Zoom CEO Eric Yuan spoke before the Nasdaq opening bell ceremony in New York on April 18, 2019.
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Zoom Shares rose 8% in extended trade on Friday after the video chat company reported fiscal fourth-quarter results that beat analysts’ estimates and gave optimistic earnings guidance for the year.
Here’s how the company does it:
- earnings: $1.22 per share, adjusted, vs. 81 cents as expected by analysts, according to Refinitiv.
- result: $1.12 billion, vs. $1.10 billion as expected by analysts, according to Refinitiv.
Zoom’s revenue rose 4% year over year in the quarter, which ended Jan. 31, according to a statement. This is a dramatic slowdown from the quadrupling revenue Zoom enjoyed in 2020 and 2021, as consumers and businesses flocked to video services during the Covid pandemic.
The company posted its first net loss since 2018 in the quarter, losing $104 million compared to net income of $491 million in the year-ago period. The loss was due to stock-based compensation expense.
Zoom continued to face issues it faced earlier in fiscal 2023 during the quarter, including executives checking carefully before agreeing to pay the company for its services, CEO Eric Yuan told analysts on a conference call.
Some organizations have reduced the number of seats they buy Zoom software as part of a broader cost-cutting drive, said Kelly Steckelberg, the company’s chief financial officer, on a conference call.
Growth will continue to slow this year. Zoom saw between $4.435 billion and $4.455 billion in revenue, representing 1.1% growth, while analysts expected sales of $4.6 billion. The company said adjusted earnings per share would be between $4.11 and $4.18, beating the average estimate of $3.66.
For the fiscal first quarter, adjusted earnings will be 96 cents to 98 cents per share from $1.080 billion to $1.085 billion. Analysts polled by Refinitiv had expected 84 cents in earnings per share and $1.11 billion in revenue.
Excluding the after-hours move, Zoom shares are up 8% for the year, while the S&P 500 has gained 3% over the same period.
During its fiscal fourth quarter, Zoom said it will introduce email and calendar services, along with a virtual agent chatbot to handle customer service inquiries.
Earlier this month Zoom announced it would cut 1,300 employees, representing 15% of its workforce. “As part of our restructuring, we are optimizing our go-to-market strategy to support our enterprise customers and drive additional productivity,” Steckelberg said.
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