Zoom Reports Better-Than-Feared Q1 Results
Zoom Video Communications (ZM:US) reported stronger-than-expected results for its first quarter.
Still, shares of the company fell as much as 7% on Tuesday as the company’s second-quarter forecast failed to quell investor concerns about growth deceleration.
For its first quarter, Zoom Video said its revenue rose 2.9% to $1.11 billion year-over-year, topping the $1.08 billion expected from analysts. Earnings per share were reported at $1.16 on an adjusted basis, easily ahead of the $0.99 that analysts were expecting.
"The Zoom platform is designed to support limitless human connection to empower the modern workday and strengthen customer relationships. Our customers see Zoom as mission-critical in how they collaborate internally and externally across the globe,” said Eric S. Yuan, Zoom Founder and CEO.
“This relationship with our customers helped us to exceed our guidance due to Enterprise growth and stabilizing Online revenue while driving greater efficiencies in our business to deliver strong profitability and free cash flow margin. The solid start to the year has enabled us to raise our outlook for fiscal year 2024 while continuing to invest in innovations such as AI to help make interactions more meaningful and communications more effective.”
Zoom also reported 215,900 enterprise customers at the end of Q1 while the number of customers contributing more than $100,000 in trailing 12 months revenue was 3,580.
For this quarter, Zoom guided for earnings of $1.05 on revenue of $1.11 billion to $1.12 billion, in-line with analyst expectations. For the full year, the company raised its sales forecast to a range of $4.47 billion to 4.49 billion from the prior $4.44 billion - $4.46 billion.
The adjusted EPS is now seen at $4.28, a boost relative to the prior $4.145.
Congress members didn’t trade Zoom shares in 2023. Congressman Ro Khanna was trading the stock in early 2022 while it was still trading around the $100 mark.
On Tuesday, ZM shares were seen trading in the mid $60s.