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Business News/ Companies / Company Results/  Zoom Q4 results beats estimates on strong product demand, announces share buyback; share price rallies 10%
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Zoom Q4 results beats estimates on strong product demand, announces share buyback; share price rallies 10%

Zoom projected revenue of about $4.6 billion in the fiscal year ending in January 2025, which is below analysts’ estimate of $4.66 billion. Profit, excluding some items, is estimated to be $4.85 to $4.88 a share, compared with the average projection of $4.72.

Zoom shares hit a high of $71.96 in extended trading after closing at $63.12 in New York. (Image: REUTERS)Premium
Zoom shares hit a high of $71.96 in extended trading after closing at $63.12 in New York. (Image: REUTERS)

Zoom Video Communications share price rallied more than 10% in extended trading on Monday after the company posted better-than-expected quarterly results aided by strong demand for its expanding product portfolio.

Zoom shares hit a high of $71.96 in extended trading after closing at $63.12 in New York.

The video-conferencing provider Zoom also announced a stock buyback of up to $1.5 billion of its outstanding Class A common stock.

The company reported an adjusted profit of $1.42 per share for the quarter ended January 31, above analysts’ estimates of $1.15 per share, according to LSEG data.

Its revenue rose 2.6% to $1.15 billion, beating an estimate of $1.13 billion.

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Its Enterprise revenue increased 4.9% to $667.3 million in the period ended January 31. The company had 220,400 corporate customers at the end of the quarter, with 3,810 contributing more than $100,000 in trailing 12-month revenue.

Online sales, generally from casual consumers and small business, declined 0.5% to $479.2 million. 

The company also reported an operating cash flow margin of 30.6% for the quarter under review.

For the fiscal year ending in January 2025, Zoom projected revenue of about $4.6 billion, which is below analysts’ estimate of $4.66 billion. Profit, excluding some items, is estimated to be $4.85 to $4.88 a share, compared with the average projection of $4.72.

Also Read: The 9-month-old AI startup challenging Silicon Valley's giants

During the third quarter, Zoom introduced its AI companion, allowing paid users to access features including meeting summaries and catch-ups, as well as email and chat composing prompts.

“We are also going to build new services and are driven by Zoom AI companion, this year we are going to double down on Zoom AI customization and also focus on monetization," said Zoom CEO Eric Yuan on a post-earnings conference call.

The Zoom AI companion has over 510,000 accounts enabled in the past five months, CFO Kelly Steckelberg said.

Meanwhile, Zoom’s stock price has declined 15% over the past 12 months, missing the market rally that fueled many technology companies.

(With inputs from Agencies)

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Published: 27 Feb 2024, 08:36 AM IST
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