Zoom Video Communications (NASDAQ:ZM) shares rose sharply in early trading Tuesday after the company reported fiscal second-quarter earnings Monday that were better than analysts had expected and raised its full-year guidance significantly.
Zoom reported Revenue grew 355% on an annualized basis in the fiscal second quarter, which ended on July 31, according to a statement. In the prior quarter Zoom’s revenue grew 169%. New customers’ subscriptions delivered 81% of the revenue growth, and officials say there was less customer churn than expected.
Zoom’s income neared $186 million, up from just $5.5 million in the year-ago quarter. Zoom increased its adjusted gross margin to 72.3% from 69.4% one quarter earlier partly because of expanding the capacity of its own data center equipment.
People became more dependent on Zoom’s video-calling software for business, educational and personal use during the quarter, after the coronavirus pandemic led officials to direct people to stay home around the world, meaning that people could no longer meet in person as before.
Zoom averaged 148.4 million monthly active users in the quarter, up 4,700% year over year, RBC analysts led by Alex Zukin wrote in a note distributed to clients on Aug. 17, citing data from app analytics start-up SensorTower. The analysts have the equivalent of a “buy” rating on Zoom stock.
Zoom shares are up 369% since the beginning of the year, while the S&P 500 index is up about 9%. During Monday’s trading session Zoom stock increased almost 9%, while the Dow Jones Industrial Average and S&P 500 ended the day lower.
They opened up $121.19, or 37.3%, to $446.29.
