Zoom Video Raises Earnings Guidance as it Adjusts to Lower Stay at Home Demand and Inflation

Leading video conferencing software company Zoom Video Communications reported better than expected fiscal first-quarter earnings Monday. $ZM also gave positive guidance which sent the shares sharply higher by more than 19% in after-hours trading. For perspective prior to Monday’s earning’s report, Zoom shares had lost about 85% of their value since peaking in October 2020. The stock has fallen since the stay at home market reverted, the aborted Five9 transaction and the collapse of the manic tech bubble.

Zoom Conference

 Zoom Video Communications Inc NASDAQ: ZM Report Earnings After Close Monday

 $1.03 Beat $0.87 EPS AND $1.07 Billion Matched $1.07 Billion Revenue Forecast

Earnings

Zoom reported fiscal first-quarter earnings of $1.03 per share, ex-items vs. 87 cents per share as expected by analysts, according to Refinitiv. Revenue was $1.07 billion vs $1.07 billion as expected by analysts, according to Refinitiv. ZM has reduced costs as growth decelerates. This is significant as investors are looking for tech companies that can produce earnings as they move into stocks that can better withstand rising inflation and interest rates.

Zoom had five straight quarters of triple-digit revenue growth during the pandemic, Zoom is now reckoning with dramatically slower expansion and a market correction that’s hammered stay-at-home stocks the most. Revenue growth in the period ended April 30, came in at 12%, down from close to 200% in the same quarter a year earlier.

Zoom Video Communications Inc NASDAQ: ZM

Outlook

For the second quarter, Zoom now expects revenue of $1.115 billion to $1.12 billion, representing growth of at least 9.2%. Analysts were looking for growth of 8.7% to $1.1 billion, according to Refinitiv. The company anticipates earnings per share in the range of 90 cents to 92 cents, higher than the 87 cents analysts were estimating.

For the full fiscal year, Zoom expects revenue between $4.53 billion and $4.55 billion, versus the $4.55 billion analysts anticipated. It expects earnings between $3.70 and $3.77 per share, versus $3.53 analysts were expecting, according to Refinitiv.

About Zoom

Zoom has a “frictionless communications platform is the only one that started with video as its foundation, and we have set the standard for innovation ever since. That is why we are an intuitive, scalable, and secure choice for individuals, small businesses, and large enterprises alike.”

Founded in 2011, Zoom is publicly traded (NASDAQ: ZM) and headquartered in San Jose, California. Visit zoom.com and follow @zoom.

Source: Zoom

From The TradersCommunity Research Desk

From The TradersCommunity News Desk