Zoom Reports Customer Growth in Latest Quarter, Raises Expectation
02 June 2021 - 7:05AM
Dow Jones News
By Maria Armental
Zoom Video Communications Inc. said that its largest customers
by revenue more than doubled from a year earlier, extending what
has been a banner year for the videoconferencing company as people
return to the office.
Zoom, which became a household name during the pandemic, also
raised its expectations for the year. It now expects annual revenue
to reach $3.98 billion to $3.99 billion, up from its earlier view
of $3.76 billion to $3.78 billion.
The California-based company also raised adjusted profit
projections for the year to a range of $4.56 to $4.61 a share from
$3.59 to $3.65 a share.
Zoom started trading in the public markets in 2019 and emerged
as one of the biggest winners from the shift to remote work and
distance education, pitting it against larger rivals like Microsoft
Corp.
The number of paying users has skyrocketed. The number of
customers with more than 10 employees reached about 497,000 in the
latest period, up 87% from the previous year.
Customers who generated more than $100,000 over the past 12
months more than doubled to 1,999.
As of Jan. 31, Zoom had about 467,100 customers with more than
10 employees and about 1,644 customers contributing more than
$100,000 over the previous 12 months.
Overall, Zoom's first-quarter profit reached more than $227
million from about $27 million a year earlier, while revenue was
$956.2 million, up from $328.2 million a year ago.
The results beat Zoom's and Wall Street projections, according
to FactSet.
Zoom has been investing heavily to expand capacity and offered
free accounts to some during the pandemic, like school districts.
That has led to a sharp increase in operating expenses, driven by
sales and marketing costs as Zoom increased hiring.
Chief Executive Officer Eric Yuan has said that while Zoom
initially focused on meeting customers' critical communications and
collaboration needs during the pandemic, as "an engine for the
modern work-from-anywhere environment," it had evolved into a
broader platform offering other services like webinars, chat and
third-party applications.
"Work is no longer a place; it's a space where Zoom serves to
empower your teams to connect and bring their best ideas to life,"
Mr. Yuan said Tuesday, noting that Zoom had opened its technology
portfolio to developers and to businesses to expand their reach
through Zoom Events.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
June 01, 2021 16:55 ET (20:55 GMT)
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