Zoom Video Communications Inc. ZM 9.65% said its growth would continue at a rapid pace amid the vaccine rollout, after pandemic lockdowns turned the company into a household name and an investor darling.
The videoconferencing company said Monday that revenue this year would rise more than 41% after more than quadrupling to $2.65 billion in the fiscal year ended in January. The sharp growth during last year repeatedly outpaced Zoom’s own projections, and the latest result beat a forecast issued in November.
Zoom’s share price, which more than tripled over the past 12 months, was ahead nearly 10% in after-hours trading Monday after gaining by a similar margin to finish at $409.66 during the day’s regular session.
The company, which started trading in the public markets in 2019, has been one of the biggest corporate beneficiaries from the shift to remote work and distance schooling, pitting it against larger rivals like Microsoft Corp.
Although Zoom made its name, in part, by giving its services away free to many users during the pandemic, its number of paying users also skyrocketed as large businesses and others tried to connect their workforce and with customers. Zoom ended the year with about 467,100 customers with more than 10 employees, a nearly sixfold increase from a year earlier.
“The future is here with the rise of remote and work from anywhere change. We recognize this new reality, “ Chief Executive Officer Eric Yuan said in an earnings call.
Meanwhile, the company has been adapting its tools to prepare for businesses having some employees returning to the office and others continuing to work remotely. Zoom also launched an effort to make money from its smaller users.
Zoom revenue for the January quarter jumped to $882.5 million from $188.3 million a year earlier. The results beat Wall Street targets and Zoom’s financial projections, driven by the shift to remote work and distance schooling amid the Covid-19 outbreak.
Zoom’s fourth-quarter profit surged to more than $260 million from $15.3 million in the year-prior period. On a per-share basis, profit rose to 87 cents, or $1.22 on an adjusted basis.
Mr. Yuan said Zoom is evolving into a broader platform offering new services beyond just video-conferencing, such as webinars, chat and third-party applications. “We’re not only a video conferencing company anymore.”
Zoom finance chief Kelly Steckelberg said profitability continued to be impacted by the company’s providing its service to more than 125,000 K-12 schools that began the new academic year largely teaching remotely, as well as by cloud costs to facilitate all users.
Costs for the quarter and the full year rose sharply as Zoom expanded capacity to meet growing demand, including from free accounts like school districts.
The company has also faced stricter regulatory and legal scrutiny over access and storage of user data, for example, including its use of servers outside of the U.S.
Zoom ended the year with a profit of $671.5 million on $2.65 billion in revenue, compared with $21.8 million in profit and $622.7 million in revenue a year earlier.
In the current fiscal year, it expects $3.59 to $3.65 a share in adjusted profit and $3.76 billion to $3.78 billion in revenue, ahead of analysts’ projections, according to FactSet.
Zoom is sitting on more than $4 billion in cash. Ms. Steckelberg said the company is open to use some of that money to bulk up. “We are constantly looking for opportunities for other interesting companies, potentially M&A activity that could add either to our talent or our technology,” she said on the earnings call. But, she added, CEO Eric Yuan “has a very high bar for both. And so we just haven’t quite found the right match yet.”
—Aaron Tilley contributed to this article.
Write to Maria Armental at [email protected]
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
