Stock rises

Shares in Zoom Video Communications rose after the company reported earnings and revenue above analysts' average estimates and raised its full-year financial forecast. Zoom added about 30,000 customers during the quarter, indicating a move by employees around the world to a "hybrid work environment" format.

A report from Zoom Video Communications (ZM), released after the close of trading on Tuesday, showed that demand for web conferencing persisted worldwide despite the end of quarantine measures and the return of employees to the offices.

Shares in Zoom were up 2% after the close of trading on Tuesday.

Zoom Video reported the following results for the first quarter of fiscal 2022, which ended 30 April 2021:

• Earnings per share rose to a record $1.32, compared with analysts' forecast of $0.99;
• earnings for the quarter were $227.4m, up from $27m a year ago;
• revenues rose 191% to $956.2m compared to the same period in 2020.

In the first quarter, 66.5% of Zoom's revenue came from subscription sales from US users (down from last year's 74.9% share), 20.6% from EMEA users: Europe, Middle East and Africa (up from 15.6% in Q1 2020) and 12.9% from Asia-Pacific (APAC) users.

Zoom said its Zoom Phone product, which includes cloud-based phone services as well as video calling and other features, had 1.5 million users at the end of April, up from 1 million in January.

Earlier in July 2020, Zoom announced the Zoom for Home DTEN ME video conferencing monitor, created in partnership with DTEN. These devices could become new revenue streams for the company.

Zoom forecast

Zoom has raised its revenue forecast for fiscal 2022 to a range of $3.975bn-$3.990bn, representing growth of around 50%. At the same time, annual earnings per share are expected to be $4.56 to $4.61. For the second quarter, the company forecasts total revenue of $985 million to $990 million and earnings per share of $1.14 to $1.15.

Nevertheless, Zoom has a tough challenge ahead to maintain its momentum, after an incredible rise during the pandemic, given that quarantine restrictions continue to loosen in its core markets.

Since the start of 2021, Zoom shares have fallen 2.85% and lost 30.5% in the past six months.