Zoom’s Q3 net profit surges as customer base grows
Zoom Video Communications said its third-quarter net profit surged practically 90 times from the year-earlier period, as income soared on the trunk of a rise in customers as second and third waves of coronavirus infections forced countries to implement further lockdowns or movement restrictions.
Net profit surged to $198.4 million, from $2.2m in the same period a year ago, the Nasdaq-listed company said in a regulatory filing.
Revenue for the 90 days ending October 31 jumped 367 % to $777.2m - defeating analysts' estimates of $694m, according to Refinitiv.
“We remain centered on the communication needs of our customers and communities as they navigate the current environment … and adjust to a new world of work from anywhere using Zoom,” Eric Yuan, the company’s founder and leader, said.
“We aspire to supply the most innovative, secure, reliable and high-quality communications platform to greatly help persons connect, collaborate, build and learn,” he added.
Zoom shares, which started the year at around $69, closed at $478.4 on Monday after falling 5 % in after hours trading.
The business increased its revenue outlook for the fourth quarter and the entire financial year, with fourth quarter revenue to hover between $806m and $811m. For the entire year, Zoom estimates earnings between $2.57 billion and $2.58bn - a lot more than 3 x its financial earnings this past year.
“We be prepared to strengthen our market position as we finish the fiscal year with an elevated total revenue outlook of approximately $2.57bn to $2.58bn … approximately 314 % increase year-over-year,” Mr Yuan said.
The main drivers of earnings growth included acquiring clients and expanding across existing customers, the company said.
By the end of the third quarter, it had practically 433,700 customers with an increase of than 10 employees, almost 485 % up from the same quarter this past year.
The video communications platform has been adopted by businesses, schools, universities and people due to Covid-19-related movement restrictions and lockdowns. The business expects to improve its user base further in the remaining year.
“The most notable line result exceeded the top quality of our guidance range of $690m [for Q3] due to strong sales and marketing execution in both our online and direct businesses, together with lower-than-expected churn,” Kelly Steckelberg, chief financial officer at Zoom, said.
Revenue growth was generally because of subscriptions provided to clients, which accounted for about 81 % of the increase, while subscriptions provided to existing customers accounted for 19 per cent.
“This require was broad-based across products, industry verticals, geographies and customer cohorts,” she added.
Revenue in the Asia-Pacific and Europe, Middle East and Africa grew 629 %, compared with a lot more than 300 per cent growth in the Americas, Ms Steckelberg said.
Zoom increased its research and development spending in the 3rd quarter to $25m, up 80 % year-on-year. R&D was almost 3 per cent of the total income earned through the quarter.
“We are focused on prioritise R&D hiring to operate a vehicle further innovation, expansion and security into our platform,” the company said.
Source: www.thenationalnews.com
