Zoom Q2 2020 earnings exceed expectations
On Monday, Zoom reported a huge second quarter, with $663.5 million in revenue compared to $145.8 million a year ago and an increase in its subscriber base. Zoom stock has increased each day after the company released earnings in three of five instances since the company went public, including both events so far in 2020, when shares increased 7% and 7.6% respectively. Shares surged more than 40% on Tuesday, the day after it reported Q2 earnings. Zoom stock has gained about 500% year-to-date. We provide a summary of the results and future outlook.
Q2 fiscal year 2021 financial highlights:
“Our ability to keep people around the world connected, coupled with our strong execution, led to revenue growth of 355% year-over-year in Q2,” Zoom founder and CEO Eric S. Yuan said in a statement announcing the earnings.
Revenue: Total revenue increased by 355% year-over-year, totaling $663.5 million for the quarter against analysts’ expectations of $500.5 million, and profits of 92 cents per share versus 45 cents per share forecasted by analysts.
Customer Metrics: Zoom CFO Kelly Steckelberg said subscriptions from new customers accounted for 81 percent of the second-quarter revenue growth. The company did not see the customer churn it had expected, she added. Yuan noted that those new customers included ExxonMobil and Activision Blizzard. At the end of the second quarter of the fiscal year 2021, Zoom had approximately 370,200 customers, up approximately 458% from the same quarter last fiscal year, with 988 customers contributing more than $100,000 in trailing 12 months revenue, up approximately 112% from the same quarter last fiscal year.
Financial outlook
The company’s revenue outlook for fiscal 2021 is now $2.39 billion, Yuan said. Zoom has become ubiquitous during the coronavirus pandemic, reflected in its record-breaking valuation and first quarter when it grew revenue almost 170% year over year to $328 million.
What does the future hold for Zoom?
Zoom is among the best-performing stocks of 2020, and currently enjoys the largest market share within video conferencing technology stocks.
The Covid-19 pandemic has made Zoom name synonymous with video-conferencing. While the trend towards remote working continues to gain pace, it’s worth considering the company’s longer-term future growth prospects as recent success is a product of the circumstances brought by Covid-19.
How did the stock move?
Zoom stock has increased the day after the company released earnings in three of five instances since the company went public, including both events so far in 2020, when shares increased 7% and 7.6% respectively. Shares surged more than 40% on Tuesday, the day after it reported Q2 earnings. Zoom stock has gained about 500% year-to-date and closed trading at $459.57.