• Wed. Aug 10th, 2022

Zoom’s Boom Continues In 1Q, Raising Post-Pandemic Hopes

ByMike Paul

Jun 24, 2021

(AP) SAN RAMON, Calif. – Even as the fading epidemic reduces the demand for virtual meetings, Zoom is still flourishing, boosting hopes that the video-conferencing service would be able to maintain its momentum. The zoom nowadays is on hype as its profit is more than ever. The pandemic is complementing on good terms with a large number of users.

In the company’s most recent quarterly results report, issued Tuesday, there were some signals of hope. After the figures were released, Zoom’s shares jumped 3% to $338, up from their previous low.

Zoom CEO Eric Yuan attempted to reassure Wall Street that the San Jose, California-based firm will continue to play a crucial role in a changing environment that would allow people to split their time between home and work. This splitting will be beneficial for the employees in maintaining their work and home balance.

During a Tuesday conference broadcast via the company’s service, Yuan told investors, “Zoom is here to assist each client to calibrate their future working model in their way.” “To improve the hybrid work experience, several organizations are rethinking their workplaces.”

Zoom’s sales and earnings grew at dizzying rates, far above analysts’ expectations. Other evidence, on the other hand, pointed to a corporation that may face further headwinds when the stay-at-home limitations that pushed the video-conferencing service’s popularity over the previous 15 months are lifted.

Zoom completed the February-April quarter with 497,000 clients who employed at least 10 people and had subscribed to the premium version of the service, according to one important metric. That was a rise of 29,900 consumers in that category from the November-January quarter, Zoom’s weakest three-month growth since the outbreak began.

In comparison, during the same period last year, while the pandemic clampdowns were in their early stages, Zoom gained more than 183,000 clients with 10 or more workers. Larger subscribers will be critical to Zoom’s long-term success since they are more likely to sign longer-term contracts than small businesses with a few employees who prefer month-to-month commitments.

According to FactSet Research, Zoom management forecast revenue exceeding analysts’ forecasts for both the current May-July quarter and the whole fiscal year. Zoom now expects annual sales of over $4 billion for the fiscal year ending in January. That would be a 50 percent rise over last year’s income, which quadrupled from the year before.

The uncertainty surrounding Zoom’s prospects in a post-pandemic environment has already led its stock price to drop more than 40% from its October high of over $589. Zoom’s current market capitalization of roughly $100 billion is still more than treble what it was in March 2020, when the World Health Organization proclaimed a global epidemic. Zoom is also generating a lot more money now than it was before the outbreak.

Zoom Video Communications Inc. had a profit of $227 million, or 74 cents per share, in the most recent quarter, up from $27 million the year before. From the same period last year, revenue nearly quadrupled to $956.2 million.

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