Wall Street may be predicting that workers will become less dependent on Zoom calls as Covid-19 vaccines are launched, but the start of the video conference still performed surprisingly strong in the last quarter and predicted faster growth next year. .
The news caused Zoom’s shares to rise up to 10 percent in the post-market trading session on Monday, valuing the company at $ 131 billion. This is still more than 20 percent below the peak in October, before investors began to think about loosening restrictions on the pandemic.
Eric Yuan, chief executive, said that Zoom was racing to diversify to capitalize on the huge audience attracted by its videoconferencing service last year. In a call with Wall Street analysts, he said that Zoom was moving away from “an application killer company to a platform company”, supporting a wider range of communication services.
“I think becoming a platform company will be a great opportunity for us,” said Yuan. “We are no longer just a videoconferencing company.”
In the last quarter, however, his luck depended heavily on the app that made him a household name. Revenues soared to $ 883 million in the three months to the end of January, from $ 188 million the previous year, and 9 percent above most analysts’ expectations. The company said it had 467,100 customers with more than 10 employees, almost five times more than before the pandemic.
Despite predictions that its service would play a less central role in the lives of many workers and students in 2021, Zoom said it expects next year’s revenue to grow by up to 43 percent to $ 3.76 billion – $ 3.78 billion, compared to Wall Street projects about $ 3.5 billion.
One factor that drove growth was the stabilization of the customer turnover rate, which increased rapidly in the past year as many smaller customers were attracted to the service. Kelly Steckelberg, chief financial officer, said the pace at which users return to offices is a factor that makes it difficult to predict customer turnover in 2021, although she added that the company expects it to remain at current levels.
Zoom’s pro forma earnings per share – earned after deducting stock compensation expenses – rose to $ 1.22 from 15 cents the previous year, and were 43 cents above expectations. Based on formal accounting rules, Zoom’s net income increased from $ 15 million to $ 260 million, or 87 cents per share.
He also predicted a pro forma earnings per share for his current fiscal year between $ 3.59 and $ 3.65, higher than the $ 2.96 that stock analysts had booked.
Daily Bulletin
© Financial Times
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