Zoom Video Communications said its fourth-quarter net profit rose by about 88.4 per cent on an annual basis, underpinned by a growth in the number of paying customers.
Net profit in the three months ended on January 31 surged to $490.5 million, the Nasdaq-listed company said. It was up by about 44.2 per cent on a quarterly basis.
Revenue jumped 21.4 per cent to more than $1.07 billion, beating analysts' estimates of $1.05bn, according to Refinitiv.
The company’s net profit for the 2022 financial year more than doubled on a yearly basis to more than $1.3bn while sales rose 54.6 per cent to more than $4.09bn.
“We delivered strong results … with increased profitability and operating cash flow growth as our global customer base continued to grow and find new use cases for our broadening communications platform,” founder and chief executive Eric Yuan said.
“To sustain and enhance our leadership position in fiscal year 2023, we plan to build out our platform to further enrich the customer experience with new cloud-based technologies, and expand our go-to-market motions, which, we believe, will enable us to drive future growth,” Mr Yuan said.
Zoom shares, which started the year at about $184.3, dropped by about 3 per to $128.6 in pre-market trading on Tuesday.
The company also issued a weaker than expected revenue outlook for the current quarter and the full financial year.
Revenue in the current quarter will be between $1.07bn and $1.075bn, a yearly jump of about 12 per cent, the company said. Analysts polled by Refinitiv had expected $1.1bn in sales.
For the full year, Zoom estimates revenue of between $4.53bn and $4.55bn, compared with analyst expectations of $4.71bn.
“This outlook is consistent with what we are observing in the market today,” chief financial officer Kelly Steckelberg said.
“Specifically, it assumes that our enterprise business will grow substantially faster than our online business. It also assumes that our year-over-year total revenue growth rate will modestly accelerate in late financial year 2023,” she said.
As of December 31, the company had 509,800 paid customers with more than 10 employees, up by about 9 per cent.
The company, which is based in California, invested about $117m in research and development in the November-January period. The R&D investment was more than 9.2 per cent of the total revenue earned during the quarter.
Zoom's net cash flow provided by operating activities amounted to $209.4m in the fourth quarter, about 47 per cent less than the same period in the 2021 financial year.
Total cash and marketable securities stood at more than $5.4bn on January 31.
