Zoom (ZM) earnings Q4 2020

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Eric Yuan, CEO, Zoom Video Communications

Source: CNBC

Shares of videoconferencing software company Zoom dropped as much as 10% after-hours on Wednesday, even though the company reported fiscal fourth-quarter earnings and guidance that exceeded analysts’ expectations.

Zoom had been on a tear during the coronavirus outbreak, as companies turned to remote work — the stock was up more than 70% for the year, not including the move that followed the release.

Here’s how the company did:

  • Earnings: 15 cents per share, adjusted, vs. 7 cents per share as expected by analysts polled by Refinitiv.
  • Revenue: $188.3 million, vs. $176.6 million as expected by analysts polled by Refinitiv.

Zoom’s revenue growth increased sequentially. Revenue grew 88% on an annualized basis in the quarter, which ended on January 31, according to a statement. In the prior quarter revenue growth topped 85%.

There were 641 customers paying Zoom over $100,000 in the trailing 12 months at the end of the quarter, up 86% year over year. The growth rate one quarter earlier was 97%. At the end of the quarter Zoom had 81,900 customers with over 10 employees, up 61% year over year. In the prior quarter that growth rate had been 67%.

In February CEO Eric Yuan said Zoom had been seeing record usage, with some companies asking workers to meet remotely to prevent further impact from the coronavirus. 

An hours-long outage affecting Microsoft’s Teams collaboration app, which supports voice and video calls, “likely shifted more use to Zoom for video meetings,” Piper Sandler analyst James Fish, who has a neutral rating on Zoom stock, wrote in a note distributed to clients on February 3.

During the quarter, Zoom said its marketplace of third-party services had exceeded 200 products.

In terms of guidance, Zoom is calling for fiscal first-quarter adjusted earnings of 10 cents per share and $199 million to $201 million Analysts polled by Refinitiv had expected 6 cents in adjusted earnings per share and $185.7 million in revenue.

For the full 2021 fiscal year, Zoom’s forecast was 42 cents to 45 cents in adjusted earnings per share on $905 million to $915 million in revenue. Analysts polled by Refinitiv had expected 30 cents in adjusted earnings per share and $868.4 million in revenue.

Executives will discuss the results with analysts on a Zoom video call scheduled for 5:30 p.m. Eastern time.

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WATCH: Zoom Video CEO says products seeing ‘record usage’

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