Zoom Video Communications (ZM) reported earnings results after market close on Monday, with the company's fourth-quarter results easily surpassing consensus estimates as still-widespread social distancing standards swept the country at the beginning of this year.
Guidance for the current quarter and full fiscal year also easily topped expectations, helping assuage Wall Street's concerns that the video conferencing's business might be sharply weakened by a broader economic reopening later this year. Shares surged more than 10% in after-hours trading, adding to a gain of more than 9.6% during the regular trading day.
Here were the main results from Zoom's report, compared to consensus estimates compiled by Bloomberg and the company's results in the same period last year:
Revenue: $882.5 million vs. $811.04 million expected versus $188.25 million year-over-year
Adjusted earnings per share: $1.22 vs. 79 cents expected versus 15 cents year-over-year
In its fiscal fourth quarter, Zoom benefited from an extension of 2020's social distancing behaviors. A spike in coronavirus cases around the holidays spurred renewed business restrictions and made many workplaces wary to reopen too soon in 2021, helping support the ongoing use of Zoom's services.
Sales rose by 369% to $882.5 million, handily topping estimates for a rise of 331% to $811.04 million in the three months ended in January. This also unexpectedly accelerated from the 367% top-line growth Zoom posted in the third quarter. Customers with more than 10 employees surged 470% to 467,100, also exceeding estimates for a jump to nearly 442,600.
“The fourth quarter marked a strong finish to an unprecedented year for Zoom. In FY2021, we significantly scaled our business to provide critical communications and collaboration services to our customers and the global community in response to the pandemic,” Zoom CEO Eric Yuan said in a statement. “As we enter FY2022, we believe we are well positioned for strong growth with our innovative video communications platform, on which our customers can build, run, and grow their businesses; our globally recognized brand; and a team ever focused on delivering happiness to our customers.”
Moreover, Zoom said it expected first-quarter revenue to come in between $900 million and $905 million, soaring well above consensus estimates for current-quarter sales of $829.5 million. Adjusted earnings for the quarter are anticipated to be between 95 cents and 97 cents a share, versus the 72-cent consensus estimate. For the full year, revenue will likely be $3.76 billion to $3.78 billion, the company added, also easily topping estimates for $3.53 billion.
Zoom's fourth-quarter results and guidance marked strong upside surprises relative to consensus expectations, which had forecast moderating growth after a meteoric rise in 2020 as the meeting software became the go-to platform for workplaces, friends and families to stay connected and schools to conduct remote learning.
And with workers and students set to return to offices and schools later this year, the specter of an even more marked deceleration has been a key concern, both for Zoom and other stocks comprising 2020's lucrative work-from-home trade. Zoom's guidance, however, suggested concerns of an unfettered slowdown may have been overblown.
At the same time, Zoom has also been expanding into new product categories to diversify the business outside of its flagship video conferencing service and offer a more comprehensive suite of workplace software. Zoom's two-year-old Zoom Phone cloud-based phone platform reached 1 million seats in January, and expanded its global coverage of the service to 44 countries.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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