Zoom’s Q2 net profit eclipses 2019 earnings as revenue surges
The shares of the San Jose-based company jumped as much as 26% boosting the net worth of its CEO Eric Yuan by $4.2bn
Zoom Video Communications said its second-quarter net profit exceeded its full-year earnings for 2019, driven by revenue growth amid the coronavirus-induced crisis.
The $186 million (Dh683.2m) earned during the period was also about 34 times the $5.5m recorded during the same period a year ago, the Nasdaq-listed company said in a regulatory filing on Monday.
The Nasdaq-listed company's revenue for the period reached $663.5m, more than four fold the previous year and exceeding Bloomberg’s average analyst estimates of $500m. Shares of the San Jose-based firm surged 26 per cent on Monday boosting the net worth of its chief executive Eric Yuan by $4.2 billion.
“Organisations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere and connecting anywhere,” Mr Yuan said.
“Our ability to keep people around the world connected, coupled with our strong execution, led to [the] revenue growth.”
Zoom said the firm’s ability to acquire new customers and expand across its existing customer base “drove the company’s revenue”. At the end of the second quarter, it had nearly 370,200 customers, with more than 10 employees, a yearly increase of 458 per cent.
Large customers – companies that generated more than $100,000 in revenue for Zoom in the past year – more than doubled to 988 during the quarter.
The company said it increased its revenue outlook for the third quarter and the full financial year, with third quarter revenue to hover between $685m and $690m. For the full year, Zoom estimates revenue between $2.37bn and $2.39bn - which is more than three fold its 2019 earnings, Mr Yuan said.
The video communications platform has been adopted by businesses, schools, universities and individuals due to Covid-19 related movement restrictions and lockdowns. The company expects to increase its user base further in the remaining year.
“At Zoom, we strive to deliver a world-class, frictionless and secure communication experience for our customers across locations, devices and use cases,” Mr Yuan said.
Zoom shares, which started the year at around $69, closed at $410 on Monday. If the stock maintains a similar gain on Tuesday, Mr Yuan's fortune will surpass $20bn, according to Bloomberg data.
Zoom has joined forces with two large corporate customers in recent months, Exxon Mobil and Activision Blizzard, said Mr Yuan, boosting investors’ confidence.
“For the quarter, the year-over-year growth in revenue was primarily due to subscriptions provided to new customers, which accounted for approximately 81 per cent of the increase,” the company’s chief financial officer Kelly Steckelberg said on the conference call.
Subscriptions to existing customers accounted for 19 per cent of the revenue increase.
“This demand was broad-based across industry verticals, geographies and customer cohorts,” Ms Steckelberg said.
Updated: September 2, 2020 03:49 AM