Stock jumps in price
Zoom exceeds expectations
05/24/2022, 00:08
As video conferences become a mass phenomenon in the corona pandemic, Zoom’s sales go through the roof. Growth is now returning to normal. However, the figures for the first quarter are better than analysts had forecast.
The video conferencing service Zoom performed better than expected at the beginning of the year and pleased investors with a positive outlook. For the current business quarter, the company announced revenues of up to 1.12 billion dollars (1.05 billion euros) after the US stock market closed. Zoom slightly exceeded analysts’ forecasts. In addition, the San José-based company significantly raised its profit targets for the year as a whole.
The stock reacted after hours with a jump in price of around 15 percent. However, it had also suffered a lot in the past few months – since the beginning of the year the price has been down by more than 50 percent. Zoom had experienced rapid growth during the Corona crisis and benefited greatly from the trend towards video conferencing and working from home. The company is trying to cushion the end of the boom with new products, concentrating primarily on corporate customers. So far, this has been achieved with modest success. The market is competitive, and Zoom faces strong competition from Cisco’s WebEx, Salesforce’s Slack, Microsoft Teams and Google Meet.
In the past financial quarter, sales increased by twelve percent compared to the previous year to 1.07 billion dollars. That represents the weakest growth since going public in 2019. The bottom line is that the company made $113.6 million in the three months ended April — half what it was a year ago. Reasons were high takeover and operating costs as well as losses in value of strategic investments.