Zoom (ZM) Q3 2021 Results

Zoom Video Communications shares fell about 5% in extended trading on Monday after the company reported third-quarter tax results and quarterly forecasts that beat analysts’ expectations. Investors appeared disappointed that the rate of income growth, which has accelerated this year, could moderate.

Here’s how the company did it:

• Earnings: 99 cents per share, adjusted, compared to 76 cents per share as expected by analysts, according to Refinitiv.
• Returned: $ 777.2 million, compared to $ 694.0 million as expected by analysts, according to Refinitiv.

With the coronavirus pandemic continuing to push people to Zoom for work, school and family reunions, Zoom’s revenue grew 367% on an annualized basis during the quarter, which ended on October 31, according to a press release. In the previous quarter, revenue increased 355%, and in the previous quarter, revenue had increased 169%. More than 80% of the revenue gain for the third fiscal quarter comes from subscriptions from new customers.

Zoom’s gross margin fell to 66.7% from 67.3% in the previous quarter. During the quarter, Zoom processed more free users, including students and teachers who logged in when school resumed. This impacted gross margin, as did Zoom’s higher-than-usual reliance on public cloud resources, Kelly Steckelberg, the company’s chief financial officer, is expected to tell analysts during a Zoom webcast.

Zoom said in the quarter it had around 433,700 customers with more than 10 employees, up 485% year-over-year, up 355% from the previous quarter.

During the quarter, Zoom said its Zoom Phone cloud-based telephony service has expanded to more than 40 countries and territories, and that Zoom will come to smart devices made by Amazon, Facebook and Google. The company also announced OnZoom, a tool for hosting live virtual events that people can attend for a fee.

Zoom called for adjusted fiscal fourth quarter earnings of 77 cents to 79 cents per share on $ 806 million to $ 811 million in revenue, implying 329% revenue growth in the middle of the range. Analysts polled by Refinitiv had expected 66 cents in adjusted earnings per share and revenue of $ 730.1 million.

Excluding the after-hour movement, Zoom stock is up 591% year-to-date, while the S&P 500 index is up around 12% over the same period.

Executives will discuss the results with analysts during a Zoom webcast starting at 5:30 p.m. EST.

This is the latest news. Please come back for updates.

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