(ATF) Video conferencing giant Zoom Video Communications saw its shares soar nearly 10% in March 1 trading after it forecast current-quarter revenue above expectations.
The company expects millions of people to continue using its video-conferencing platform to work remotely and take classes online as working-from-home embeds itself in global culture beyond the coronavirus pandemic.
The Nasdaq-listed Zoom closed at $409.66, up 9.65%. It soared to $444 in after-hours trading, although the stock is well below its $568 peak in October 2020 at the height of the pandemic in the US. The platform reported a strong finish to its fiscal year as revenue and use soared due to the pandemic.
The quarterly earnings report came with a forecast by the company that it will grow 40% in the current year despite the likelihood that vaccines will make remote work and school less of a necessity. The company is banking on Zoom video conferences becoming established venues for jobs, education, and even socialising.
“The fourth quarter marked a strong finish to an unprecedented year for Zoom,” chief executive Eric Yuan said in an earnings release. “We are humbled by our role as a trusted partner and an engine for the modern work-from-anywhere environment.”
MASSIVE REVENUE BOOST
Zoom took in revenue of $882.5 million during the fiscal quarter that ended January 31, in a 369% increase from the same pre-pandemic period a year earlier. Net income in the quarter was $260.4 million compared with $15.3 million in the same period a year earlier.
“These zooming marvellous results demonstrate once again how this Silicon Valley upstart has become the global icon for video conferencing during the pandemic,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, a London brokerage.
“Users once again came flocking to the platform for work, study and play as fresh lockdowns were imposed in many parts of the world.”
Streeter said the company’s forecasts are particularly attention grabbing. “The fact that ‘to zoom’ has become part of our lockdown lexicon is testament to the brand’s strength,” she said.
The company’s outlook suggests concerns about “zoom fatigue” may be overblown, though Streeter added: “It is still unclear how many stay-at-home habits will linger once the world stops relying on virtual meetings for work conferences or social get-togethers.”
With reporting by Agence France-Presse