Zoom Video Communications shares rose as much as 40% Tuesday
after the company reported fiscal second-quarter earnings Monday that were
better than analysts had expected and raised its full-year guidance
significantly.
Zoom’s market cap now stands at more than $129 billion, up
from $25 billion a year ago. The company is now larger than IBM and AMD.
Here’s how the company did:
Earnings: 92 cents per share, adjusted, vs. 45 cents per
share as expected by analysts, according to Refinitiv.
Revenue: $663.5 million, vs. $500.5 million as expected by
analysts, according to Refinitiv.
Revenue grew 355% on an annualized basis in the fiscal
second quarter, which ended on July 31, according to a statement. In the prior
quarter Zoom’s revenue grew 169%. New customers’ subscriptions delivered 81% of
the revenue growth, and there was less customer churn than expected, finance
chief Kelly Steckelberg told analysts on a Zoom call.
Zoom’s income neared $186 million, up from just $5.5 million
in the year-ago quarter. Zoom increased its adjusted gross margin to 72.3% from
69.4% one quarter earlier partly because of expanding the capacity of its own
data center equipment.
People became more dependent on Zoom’s video-calling
software for business, educational and personal use during the quarter, after
the coronavirus pandemic led officials to direct people to stay home around the
world, meaning that people could no longer meet in person as before. The
company hired information security and diversity leaders, added Lt. Gen.
Herbert Raymond “H.R.” McMaster to its board, announced plans for research and
development centers in Phoenix and Pittsburgh, and said it acquired secure
messaging start-up Keybase.
Zoom averaged 148.4 million monthly active users in the quarter,
up 4,700% year over year, RBC analysts led by Alex Zukin wrote in a note
distributed to clients on Aug. 17, citing data from app analytics start-up
SensorTower. The analysts have the equivalent of a buy rating on Zoom stock.
Excluding the after-hours move, Zoom shares are up 369%
since the beginning of the year, while the S&P 500 index is up about 9%.
During Monday’s trading session Zoom stock increased almost 9%, while the Dow
Jones Industrial Average and S&P 500 ended the day lower.
With respect to guidance, Zoom sees fiscal third-quarter
earnings of 73 cents to 74 cents per share on an adjusted basis and $685
million to $690 million in revenue. Analysts polled by Refinitiv had been
expecting adjusted earnings of 35 cents per share on $492.9 million in revenue.
Zoom raised its guidance for the full 2021 fiscal year. It
called for $2.40 to $2.47 in adjusted earnings per share and $2.37 billion to
$2.39 billion in revenue, implying 282% annualized revenue growth at the middle
of the range. Consensus among analysts polled by Refinitiv was $1.30 in
adjusted earnings per share and $1.81 billion in revenue. The highest estimates
were $1.60 in adjusted earnings per share and $1.86 billion in revenue. Zoom’s
prior full-year guidance was $1.21 to $1.29 in adjusted earnings per share on
$1.78 billion to $1.80 billion in revenue.
Click here
for the original article.