ZM Stock Up 1% in Pre-Market, Zoom Q1 Earnings Tear to Bits Wall Street Expectations

UTC by Daria Rud · 3 min read
ZM Stock Up 1% in Pre-Market, Zoom Q1 Earnings Tear to Bits Wall Street Expectations
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Zoom’s Q1 earnings far outnumbered analysts’ expectations, appeasing investors and leading to Zoom stock surge. In pre-market today, Zoom (ZM) stock has jumped by 1.88% to $212.00.

On Tuesday, Zoom Video Communications Inc (NASDAQ: ZM) reported its financial results for the quarter that ended on April 30, 2020. The company’s Q1 earnings far outnumbered analysts’ expectations, appeasing investors and leading to Zoom stock surge.

Following Zoom’s financial report, Zoom stock went up. It closed 1.93% up at $208.08 on Tuesday but declined by 1.67% to $204.60 after hours. In pre-market today, Zoom stock has jumped by 1.88% to $212.00. Zoom’s market cap is $58.67 billion.

Zoom Q1 Financial Highlights

For the first quarter, Zoom’s total revenue totaled $328.2 million, up 169% year-over-year. Besides, its net income of $27 million, or 9 cents a share, surpassed the net income of $200,000, or less than a penny a share in Q1 2019. Meanwhile, Refinitiv and FactSet analysts were looking for $202.48 million in revenue and $0.09 in earnings per share (EPS).

In addition to impressive Q1 earnings, Zoom reported acquiring a number of new customers and expanding across existing customers. In particular, Zoom had about 265,400 customers with more than 10 employees, a 354% increase from Q1 last fiscal year. According to Zoom, it also had 769 customers contributing over $100,000 in trailing 12 months revenue, which is 90% up from the same period of last fiscal year. However, Zoom did not disclose active user numbers. As Bernstein analysts Zane Chrane and Michelle Isaacs estimated, Zoom’s mobile app had 173 million monthly active users as of May 27.

Zoom CEO Eric S. Yuan said:

“We were humbled by the accelerated adoption of the Zoom platform around the globe in Q1. The COVID-19 crisis has driven higher demand for distributed, face-to-face interactions and collaboration using Zoom. Use cases have grown rapidly as people integrated Zoom into their work, learning, and personal lives. I am proud of our Zoom employees who dedicated themselves to support customers and the global community during this crisis. With their tremendous efforts, we were able to provide high-quality video services to new and existing customers.”

During Zoom Video Communications meeting, attended by over 3,000 people, Yuan said:

“Video is going to change everything about communication. We have a lot of opportunities ahead of us. The [total addressable market] is bigger than we expected before.”

Zoom Q2 Guidance

Zoom has also made a prediction for the second quarter. The company is expecting the Q2 total revenue to be between $495.0 million and $500.0 million. Non-GAAP income from operations is predicted to be between $130.0 million and $135.0 million.

As for the full fiscal year, Zoom is foreseeing the total revenue between $1.775 billion and $1.800 billion. This outlook takes into consideration the demand for remote work solutions for businesses.

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Daria Rud
Author Daria Rud

Daria is an economic student interested in the development of modern technologies. She is eager to know as much as possible about cryptos as she believes they can change our view on finance and the world in general.

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