Fourth-quarter results exceed expectations, causing Zoom shares to jump
Video conferencing company Zoom saw its shares climb 8% in extended trading on Monday. After reporting better-than-expected Q4 results and offering an optimistic earnings guidance for the year.
The company reported earnings of $1.22 per share, adjusted, exceeding the estimated 81 cents per share. While its revenue of $1.12 billion also exceeded the expected $1.10 billion, according to Refinitiv. The company experienced a 4% YoY increase in revenue in the quarter. Which ended on 31 January, which marks a significant slowdown compared to the quadrupling of revenue Zoom experienced in 2020 and 2021 due to the COVID-19 pandemic.
Despite the impressive earnings report, Zoom had its first net loss since 2018 in the quarter. Losing $104 million compared to a net income of about $491 million in the year-ago period due to stock-based compensation costs. CEO Eric Yuan said that Zoom continued to face issues encountered earlier in the 2023 fiscal year during the quarter. Including executives looking carefully before agreeing to pay the company for services.
Despite a slowdown in growth, Zoom remains optimistic, with adjust earnings per share expect to be between $4.11 and $4.18, topping the $3.66 average estimate.
For the fiscal first quarter, adjusted earnings are expect to be 96 cents to 98 cents per share on revenue of $1.080 billion to $1.085 billion.
Analysts surveyed by Refinitiv had expected 84 cents in adjusted earnings per share and $1.11 billion in revenue. The company also plans to introduce email and calendar services and a virtual agent chatbot for handling customer service inquiries.
Earlier this month, Zoom announced that it would cut 1,300 employees, representing 15% of its workforce. Kelly Steckelberg, the finance chief, said that the company was restructuring. And optimizing its go-to-market strategy to support enterprise customers better and drive additional productivity.
While some organizations have decreased the seats for which they buy Zoom’s software as part of broader expense pullbacks. The company’s optimistic earnings guidance for the year and continued efforts to expand. Its services could help drive growth and recovery.