Zoom provides disappointing revenue forecast for first quarter and full year

Earnings

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Eric Yuan, founder and CEO of Zoom Video Communications, stands before the opening bell during the company’s initial public offering at the Nasdaq MarketSite in New York on April 18, 2019.
Victor J. Blue | Bloomberg | Getty Images

Zoom shares fell 13% in extended trading on Monday after the video-calling software maker issued full-year guidance that fell below what analysts had predicted.

Here’s how the company did:

  • Earnings: $1.29 per share, adjusted, vs. $1.06 per share as expected by analysts, according to Refinitiv.
  • Revenue: $1.07 billion, vs. $1.05 billion as expected by analysts, according to Refinitiv.

Zoom’s revenue increased 21% from a year earlier in the period that ended on Jan. 31. That’s a deceleration from 35% growth in the prior quarter, according to a statement.

Net income rose 88% in the quarter to $490.5 million as gross margin widened to 76% from 74.2% in the prior period.

However, in the first quarter and for the full year Zoom is projecting revenue that’s below what analysts were expecting. Sales in the current quarter will be $1.07 billion to $1.075 billion, representing growth of about 12%. Analysts polled by Refinitiv had expected $1.1 billion in revenue.

For fiscal year, the company sees $4.53 billion to $4.55 billion in revenue, implying 10.7% growth. Analysts polled by Refinitiv had been looking for $4.71 billion in revenue.

Prior to the after-hours move, shares of Zoom were down almost 29% for the year, underperforming the S&P 500 index, which is down about 9% over the same period.

Executives will discuss the results with analysts on a Zoom call starting at 5 p.m. ET.

This is breaking news. Please check back for updates.

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