Zoom boosts sales forecast as pandemic drags on
Video conferencing company Zoom has said annual sales will be even higher than expected as the pandemic drives demand for its software. The California firm said revenue could hit more than $2.5bn (£1.9bn) – more than twice what it forecast in March.
The prediction comes as Zoom, once a niche tech name, has shot to prominence during the pandemic. Millions have turned to the app to socialise with family and friends, teach and meet with colleagues.
Zoom founder and chief executive Eric Yuan said the company was converting more and more businesses to paying customers, as they adapt to “a new world of work from anywhere”. At the end of October, Zoom had nearly 434,000 business customers that had more than 10 employees – up approximately 485% from the same quarter a year ago.
The surge has lifted revenue and profits and sent the firm’s stock soaring. Zoom said sales in the August-October period hit $777m, up 367% year-on-year. Profits were $198.4m in the quarter, compared to $2.2m in the same period a year earlier.
On Monday, the company revised higher its full-year forecast for a third time, telling investors it expected full-year sales of more than $2.5bn, up from $2.37bn it forecast in August. That would compare to just $622.7m in the prior financial year.
Despite the gains, shares in the firm fell in after-hours trade, after Zoom said it expected sales between $806m and $811m in the last three months of its financial year, implying a slight slowdown in the firm’s blockbuster growth rate.
Investors are eager to see how Zoom will fare as coronavirus concerns fade. Zoom chief financial officer Kelly Steckelberg said the firm remained “optimistic on Zoom’s outlook”, but cautioned investors to remember that “the impact and extent of the COVID-19 pandemic and its associated economic concerns remain largely unknown”.
“Our higher outlook for FY21 is based on our current perspective of the business environment,” she said. She said while many smaller businesses and individual users may leave Zoom as life returns to normal, she expected remote working to remain more common than it was.
“Remote work trends are here to stay,” she said on a conference call to discuss the firm’s results.