Zoom forecasts current-quarter profit above estimates on strong enterprise demand
Technology
Shares of the video-conferencing platform rose nearly 4% in trading after the bell
(Reuters) - Zoom Video Communications (ZM.O) forecast third-quarter profit above Wall Street estimates on Monday, a positive sign for the company that has tried to overcome a post-pandemic slowdown by offering a wider range of collaboration tools.
Shares of the video-conferencing platform rose nearly 4% in trading after the bell.
"Solid improvement in earnings outlook on what we assume will be opex (operating expense) efficiencies is driving the stock a notch in response," Needham and Co analyst Ryan Koontz said.
Video conferencing platforms including Zoom, Microsoft's (MSFT.O) Teams and Cisco's (CSCO.O) Webex among others became household names during the pandemic as businesses and individuals turned to them for connecting with employees and friends.
The San Jose, California-based company expects adjusted profit per share between $1.07 and $1.09 for the third quarter, above analysts' average estimate of $1.03, according to Refinitiv data.
Zoom expects third-quarter revenue between $1.115 billion and $1.120 billion for the quarter, compared with analysts' average estimate of $1.13 billion, according to Refinitiv data.
"There are a lot of new products on the table, of which none appear to be major contributors to revenue growth yet," Koontz added.
Revenue for the quarter ended July 31 rose 3.6% to $1.14 billion, above analysts' average expectations of $1.12 billion.
Excluding items, the company posted second-quarter profit of $1.34 per share, compared with target estimate of $1.05.
Second-quarter enterprise revenue of the company rose 10.2% to $659.5 million. It added about 218,100 enterprise customers, an increase of 6.9% from a year earlier.
"Our increased total revenue guidance reflects a consistent view on enterprise," CFO Kelly Steckelberg said.
Zoom raised its annual revenue forecast to between $4.49 billion and $4.50 billion, compared with its earlier forecast of between $4.47 billion and $4.49 billion.
It also raised its annual adjusted profit per share to between $4.63 and $4.67, compared with an earlier projection of between $4.25 and $4.31.
