CALIFORNIA: Zoom Video Communications said its third-quarter net profit surged nearly 71.5 percent from the same period last year, driven by an increase in the number of paid customers for the video-conferencing platform.
Net profit surged to $340.3 million, almost $141m more than the third quarter last year, the Nasdaq-listed company said. It was up nearly 7.4 percent on a quarterly basis.
Revenue for the three months ending on October 31 jumped 35.2 percent to more than $1.05 billion, beating analysts’ estimates of $1.02bn, according to Refinitiv.
Zoom shares, which started the year at about $360, closed at $242.3 on Monday after falling more than 3.5 percent. The company increased its revenue outlook for the fourth quarter and the full financial year, with fourth-quarter revenue reaching more than $1.05bn.
For the full year, Zoom estimates revenue of between $4.07bn and $4.08bn – about 52 percent more than its earnings in the past financial year.
Zoom said the key “drivers of total revenue included acquiring new customers and expanding across existing customers”. As of October 31, the company had nearly 512,100 paid customers with more than 10 employees, up by almost 18 percent from the same period last fiscal year.
The company’s Zoom Rooms software posted strong growth as an increased number of businesses adopted a hybrid work model in the post-pandemic era.
The video communications platform has been adopted by businesses, schools, universities and people due to Covid-19-induced movement restrictions and lockdowns. It became an essential service, underpinned by the increasing demand for video conferencing as companies adopted hybrid work models.
The company’s operating cash flow was $394.6m for the third quarter, nearly 4.1 percent less than the same period last year. Total cash and marketable securities stood at $5.4bn on October 31.
In the last quarter, Zoom called off its plans to buy cloud call-center software provider Five9 for $14.7bn. This was expected to be its largest-ever acquisition. Zoom said Five9 did not obtain the requisite stockholder support for the merger agreement.