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Zoom Video Communications Inc. announced third quarter results on Monday.
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Zoom Video Communications Inc. reported another successful quarter on Monday, as the company’s video conferencing software continued to be a lifeline for users during the COVID-19 pandemic, but stocks fell further late in the year. meeting.
Zoom ZM,
said on Monday that revenues had jumped more than 350% for a second straight quarter, continuing a mind-blowing race – revenues rose 169% in the first full quarter of on-site housing orders in the United States and 355% in the next quarter. Zoom predicted the same would happen in the fourth quarter, projecting over $ 800 million in revenue for the first time after registering less than $ 200 million in the fourth quarter of the weakest year, and increased its annual revenue target to around $ 2.58 billion.
“We plan to strengthen our market position at year-end with an increase in total revenue outlook of approximately $ 2.575 billion to $ 2.580 billion in fiscal 2021, an increase of approximately 314 % year on year, ”said Eric Yuan, CEO of Zoom. said in a statement announcing the results.
Shares, which have already risen more than 580% this year, have fallen more than 5% in after-hours trading.
A constant drop in gross margin may have something to do with this. Zoom’s gross margin fell to 66.7% in the third quarter, from 71% in the previous quarter and more than 80% before the pandemic.
As investors jumped on Zoom this year amid staggering gains, analysts are keeping a close eye on 2021, when COVID-19 vaccines are expected to be available from Pfizer Inc. PFE,
and Moderna Inc. MRNA,
and the impact it may have on Zoom’s growth when Americans eventually return to work.
For now, Zoom continues to thrive through the darker days of the pandemic. The company released third quarter results that beat Wall Street estimates, with net income of $ 198.4 million, or 66 cents per share, compared to net income of one cent per share in the quarter. of the previous year. After adjusting for stock-based compensation and other effects, the company reported earnings of 99 cents per share, down from 9 cents per share a year ago.
Revenue catapulted 367% to $ 777.2 million from $ 166.6 million a year ago. Analysts polled by FactSet expected earnings of 76 cents a share on revenue of $ 694 million.
The revenue growth trajectory is expected to slowly decline over the next two quarters, however, according to analysts polled by Refinitiv. In the current fourth quarter, which ends in January, Zoom’s growth is expected to reach 288%, followed by 116% in the following quarter.
“(T) there are going to be perceptual headwinds with Pfizer’s vaccine,” said Chaim Siegel, an analyst at research firm Elazar Advisors, in a note this month. Siegel lowered his rating on Zoom to buy strong buy.
Yet Zoom remains one of the big winners in technology during the pandemic as millions of Americans use it for video chats, with Alphabet Inc.’s GOOGL,
GOOG,
Google Meet, MSFT of Microsoft Corp.,
Teams and Apple Inc.’s AAPL,
FaceTime.
Zoom shares have soared 603% this year, while the larger S&P 500 SPX index,
climbed 12% in 2020.
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