Zoom reports better-than-expected q1 sales and profit

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Zoom reports better-than-expected q1 sales and profit

The software vendor is looking for ways to sustain growth beyond the pandemic boom, according to Bloomberg Video Communications Inc. projected sales and profit for the current quarter that surpassed Wall Street's estimates. Shares increased by about 6% in extended trading.

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Revenue will be as much as $1.12 billion in the period ending July, according to the San Jose, California-based company. According to Bloomberg, analysts estimated $1.11 billion, or a growth of about 9% from a year ago. Including some items, the profit will be as much as 92 cents a share compared to the average estimate of 84 cents. In February, Zoom raised its earnings forecast to as much as $3.77 a share from its February projection of $3.51.

Eric Yuan, Chief Executive Officer, said in the statement that the company's new products are enhancing the customer experience and promoting hybrid work. We believe that these innovative solutions will expand our market opportunity for growth and expansion with customers. Zoom hasn't maintained the triple-digit growth it experienced during the pandemic as offices reopen and competition increases from Microsoft Corp.'s rival video communications platform. Zoom's first-quarter sales increased by 12% to $1.07 billion, the slowest year-over-year growth on record. Some analysts think the selloff has gone too far, despite the fact that the company's shares have plummeted 51% this year as part of a broad decline among software makers.

In a note before the results, Benchmark Co. s Matthew Harrigan said investors overlooked Zoom's potential as a key tool for hybrid workplaces as major industries embrace remote work. Customers service contact centers and analytics are two of the areas that the company is focusing on in its enterprise offerings. The acquisition of Solvvy, a conversational AI startup, has unveiled Zoom IQ, a call analytics tool for sales departments.

The new product launches encapsulate our strategy to expand horizontally and vertically to make sure our customers are getting more out of the platform, Yuan said in a conference call after the results. He also praised customers for Zoom's enterprise phone system, including Humana Inc. Avis Budget Group Inc. and Franklin Covey Co.

The company said that it had 198,900 enterprise customers in the period ended April 30, an increase of 24% from a year earlier, with a net dollar expansion rate of 123%.

On the conference call, Kelly Steckelberg, Chief Financial Officer, told analysts that Zoom expects enterprise customers to make up an increasingly larger share of revenue.

The market wants to see signs that Zoom isn't just a Covid stock, said Tejas Dessai, a research analyst at Global X, which counts Zoom as the top holding of its cloud-focused exchange traded fund. In an interview, Dessai said that they wanted to see increased consumption from larger enterprises, especially those with more than $100 K in annual spending on the platform.

Shares rose by as much as 21% in extended trading before giving back much of the gains. No Thrill of Better Office Wi-Fi

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