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Zoom Booms Due To COVID-19, With Q1 Revenue Nearly Tripling, Stock At New High

Dade Hayes

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Zoom Video Communication continued its narrative as one of a few companies fortunate enough to thrive during COVID-19, reporting total revenue of $328.2 million Tuesday, a gain of 169% over the prior-year period.

The San Jose-based company reported its results for its fiscal 2021 first quarter, which ended April 30, after the close of trading on Tuesday. Earnings per share of 9 cents increased from zero cents in the same quarter a year ago. The revenue number soared above the consensus estimate of Wall Street analysts, who expected $202.5 million, while the earnings number hit the target exactly.

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The company’s shares have been rising steadily as the earnings release has approached. They closed Tuesday at $208.08 after setting an all-time high during the trading day at $212.69. In 2020 to date, they have risen more than 200%. The company went public in April 2019, trading at $62.

“We were humbled by the accelerated adoption of the Zoom platform around the globe in Q1. The COVID-19 crisis has driven higher demand for distributed, face-to-face interactions and collaboration using Zoom. Use cases have grown rapidly as people integrated Zoom into their work, learning, and personal lives,” Zoom founder and CEO Eric Yuan said. “I am proud of our Zoom employees who dedicated themselves to support customers and the global community during this crisis. With their tremendous efforts, we were able to provide high-quality video services to new and existing customers.”

Yuan said 100,000-plus schools have used Zoom for remote learning, but security lapses have drawn scrutiny as the company has grown. New York City’s large school district cut ties with Zoom early on in the pandemic before later being persuaded to reverse the ban after the company made improvements. Many companies and institutions wary of “Zoom-bombing” have begun exploring other services from larger companies like Microsoft Teams or Google Hangouts.

As of the end of the quarter, Zoom had about 265,400 customers with more than 10 employees, up about 354% from the same quarter in the previous year. Those larger customers make up the majority of revenue.

Lasting changes in the workplace and educational systems will continue to boost revenue going forward, Zoom said. The company’s forecast for full-year fiscal 2021 revenue is $1.8 billion.

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