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Zoom reports earnings Monday. (Photo by Edward Smith / Getty Images)
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Zoom video communications
shares fell in the extended session on Monday after the company reported more than $ 1 billion in quarterly revenue, exceeding analysts ’expectations. But the company’s third-quarter earnings guidelines didn’t impress Wall Street.
Shares of Zoom (ticker: ZM) fell 10% on Monday in out-of-hours trading.
Zoom Video reported second-quarter net income of $ 316.9 million, up $ 1.04 per share, compared to $ 185.6 million (63 cents per share) for the year previous. Adjusted for stock compensation, among other things, profits were $ 1.36 per share. Revenue rose 54% to $ 1.02 billion.
Analysts had expected adjusted earnings of $ 1.16 for revenue of $ 991.2 million.
In a conference call, CFO Kelly Steckelberg said the results marked Zoom’s first quarter of a billion dollars, but that the company’s growth would begin to normalize, “especially when compared to year-on-year compendiums. unprecedented “.
Steckelberg said the company ended the quarter with about half a million customers with more than 10 employees, accounting for 64 percent of revenue.
Zoom said it expects adjusted third-quarter earnings of $ 1.07 to $ 1.08 per share and revenue of about $ 1.02 billion; analysts expected non-GAAP profits of $ 1.10 per share on revenue of $ 1.02 billion.
Throughout the year, Zoom anticipates earnings of $ 4.75 and $ 4.79 per share in revenue of $ 4.01 million to $ 4.02 million. Analysts had modeled adjusted earnings of $ 4.68 per share and revenue of $ 4.01 billion. Throughout the year, analysts expect revenue growth to slow to 51% from the previous year’s 326%.
Steckelberg said the company’s forecast assumes that online sales will be a headwind in the coming quarters, as “smaller customers will adapt to the evolving environment” caused by the pandemic. A significant portion of the company’s business is billed monthly and purchased online.
As the winner of the pandemic, Zoom is in an interesting place. Some actions of staying at home have come to difficult times because what they offer is not necessary in a world that is reopening.
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(CPB) has fallen below its pandemic low because no one is hoarding food anymore and costs are rising
Platoon
(PTON) fell on Friday, in part because gyms now offer a viable alternative. But life has not fully returned to normal and many people continue to work from home, which means Zoom has more time to turn them into permanent customers.
One thing investors will see, writes RBC analyst Rishi Jaluria, is the amount of “upset” in Zoom’s accounts. “Management has consistently communicated expectations of higher-than-historic disorders among customers added to the pandemic,” he explains. “So far, the mix has been below expectations.” Zoom is Jaluria’s best option, with a target price of $ 450, 31% higher than its recent bargain price.
Zoom closed regular trading Monday with a 2% gain to $ 347.50. Shares have advanced 3% this year; the S&P 500 index rises 20%.
Write to Ben Levisohn at [email protected]