Zoom gives upbeat sales forecast; Big client adds fall short
BNN Bloomberg
Zoom gave a quarterly sales forecast that topped analysts’ estimates, signaling its video-conferencing platform is still in demand even as offices and schools reopen.
Zoom Video Communications Inc. gave a quarterly sales forecast that topped analysts’ estimates, signaling its video-conferencing platform is still in demand even as offices and schools reopen.
Revenue will be about US$1.05 billion in the current period, the San Jose, California-based company said Monday in a statement. Analysts had expected fiscal fourth-quarter revenue of US$1.02 billion, according to data compiled by Bloomberg.
Zoom’s third-quarter revenue and profit also exceeded projections, yet concerns are lingering about a slowdown in the number of large clients signing on to use the platform -- a metric that fell short. Investors have been closely monitoring Zoom to see whether its online meeting platform, which became a ubiquitous tool throughout the pandemic, remains widely used with many in-person activities resuming and as the company faces rising competition from companies like Microsoft Corp. and Alphabet Inc.’s Google.
Zoom’s shares have slumped almost 30 per cent this year as investors shifted away from pandemic boom stocks. That decline caused Zoom’s planned US$14.7 billion merger agreement with call-center software vendor Five9 Inc. to fall through in September, cutting off another avenue for growth for Zoom.
In the three months ended in October, sales rose 35 per cent to US$1.05 billion, compared with analysts’ average estimate of US$1.02 billion. Profit, excluding some items, was US$1.11 a share, also beating projections. Net income was US$340.3 million, or US$1.11 per share, compared with US$198.4 million, or 66 cents in the year-ago period.
Zoom said it added 512,100 customers with more than 10 employees in the third quarter, an increase of 18 per cent, missing estimates of 516,174 additions. Gains in this closely watched measure have been narrowing. Last quarter, Zoom also missed predictions for large customer additions, which increased 36 per cent from a year earlier. The quarter before that, Zoom’s big-customer additions jumped 87 per cent.
