Zoom shares skyrocketed more than 30 percent on Tuesday following an earnings report that saw the video conferencing provider obliterate Wall Street’s estimates for the quarter.
The San Jose, Calif.-based company was up as much as 39 percent in pre-market trading Tuesday as brokerages raised their price guidance by an average of $161 a share following quarterly results that had the company raising its annual revenue forecast.
Zoom was an early beneficiary of the coronavirus pandemic, which forced people online for everything from work meetings to school to family reunions. Video chat platforms have become a vital part of day-to-day life since mid-March when the Covid-19 pandemic shut down offices across the country, and Zoom and rivals like Microsoft’s Teams and Cisco’s Webex have seen usage soar.
For the three months ending July 31, Zoom saw its revenue more than quadruple year-over-year to $663.5 million, far outpacing the $500.5 million that analysts had forecasted. Zoom also raised its revenue forecasts by more than 30 percent.
Since the start of the pandemic, Zoom has worked to convert the mass of free users into paying customers, which is important because the company relies on both its own data centers and cloud providers such as Amazon and Oracle to provide its serving, meaning it must bear costs for free users.
Zoom’s number of large customers – those generating more than $100,000 in revenue in the past year – more than doubled to 988 in the fiscal second quarter.
Shares of the company were up 35.5 percent in Tuesday afternoon trading, briefly hitting an all-time high of $478.
With Post wires