Shares of Zoom Video Communications Inc. jumped after the bell on Monday after a better-than-expected outlook for the second quarter.
The American communications technology company soared 4.84% or 4.32 points to $93.65 per share. It accelerated from a slight drop of 0.46% or 0.41 points to $89.33 per share in the regular trading session.Accordingly, the upturn added $1.29 million to the firm’s market valuation.
However, the stock price has lost 51.52% or 94.93 points since the start of the year. This downturn came amid the easing of COVID-19 restrictions, hammering the stay-at-home businesses.
Nevertheless, Zoom gave profitability guidance for the current quarter and this year, surpassing average analysts’ expectations.
It now anticipates revenue of $1.11 billion to $1.12 billion, representing a growth of about 9.20%. This projection came in higher than the market estimate of 8.70% growth to $1.10 billion.
In addition, the company forecasted earnings per share in the range of $0.90 to $0.92, ahead of the $0.87 expected.
For the full fiscal year, Zoom projects revenue between $4.53 billion and $4.55 billion, above the $4.55 billion anticipated. Then, it expects earnings between $3.70 and $3.77 per share, outpacing the analysts’ estimate of $3.53.
These upbeat prospects reflected the company’s efforts to reduce costs as growth decelerated. At present, investors looked for tech companies that can produce earnings amid the record-high inflation and interest rates.
Zoom rise on Q1 earnings beat
Moreover, Zoom sailed past experts’ earnings estimates for the first quarter. Subsequently, it reported $1.07 billion in revenue, matching the market expectations. At the same time, its earnings per share was $1.03, surpassing the forecast of $0.87.
The firm also reported 198,900 enterprise customers at the end of the quarter, representing a 24.00% year-over-year jump.
Zoom launched offerings into new categories beyond video chat. This move included a customer contact center business that rolls video, voice, SMS and chat into a single platform. These efforts came amid its slower expansion from its pandemic highs.