Zoom Video Communications Inc. raised its full-year outlook for sales after they more than doubled in the first quarter, as a surge in users working remotely during the coronavirus pandemic turned the video-chat app into one of the go-to tools for people quarantined at home.
Zoom on Tuesday reported first-quarter sales of $328.2 million, up 169% from a year earlier, and posted a profit of $27 million. Analysts surveyed by FactSet had expected sales of $203.5 million and net income of $3.2 million for the quarter ended April 30.
For San Jose, Calif.-based Zoom, the new virus has been both a boom and burden. The pandemic has raised the company’s profile, but also has exposed security and safety shortcomings that nine-year-old Zoom now is rushing to address. The boost in popularity has put Zoom in the battle for how businesses work remotely, pitting the company against far-larger rivals such as Microsoft Corp.
“The COVID-19 crisis has driven higher demand for distributed, face-to-face interactions and collaboration using Zoom,” Chief Executive Eric Yuan said in a written statement, referring to the disease caused by the virus. “Use cases have grown rapidly as people integrated Zoom into their work, learning, and personal lives.”
Zoom said the number of its most lucrative customers had swelled to 90% compared with a year earlier. A broader measure of paying customers, those with more than 10 employees, more than quadrupled year-over-year.
The pandemic has fueled investor appetite in Zoom, with the company’s shares more than tripling this year and the stock climbing to a record Tuesday before the company posted its latest results. The stock, which ended the day 1.9% higher, was up about 2% in after-hours trading following the earnings report.
Zoom said sales are likely to continue to advance and reach between $495 million and $500 million in the current quarter, also topping Wall Street forecasts. Sales for the full year, it said, are likely to be roughly $1.78 billion to $1.8 billion, reflecting demand for remote work. That tops the company’s March outlook of $905 million to $915 million, issued before the scale of the pandemic’s impact on businesses became clear.