Zoom exceeded projections in both revenue and profits, and raised its estimations of its full-year outcomes. During the quarter, Zoom declared that clients can initiate free trials of automated meeting recaps without the requirement of taping calls.
Shares of Zoom surged 8% in after-hours trading on Monday following the announcement of its fiscal second-quarter results, which surpassed analysts' expectations. The video-calling software provider posted $1.34 in adjusted earnings per share which bested the expected $1.05 per share according to Refinitiv. Revenue of $1.14 billion was also slightly higher than expected $1.12 billion. Year-over-year revenue in the quarter ending July 31 saw a 3.6% growth. Net income skyrocketed to $182 million, or 59 cents per share, in the quarter versus the prior year's $45.7 million, or 15 cents per share. Though progress appears to be slowing down from the pre-Covid days when its revenue expanded almost fivefold due to the influx of companies and schools upgrading to premium accounts, Zoom now has 218,100 enterprise customers.
The guidance for the upcoming quarter was only marginally below analyst predictions. Executives projected $1.07 to $1.09 in adjusted earnings per share, on $1.115 to $1.120 billion in revenue; Refinitiv expected $1.03 in adjusted earnings per share and $1.13 billion in revenue. Full-year estimates have been upgraded, with expectations for $4.63 to $4.67 in adjusted earnings per share and $4.485 billion to $4.495 billion in revenue. This reflects a 2% growth at the midpoint of the forecast.
Zoom's Chief Financial Officer Kelly Steckelberg stated that the prolonged sales cycles and customers' careful reviews are attributed to the projections. The company is also actively working to reduce its spending on cloud services, as well as curbing the growth of sales and marketing spend. Zoom added features such as AI-powered call summaries without recordings for customers on free trials, and has invested in artificial intelligence startup Anthropic. CEO Eric Yuan's statement that the company won't be charging additional fees for AI features resonated with customers. The contact center software for customer service saw an impressive growth, boasting over 500 clients, after the failed acquisition of Five9.
Despite a 1% drop in share value year-to-date, the S&P 500 index has risen by 15% in the same period.
Zoom shares rose as much as 8% in after-hours trading on Monday when the video-calling software provider released fiscal second-quarter results that surpassed analysts' expectations. The report showed adjusted earnings per share of $1.34 versus the Refinitiv forecasted $1.05, along with $1.14 billion in revenue, slightly higher than the predicted $1.12 billion. Revenue for the quarter ending July 31 was up by 3.6% year-over-year while net income jumped to $182 million, or 59 cents per share. Despite the notable growth in the pre-Covid days when revenue multiplied almost fivefold due to the uptick in premium accounts, Zoom is now home to 218,100 enterprise customers.
The forecasted figures for the next quarter were slightly under analysts' prospects. Executives predicted $1.07 to $1.09 in adjusted earnings per share, on $1.115 to $1.120 billion in revenue, as compared to Refinitiv's projected $1.03 in adjusted earnings per share and $1.13 billion in revenue. Full-year expectations have also been revised, with Zoom expecting to post $4.63 to $4.67 in adjusted earnings per share and revenue between $4.485 billion and $4.495 billion – a 2% growth at the midpoint.
Zoom has been working to optimize its spending, with Chief Financial Officer Kelly Steckelberg noting the prolonged sales cycles and customers' thorough reviews as reasons for the projections. AI-powered call summaries without recordings were released for customers on free trials, and the company has invested in AI startup Anthropic. CEO Eric Yuan also stated Zoom would not be charging extra fees for additional AI features. Contact center software for customer service saw a large increase as well, now boasting over 500 customers.
The S&P 500 index has risen by 15% year-to-date in spite of Zoom shares being down 1%.
Comments