Zoom Video Communications Inc. reported its first quarter of $ 1 billion on Monday, but the video conferencing company’s prospects sent shares that fell more than 11 percent in off-hours trading.
Zoom ZM,
reported second-quarter net income of $ 316.9 million, or $ 1.04 per share, compared to net income of $ 185.7 million, or 63 cents per share, in the first quarter. previous year. The company’s adjusted net income was $ 1.36 per share. Revenue soared 54%, to $ 1.02 million, from $ 663.5 million the previous year.
Analysts surveyed by FactSet expected an adjusted net profit of $ 1.16 per share on revenue of $ 991 million.
“In the second quarter, we reached the first quarter of $ 1 billion in revenue, while offering strong profitability and cash flow,” Eric Yuan, Zoom’s chief executive officer, said in a statement announcing the results.
However, the upper and expected quarterly results of the upper and lower line were diminished by a lukewarm third-quarter earnings forecast. Zoom gave guidance between $ 1.07 and $ 1.08 on adjusted earnings, while analysts surveyed by FactSet forecast $ 1.10 per share.
While most companies would be ecstatic with 54% sales growth, this is actually Zoom’s smallest year-over-year revenue growth in its recorded history, according to FactSet, which tracks its growth of revenue until April 2018, one year before the company’s initial public offering. The previous low was 77.9% during the quarter ended January 2020, just before the effects of the COVID-19 pandemic reached the world.
Zoom forecasts call for growth to slow further. The top of its target range for the third quarter would reflect year-on-year sales growth of 31.2% compared to the same quarter in 2020.
The changing nature of the pandemic makes it difficult to predict possible winds in the current quarter and beyond, Kelly Steckelberg, Zoom’s chief financial officer, said in a conference call with the analyst last Monday. Some of the challenges are that there are more people socializing and working in person, compared to just video-only interaction, which translates into a slowdown in the online business segment and a higher rate of reduction, he said.
Monday’s earnings and earnings followed a lush note last week from Morgan Stanley analyst Meta Marshall, who raised its Zoom rating to being overweight, having had the same weight since it began cover the shares in May 2019, one month after it was made public. Marshall raised its price target from $ 400 to $ 360.
Read more: Zoom Video shares show up after Morgan Stanley says shares have been too cheap to ignore
This was good news for investors, who had seen the value of their shares plummet by more than 40% since Zoom shares peaked at the closing price of $ 568.34 on October 19. of 2020, in a national wave of remote work.
Zoom shares have risen 3% so far in 2021. The broader S&P 500 index,
has gained 20.6% this year.