Zoom Q4 2021 Earnings Surge

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Zoom Video Communications (ZM)’s fourth-quarter results easily surpassed consensus estimates at the beginning of this year after market closed on Monday, Bloomberg said.

Shares surged more than 10% in after-hours trading, adding to a gain of more than 9.6% during the regular trading day.

Here were the main results from Zoom’s report, compared to consensus estimates compiled by Bloomberg and the company’s results in the same period last year:

  • Revenue:$882.5 million vs. $811.04 million expected versus $188.25 million year-over-year
  • Adjusted earnings per share:$1.22 vs. 79 cents expected versus 15 cents year-over-year

In its fiscal fourth quarter, Zoom benefited from an extension of 2020’s social distancing behaviors. A spike in coronavirus cases around the holidays spurred renewed business restrictions and made many workplaces wary to reopen too soon in 2021, helping support the ongoing use of Zoom’s services.

Sales rose by 369% to $882.5 million, handily topping estimates for a rise of 331% to $811.04 million in the three months ended in January. This also unexpectedly accelerated from the 367% top-line growth Zoom posted in the third quarter. Customers with more than 10 employees surged 470% to 467,100, also exceeding estimates for a jump to nearly 442,600.

“The fourth quarter marked a strong finish to an unprecedented year for Zoom. In FY2021, we significantly scaled our business to provide critical communications and collaboration services to our customers and the global community in response to the pandemic,” Zoom CEO Eric Yuan said in a statement.

“As we enter FY2022, we believe we are well positioned for strong growth with our innovative video communications platform, on which our customers can build, run, and grow their businesses; our globally recognized brand; and a team ever focused on delivering happiness to our customers.”

Moreover, Zoom said it expected first-quarter revenue to come in between $900 million and $905 million, soaring well above consensus estimates for current-quarter sales of $829.5 million.

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Adjusted earnings for the quarter are anticipated to be between 95 cents and 97 cents a share, versus the 72-cent consensus estimate. For the full year, revenue will likely be $3.76 billion to $3.78 billion, the company added, also easily topping estimates for $3.53 billion.

Zoom’s fourth-quarter results and guidance marked strong upside surprises relative to consensus expectations, which had forecast moderating growth after a meteoric rise in 2020 as the meeting software became the go-to platform for workplaces, friends and families to stay connected and schools to conduct remote learning.

And with workers and students set to return to offices and schools later this year, the specter of an even more marked deceleration has been a key concern, both for Zoom and other stocks comprising 2020’s lucrative work-from-home trade. Zoom’s guidance, however, suggested concerns of an unfettered slowdown may have been overblown.

At the same time, Zoom has also been expanding into new product categories to diversify the business outside of its flagship video conferencing service and offer a more comprehensive suite of workplace software.

Zoom’s two-year-old Zoom Phone cloud-based phone platform reached 1 million seats in January, and expanded its global coverage of the service to 44 countries.

Recent Growth & Outlook

Zoom’s Q4 FY20 sales surged 80% to help lift its full-year revenue by 88%. The lockdowns and remote environment then helped its revenue climb 170% in the first quarter, 355% in Q2, and 367% in Q3.

More specifically, ZM’s customers with more than 10 employees skyrocketed 485% to over 433,000, while its users contributing over $100,000 in trailing 12 months revenue surged 140%. This growth is essential because the company makes money from subscription-based customers, which means it doesn’t really matter if family and friends stop making Zoom calls.

Zacks estimates call for Zoom’s adjusted fourth quarter earnings to jump 420% to $0.78 a share on another 330% stronger sales that would see it pull in $809 million—roughly $185 million more than it did in all of fiscal 2020.

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Overall, the video conferencing firm’s fiscal 2021 earnings are projected to climb 726% from $0.35 a share in the year-ago period to $2.89. Zoom’s FY21 revenue is projected to climb 314% from $623 million to $2.58 billion.

It’s practically impossible to recreate the lockdown-environment tailwinds going forward. Nonetheless, Zoom’s revenue is projected to jump another 37% or $1 billion above our FY21 estimate in fiscal 2022 to reach $3.53 billion. (Yahoo)