Zoom Video Communications Inc. ZM -1.15% said that its largest customers by revenue more than doubled from a year earlier, extending what has been a banner year for the videoconferencing company as people return to the office.
Zoom, which became a household name during the pandemic, also raised its expectations for the year. It now expects annual revenue to reach $3.98 billion to $3.99 billion, up from its earlier view of $3.76 billion to $3.78 billion.
The California-based company also raised adjusted profit projections for the year to a range of $4.56 to $4.61 a share from $3.59 to $3.65 a share.
Zoom started trading in the public markets in 2019 and emerged as one of the biggest winners from the shift to remote work and distance education, pitting it against larger rivals like Microsoft Corp. MSFT -0.91%
The number of paying users has skyrocketed. The number of customers with more than 10 employees reached about 497,000 in the latest period, up 87% from the previous year.
Customers who generated more than $100,000 over the past 12 months more than doubled to 1,999.
As of Jan. 31, Zoom had about 467,100 customers with more than 10 employees and about 1,644 customers contributing more than $100,000 over the previous 12 months.
Overall, Zoom’s first-quarter profit reached more than $227 million from about $27 million a year earlier, while revenue was $956.2 million, up from $328.2 million a year ago.
The results beat Zoom’s and Wall Street projections, according to FactSet.
Zoom has been investing heavily to expand capacity and offered free accounts to some during the pandemic, like school districts. That has led to a sharp increase in operating expenses, driven by sales and marketing costs as Zoom increased hiring.
Chief Executive Officer Eric Yuan has said that while Zoom initially focused on meeting customers’ critical communications and collaboration needs during the pandemic, as “an engine for the modern work-from-anywhere environment,” it had evolved into a broader platform offering other services like webinars, chat and third-party applications.
“Work is no longer a place; it’s a space where Zoom serves to empower your teams to connect and bring their best ideas to life,” Mr. Yuan said Tuesday, noting that Zoom had opened its technology portfolio to developers and to businesses to expand their reach through Zoom Events.
Zoom’s Popularity Soars in the Pandemic
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Write to Maria Armental at [email protected]
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