Zoom raises full-year profit view on strong enterprise demand
Reuters
Published May 23, 2022 04:11PM ET
Updated May 23, 2022 06:20PM ET
(Reuters) -Zoom Video Communications Inc raised its full-year adjusted profit forecast on Monday, betting on robust demand from large businesses in a hybrid work environment, sending shares of the company up 15% in extended trading.
Revenue from Zoom's high-paying enterprise customers jumped 31% in the first quarter, representing 52% of its total revenue, the company said.
"We expect revenue from enterprise customers to become an increasingly higher percentage of total revenue over time," Chief Financial Officer Kelly Steckelberg said in a post-earnings call with analysts.
The company said adjusted operating margin rose 37.2% in the quarter ended April 30 as efforts to expand its enterprise offerings to customer service contact centers, cloud calling and analytics companies paid off.
Zoom had recently announced the acquisition of Solvvy, an AI startup, and launched Zoom IQ, a call analytics tool for sales departments.
For the full year, Zoom forecast adjusted profit per share to be between $3.70 and $3.77, compared with earlier expectations of between $3.45 and $3.51.
However, the company reported revenue rose 12% to $1.07 billion in the first quarter, its slowest growth on record.
Over the past few quarters, demand for the company's platform had slowed as COVID-19 lockdowns eased and competition intensified from Microsoft (NASDAQ:MSFT)'s Teams and Cisco (NASDAQ:CSCO)'s WebEx and Google (NASDAQ:GOOGL)'s Meet.
Still, the San-Francisco-based firm reported first-quarter profit that beat expectations and forecast earnings for the current quarter above estimates.
Shares of Zoom, a pandemic darling, have tumbled 85% since they touched a record high in 2020.
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Written By: Reuters
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