ended April 30.

"Navigating this process has been a humbling learning experience", Mr Yuan said on an investor call on Tuesday. "They were crushing it before COVID-19, which has only accelerated growth".

The concerns prompted some schools to stop using Zoom for online classes that have become widespread since February, although the company's efforts to introduce more security protection has brought some back to the service.

In May, Zoom suspended all free service to individual users in China ahead of the annual meeting of the National People's Congress, China's legislature, Nikkei Asian Review previously reported.

In the first quarter a year ago, Zoom reported zero dollars per share in net income for stockholders.

Zoom's stock was down 1.5% in after-hours trading, though it has gained more than 200% since the beginning of the year.

As confirmed by Zoom CEO Eric Yuan, the company will not deploy end-to-end encryption on free video calls, which will make it easier for law enforcement to identify individuals guilty of misusing the platform. Zoom, which didn't even mention the coronavirus during its last earnings call, has suddenly found itself in the position of being one of those few companies that became a verb. Those numbers include people who join multiple Zoom meetings during the same day, something that has been happening more recently in recent months.

Zoom's daily meeting participants have dipped a bit below the blockbuster 300 million figure revealed in April, but Steckelberg said the company expects to consistently surpass that milestone in the future.

When the firm sold its first shares to the public previous year, it was valued at $15.9 billion which went up to more than $58 billion on Tuesday after the results. In the process, the company also gained customerusing it for personal communication. Zoom has also announced a number of new appointments familiar with Washington politics, including H R McMaster, a retired Army general and former national security adviser to Donald Trump.

Other reports by Click Lancashire

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