Zoom announces huge profits but warns of slowdown
Zoom recorded revenue of $956.2 million in the quarter, which means it nearly tripled.
Revenue for the quarter that ended April 30 jumped from $328.2 million in the same quarter a year earlier.
Income from operations in the first quarter was $226.3 million, up from $23.4 million in the first quarter of fiscal year 2021.
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Net operating income for the first quarter was $400.9 million, up from $54.6 million in the first quarter of fiscal year 2021.
Revenue rose 369 percent with the start of the Corona virus pandemic in the United States, which brought millions of new users.
The company expects revenue for the current quarter to be higher than estimates, as increased adoption of hybrid business models by companies is expected to increase demand for its video conferencing tools.
Zoom has become a household name in the past year, as companies and schools have turned to its services for virtual classes, office meetings and social networking.
But with rapid vaccination efforts, life is slowly returning to normal. Analysts are skeptical about the sustainability of Zoom’s growth, especially with competitors Microsoft, Google and Cisco.
Zoom warns of slowdown:
The company alleviated some of those concerns by forecasting revenue for the current quarter in the range of $985 million and $990 million.
In the first quarter ending April 30, costs jumped 155 percent to $265 million.
Cash and cash equivalents and marketable securities, as of April 30, totaled $4.7 billion. Net cash provided from operating activities amounted to $533.3 million for the first quarter, compared to $259.0 million in the first quarter of fiscal year 2021.
The growing number of free users on Zoom has driven up costs for the company, which operates some of its data centers.
Zoom, which has come under scrutiny for security-related issues, is shifting its focus to its two-year-old cloud calling product, Zoom Phone and conference-hosting product Zoom Rooms, as Facebook and Google work to improve their video products.
At the end of the first quarter of fiscal year 2022, Zoom had approximately 497,000 customers. An increase of about 87 percent over the same quarter last fiscal year.
And 1999 customers contributed more than $100,000 in 12 months of revenue. An increase of nearly 160 percent from the same quarter last fiscal year.
Zoom has provided the following guidance for the second quarter of fiscal year 2022 and full fiscal year 2022.
- Second quarter of fiscal year 2022: Total revenue is expected to be between $985 million and $990 million. Income from operations is expected to range between $355 million and $360 million.
- Fiscal year 2022: Total revenue is expected to range between $3.975 billion and $3.990 billion. Income from operations is expected to range between $1.425 billion and $1.440 billion.