- Revenue and profit beat consensus
- Full-year guidance raised
- AI features gain traction with enterprise customers
Video conferencing platform Zoom Video Communications (ZM:NASDAQ) saw its shares jump as much as 8% in after-market trading on Monday 21 August after the firm beat second-quarter estimates and raised its full-year profit guidance.
The stronger-than-expected outlook suggests the San Jose, California-based firm is overcoming a post-pandemic slump in trading by offering a wider range of collaboration tools.
Video conferencing platforms including Microsoft’s (MSFT:NASDAQ) Teams and Cisco’s (CSCO:NASDAQ) Webex became household names during the pandemic as businesses and individuals relied on them to connect with employees and friends.
WHAT IS THE NEW GUIDANCE?
Management has raised guidance for full-year EPS (earnings per share) to between $4.63 and $4.67 on expected revenue of $4.48 billion to $4.49 billion equating to an 8% and 0.3% upgrade respectively compared with three months ago.
Chief financial officer Kelly Steckelberg said increased guidance ‘reflects a consistent view on enterprise, with tempered expectations for online for the remainder of the year’.
Founder and chief executive Eric Yuan said: ‘Our mission of delivering limitless human connection remains core as we continue to innovate and expand our platform to help bring value and enhanced productivity to our customers with new AI features like Zoom IQ Meeting Summary and Team Chat Compose, as well as Intelligent Director.’
Yuan said the company doesn’t plan to charge a ‘crazy price’ for artificial intelligence features on top of existing software in contrast to some competitors because ‘I do not think that is fair to customers.’
SECOND-QUARTER BEAT
Revenue for the three months to 31 July increased 4% year-on-year to $1.14 billion, beating Wall Street estimates of $1.1 billion, while adjusted EPS came in at $1.34 compared to analyst forecasts of $1.05.
Enterprise revenue grew 10.2% year-over-year to $659.5 million, with the number of customers contributing more than $100,000 of revenue in the prior 12 months jumping 17.8% compared with a year ago, while online revenue dropped 4.3% to $479.2 million.
Citigroup analyst Tyler Radke commented: ‘All said, the second quarter looks better than feared and featured improvements in both the enterprise segment and online. Profitability was well ahead of guidance, consistent with the beat levels seen over the last two quarters.’
