Zoom reported revenue growth of 169% compared to the previous year in its income statement for the first quarter, and almost doubled the revenue forecast for the full year, as the pandemic coronavirus caused millions of new customers to use the service of video calls.
However, the company’s shares fell 4% after hours as the company incurred higher than expected spending on cloud computing to cope with the surge in demand.
Key performance indicators
Adjusted earnings: 20 cents per share.Revenue: 328,2 million dollars.
Analysts polled Refinitiv, had expected adjusted earnings per share of 9 cents, and revenue for the quarter ended April 30, — 202,7 thousand dollars.
the Company also significantly improved the Outlook for the financial year. Expected adjusted earnings could range from 1.21 to 1.29 dollar of dollar revenues in the range of 1.78 billion to $ 1.80 billion dollars. In March it predicted 42 to 45 cents of the earnings per share and revenue 905 million to $ 915 million.
Needham Analyst Richard Valera called the results “unbelievable” in a statement to CNBC. “Never seen anything like it in 20 years, the lighting technology industry.”
In accordance with previous practice, the company did not disclose the number of active users. However, Bernstein analysts, advising to buy the stock Zoom, has estimated that as of may 27, the mobile app Zoom totaled 173 million active users per month, compared to 14 million on March 4. Experts refer to company data Apptopia engaged in the analysis of applications.
gross margin Zoom decreased to 68.4% compared with 82.7% in the previous quarter and 80.2% in the previous quarter, as the company increased spending on computing power, including Amazon Web Services, to cope with the influx of new users. Large dependence on cloud computing third-party manufacturers has led to increased costs, but it was extremely important for the company to meet the needs of its users, said on Tuesday analysts financial officer Kelly Steckelberg (Kelly Steckelberg) during the conversation with analysts.
“Moving forward, we’re getting more power in our own data centers and expect to get some increase in efficiency, returning a gross margin of around 70% in the next few quarters,” said Stackelberg, adding that the company expects to increase capital expenditures on equipment for data centers.
Zoom paid employees a one-time award in the amount of two weeks wages to help them offset the costs associated with any breaks in work because of the pandemic, said Steckelberg.
as soon as more people flocked to the Zoom, other companies paid attention to it, and people faced with the problems of security and privacy. In early April, Zoom has announced that it will spend the next 90 days to find and solve problems. Also in April, Facebook introduced video sharing feature called Messenger Rooms that can work as an alternative to the free version Zoom. This news adversely affected the stock Zoom.
However, Eric yuan, CEO of Zoom, thinks the competition is beneficial for consumers and not concerned about the rivals.