Zoom earnings beat expectations, stock soars 18% after hours

·Technology Editor
·3 min read

Video conferencing giant Zoom (ZM) reported quarterly earnings on Monday, beating analysts' expectations and revising its full-year guidance. Shares of the company soared as high as 18% in after-hours trading, after getting pounded this year.

Here are the most important numbers from the report compared to what analysts were expecting in the quarter, as compiled by Bloomberg.

  • Revenue: $1.07 billion versus $1.07 billion expected

  • Adjusted EPS: $1.03 versus $0.87 expected

  • Customers paying more than $100K in last 12 months: 2,916 versus 2,958 expected

Zoom revised its full year adjusted earnings per share to between $3.70 and $3.77 from $3.45 to $3.51. Zoom also reported that it now has approximately 198,900 enterprise customers, up 24% year-over-year.

Shares of Zoom were up more than 18% after the report.

Zoom was a stay-at-home darling during the onset of the pandemic with revenue growth exploding quarter-over-quarter as businesses, schools, and governments took to remote video chats to keep employees, students, and constituents connected.

In June 2019, the company reported Q1 revenue of $122 million, a year-over-year jump of 103%. By June 2020, Q1 revenue rose 169% and by March 2021, Q4 revenue was up 369%. But that incredible growth has cooled significantly.

In June 2021, the company reported Q1 growth of 191% year-over-year, with revenue totaling $956 million. In Q2, growth fell to 54%, then to 35% in Q3, and to 21% in Q4. Revenue, however, reached $1.07 billion.

Zoom’s stock price has followed that slowdown, falling from a high of $691.69 a share on Nov. 17 2021 to $89.87 at the opening of markets in New York on Monday.

Zoom has been expanding its offerings into new categories beyond video chat including a customer contact center business that rolls video, voice, SMS, and chat into a single platform. But Piper Sandler senior research analyst James Fish says that’s not going to push the company too much anytime soon.

“There isn’t a whole lot of excitement at this point,” Fish told Yahoo Finance. “Contact center could be that exciting thing, but when you look at the contact center market, that can take a year or so for some of those deals to work their way through the pipeline.”

What’s more, Fish doesn’t see much potential for growth in the video chat market.

“The fact is, if you’re not on Zoom by now, you won’t be adding it too much in the future,” he said.

Still, Fish did say that Zoom could continue to see double-digit growth in the future. Just don’t expect to see it fire up to that triple-digit growth it saw at the height of the pandemic.

Correction: Zoom had 198,900 enterprise customers. A prior version of this article said it had 198,800 customers.

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