(Bloomberg) — Zoom Video Communications Inc. projected annual revenue that would top analysts’ estimates, signaling the video meeting service expects to remain a ubiquitous presence in daily life even as the pandemic recedes. Shares jumped about 10% extended trading.
Sales will be as much as $3.78 billion in fiscal year 2022, the San Jose, California-based company said Monday in a statement. While the projected annual revenue growth of 43% is far short of Zoom’s 326% increase in the fiscal year ended Jan. 31, it topped the 37% average estimate of analysts, according to data compiled by Bloomberg. Profit, excluding some items, will be as much as $3.65 a share. Analysts projected $2.97.
Investors have feared the software maker couldn’t continue the dramatic growth in 2020 that came as people forced home in coronavirus lockdowns connected remotely on the service to work, school, friends and family. While Zoom’s stock jumped almost fivefold last year as it became one of the biggest beneficiaries of the pandemic, it had gained just 11% during the first two months of 2021 before surging almost 10% Monday to close at $409.66 in New York. Chief Executive Officer Eric Yuan has tried to diversify Zoom’s capabilities and add products such as a cloud phone system to appeal to more large enterprises and small- and mid-sized businesses.
“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,” Yuan said in the statement.
Revenue more than tripled to $882.5 million in the fiscal fourth quarter, the company said. Analysts, on average, estimated $811 million. Profit, excluding some items, was $1.22 cents a share, compared with an average estimate of 79 cents.
“In our view, and whether you like it or not, video will continue to remain a core element of our daily lives and further be embedded in work, school, etc. Zoom will clearly benefit and report sustained levels of growth, in our view, and increasingly in the enterprise segment,” wrote Matt VanVliet, an analyst at BTIG, in a note before the results.
Zoom offers video gatherings free for 40 minutes and as many as 100 participants before users are charged for the service. Analysts have focused on the churn, the number of customers who drop monthly or annual subscriptions, particularly among corporate users.
The company said it had 467,100 customers with more than 10 employees, a jump of about 8% from the previous period and topping analysts’ average estimate of 442,570. The company also said 1,644 clients contributed $100,000 in trailing 12-month revenue. Analysts projected 1,474 such large customers.