Zoom beats expectations – shares rally in the after-hours

Zoom Video Communications Inc. (NASDAQ: ZM) reported the latest financial results after the closing bell on Wall Street on Monday.

American communications technology company reported revenue of $1.146 billion for the previous quarter vs. $1.129 billion expected. Revenue grew by 2.2% vs. the same period the year before.

Earnings per share (EPS) reached $1.42, which was well above analyst estimate of $1.116 per share. EPS was up by 16.39% year-over-year.

Zoom achieved revenue of $4.527 billion in full fiscal year 2024, up by 3.1% year-over-year.

Company overview

• Founded: April 21, 2011
• Headquarters: San Jose, California, United States
• Number of employees: 8,484 (January 2023)
• Industry: Tech
• Key people: Eric Yuan (Chairman & CEO), Kelly Steckelberg (CFO), Peter Gassner (Director)

CEO commentary

“In FY24, we unveiled Zoom AI Companion, our generative AI digital assistant, aimed at boosting productivity, enhancing team effectiveness, and fostering skill development across the Zoom platform. We’re committed to democratizing AI accessibility, offering it to all our customers regardless of business size, included at no extra charge with a paid license,” Eric Yuan, CEO of the company said in a press release.

“Our team is dedicated to platform-wide innovation, introducing hundreds of new features, including those for Zoom Contact Center, which redefine the gold standard for customer experience. While delivering innovation for our customers, we also drove robust profitability and grew free cash flow, up 24.1% year over year to $1,471.9 million for the full fiscal year, representing a free cash flow margin of 32.5%,” Yuan concluded his statement to shareholders.

Stock reaction

Shares were down by 0.44% at the end of Monday’s session at $63.12 a share, as investors were waiting for the latest results.

The stock rose by around 9% in the after-hours after Zoom topped expectations for the quarter.

Stock performance

• 5 day: +1.61%
• 1 month: -8.43%
• 3 months: -3.71%
• Year-to-date: -12.22%
• 1 year: -14.38%

Zoom stock price targets

• BNP Paribas: $60
• Piper Sandler: $72
• Wells Fargo & Company: $70
• Barclays: $70
• Rosenblatt Securities: $75
• Benchmark: $83
• Royal Bank of Canada: $95
• Stifel Nicolaus: $70
• Citigroup: $66
• HSBC: $83
• Wedbush: $80
• Sandford C. Bernstein: $82
• Robert W. Baird: $90
• Mizuho: $100

Zoom Video Communications Inc. is the 948th largest company in the world with a market cap of $19.21 billion, according to CompaniesMarketCap.

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Sources: Zoom Video Communications Inc., TradingView, MarketWatch, MarketBeat, CompaniesMarketCap