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Jordan Novet | CNBC.Com

Troy Warren for Hometown Hall #business-all

KEY POINTS

– Zoom shares rose 11% in extended trading Monday after the company reported fiscal fourth-quarter earnings.

– Zoom beat on the top and bottom lines, showing sequential revenue growth.

– The company sees 42% revenue growth for the fiscal year ahead, even as life is expected to look more like it did before the pandemic.

Zoom shares rose as much as 11% in extended trading on Monday after the video-calling software maker reported fiscal fourth-quarter earnings and guidance that were stronger than analysts had expected.

Here’s how the company did:

Earnings: $1.22 per share, adjusted, vs. 79 cents per share as expected by analysts, according to Refinitiv

Revenue: $882.5 million, vs. $811.8 million as expected by analysts, according to Refinitiv

Revenue grew 369% year over year in the quarter that ended on Jan. 31, according to a statement. In the year-ago quarter people began to use Zoom more heavily as the Covid-19 virus emerged in China, leading to the World Health Organization calling the virus a pandemic in March 2020. In the previous quarter revenue had grown some 367%.

Zoom expanded its gross margin to 69.7% from 66.7% in the prior quarter. That was primarily connected to seasonal audio usage that declines during the holidays, finance chief Kelly Steckelberg said on a Zoom call with analysts.

The company lost fewer customers than executives had expected, she said. Still, churn rates remain higher than they were before the pandemic, and Zoom expects higher churn rates to persist as people start to travel more, Steckelberg said.

The company also posted gains among small customers. Zoom said it had 467,100 customers with more than 10 employees at the end of the fiscal fourth quarter, up 470% on an annualized basis, compared with 354% growth in the previous quarter. The company ended the quarter with $4.24 billion in cash, cash equivalents and marketable securities, up from $1.87 billion in the previous quarter.

The company is open to buying companies while it has more cash. “We just haven’t quite found the right match yet,” Steckelberg said.

During the fiscal fourth quarter Zoom said it had accumulated more than 1 million seats paying for Zoom Phone, a service that allows people to virtually make and receive phone calls, route calls and accept voice mail.

With respect to guidance, for the fiscal first quarter Zoom sees 95 cents to 97 cents in adjusted earnings per share on $900 million to $905 million in revenue, which would imply 175% revenue growth at the middle of the range. Analysts surveyed by Refinitiv had expected 72 cents in adjusted earnings per share on $829.2 million in revenue.

For the full 2022 fiscal year, Zoom called for adjusted earnings of $3.59 to $3.65 per share and $3.76 billion to $3.78 billion in revenue, which would represent 42% growth. Analysts polled by Refinitiv had been looking for $2.96 in adjusted earnings per share and $3.56 billion in revenue.

About half of business is billed monthly, up from 40% in the past year, Steckelberg said.

Excluding the after-hours move, Zoom stock has risen 22% since the start of the year, while the S&P 500 is up less than 4% over the same period.


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