Zoom raises full-year profit forecast, shares surge

Zoom Video Communications Inc raised its full-year adjusted profit forecast on Monday, betting on robust demand from large businesses in a hybrid work environment, sending shares of the company up 15 per cent in extended trading.

The company said that revenue generated by Zoom's high-paying enterprise customers jumped by 31 per cent in the first quarter, representing 52 per cent of its total revenue.

Chief Financial Officer Kelly Steckelberg said in a post-earnings call that they expect revenue from enterprise customers to become an increasingly higher percentage of total revenue over time.

The adjusted operating margin went up 37.2 per cent in the quarter ended April 30 as efforts to expand its enterprise offerings to customer service contact centers, cloud calling and analytics companies paid off.

Zoom has recently announced the acquisition of Solvvy, an AI startup, and launched Zoom IQ, a call analytics tool for sales departments.

For the full year, Zoom forecast adjusted profit per share to be between $3.70 and $3.77, compared to earlier expectations of $3.45 and $3.51.

Revenue went up 12 per cent to $1.07 billion in the first quarter, the company's slowest growth on record.

Demand for the platform had slowed over the past few quarters as COVID 19 lockdowns slowed and competition intensified from Microsoft's Teams and Cisco's WebEx and Google's Meet.

The San-Francisco based firm reported first-quarter profit that beat expectations and forecast earnings for the current quarter above estimates.

Shares of Zoom, a pandemic darling, have fallen 85 per cent since they touched a new record high in 2020.