Zoom tops Q1 estimates, says COVID-19 drove ‘higher demand’

Zoom reported its first quarter earnings report after hours on Tuesday, beating on both top and bottom lines. The company cited the coronavirus for driving the company’s surge in demand and supporting its turn around from the beginning of the year. Yahoo Finance’s Myles Udland breaks down the video conferencing company’s earnings report.

Video transcript

SEANA SMITH: Want to get to some breaking news that we have here in after hours trading. Zoom is out with its earnings report. Myles has been digging through this report for us and has the numbers. Myles?

MYLES UDLAND: I think not a surprise to too many, a stunning report here from Zoom. The stock is little changed after hours. But of course, the stock's at an all time high right now. Let's get to the numbers for the first quarter, adjusted earnings per share of $0.20. The street was looking for $0.09. Revenues, $328 million, expectations were for $203 million. In the second quarter and the full year, this where things get really interesting for Zoom. Revenues for the current quarter expected to be between $495 and $500 million. Prior expectations were for $222 million dollars. So essentially more than doubling what had been expected for Zoom to bring in on the top line during the second quarter of this year.

Then for the full year, the company is now looking for revenues between 1.7 and 3/4, so let's call it $1.8 billion and $2 billion. Had previously seen bringing in between $905 and $915 million during the full year. And so obviously the Street has gotten very excited about what's been happening with the stock. Again, it went public at $25 last year. It closed at $209 today, $208.08. So obviously, the Street knew that the business was doing quite well.

But this is a reset, I think, in terms of the trajectory of the company. I mean, they were looking at getting to a billion dollars in revenue this year. Now they're going to get to two. And that just doesn't really happen for companies that are operating at this scale. So again, the stock performance has been amazing, but the results backing it up.

And you know, you can kind of go through all the different metrics here. They have 265,000 customers that have more than 10 employees. It's up 350% over the same quarter last year. And the superlatives go on. But I think again, the stock not moving a lot here. But the news, this kind of news had been baked in. Investors expected Zoom to have kind of an amazing quarter. And that has certainly come through in today's results.

SEANA SMITH: Yeah, it certainly has. And Myles, just going off of some of those stunning numbers, 769 customers contributing more than 100,000 in the trailing 12 months' revenue, which is up 90% from the same quarter last year. So just talking about the tremendous growth that the company has seen over the last several months.

All right, we're going to take a quick break. But when we come back, we're just 154 days away from the 2020 presidential election. And Joe Biden is back on the campaign trail. We're going to talk a little bit more about this with our very own Rick Newman right after the break.