Zoom Video Communications, Inc. (NASDAQ:ZM) achieved its first billion dollar revenue quarter in the three months to end-July as the pandemic drove demand for its video-conferencing service.
However, the company’s forecast for third-quarter earnings came in below market expectations as revenue growth is predicted to slow down.
Results for the second quarter to 31 July 2021 exceeded market expectations, with revenue growing by 54% to US$1.02bn and net profit rising to US$316.9mln, or US$1.04 per share, from US$185.8mln, or US$0.63 per share, in the same period last year.
Zoom said it expects revenue for the third quarter of US$1.015bn-US$1.02bn compared with market forecasts for around US$1.013bn. It forecast earnings between US$1.07 and US$1.08 per share, below analysts’ expectations of US$1.09.
The group expects full-year revenue of US$4bn-US$4.01bn and EPS of US$4.75-US$4.79.
Free cash flow was US$455mln in the second quarter, up from US$373.4mln.
At the end of July, Zoom had 2,278 customers contributing more than US$100,000 in trailing 12 months revenue, up 131% from the same quarter last year. The number of customers with more than 10 employees rose by 36% to 504,900 customers in the period.
“In Q2, we achieved our first billion dollar revenue quarter while delivering strong profitability and cash flow,” said Zoom founder and CEO, Eric S. Yuan.
“Q2 also marked several milestones on our expansion beyond the UC platform. We launched Zoom Apps, bringing over 50 apps directly into the Zoom experience, and Zoom Events, an all-in-one digital events service.
“Today we are a global brand counting over half a million customers with more than 10 employees, which we believe positions us extremely well to support organizations and individuals as they look to reimagine work, communications, and collaboration.”