Eric Yuan, founder and CEO of Zoom Video Communications Inc., center, responds as he rings the opening bell during the company’s initial public offering on the Nasdaq MarketSite in New York, US, on April 18, 2019. Zoom reported net profit of $ 7 .6 million on sales of $ 331 million for the year ended January, and is now worth nine times the value of $ 1 billion it achieved after a round of funding two years ago.
Victor J. Blue | Bloomberg | Getty Images
Zoom shares rose a whopping 11% in expanded trading Monday, after the video calling software maker reported on earnings in the fourth quarter of the fiscal year that were stronger than analysts expected.
This is how the company did it:
- Merits: $ 1.22 a share, adjusted, versus 79 cents a share, as expected by analysts, according to Refinitiv.
- Revenue: $ 882.5 million, versus $ 811.8 million as expected by analysts, according to Refinitiv.
According to a statement, revenue grew 369% year over year in the quarter ended Jan. 31. In the quarter a year ago, people started using Zoom more heavily when the Covid-19 virus surfaced in China, leading the World Health Organization to call the virus a pandemic in March 2020. In the previous quarter, sales had increased by approximately 367%.
Zoom expanded its gross margin from 66.7% in the previous quarter to 69.7%. And the company also made a profit with small customers. Zoom said it had 467,100 customers with more than 10 employees at the end of the fiscal fourth quarter, up 470% year-over-year, compared to growth of 354% in the previous quarter. The company ended the quarter with $ 4.24 billion in cash, cash equivalents and marketable securities, up.
During the fiscal fourth quarter, Zoom said it had collected more than 1 million seats for Zoom Phone, a service that allows people to make and receive virtual calls, route calls and accept voicemail.
As for guidelines, for the fiscal first quarter, Zoom sees 95 cents to 97 cents in adjusted earnings per share at $ 900 million and $ 905 million in revenue, implying 175% revenue growth in the mid-range. Analysts polled by Refinitiv had expected 72 cents in adjusted earnings per share on $ 829.2 million in revenue.
For the full fiscal year 2022, Zoom called for adjusted earnings of $ 3.59 and $ 3.65 per share and $ 3.76 billion and $ 3.78 billion in revenue, which would represent 42% growth. Analysts polled by Refinitiv were looking for $ 2.96 in adjusted earnings per share and $ 3.56 billion in revenue.
Excluding the out-of-hours move, the Zoom share is up 22% since the start of the year, while the S&P 500 is up less than 4% over the same period.
Executives will discuss the results with analysts during a Zoom video call starting at 5:00 p.m. Eastern Time.
This is the latest news. Please check again for updates.
WATCH: Since Nasdaq 100 falls for the sixth day in a row, traders are calling their top purchases at a discount