Earnings forecast comes in a little under estimates while sales guidance is in line as Zoom's pandemic growth rates begin to settle down.
Zoom Video Communications Inc. reported its first billion-dollar quarter Monday, but the videoconferencing company's guidance sent shares plunging more than 7% in after-hours trading.
Zoom (ZM)reported fiscal second-quarter net income of $316.9 million, or $1.04 a share, compared with net income of $185.7 million, or 63 cents a share, in the year-ago quarter. The company's adjusted net income was $1.36 a share. Revenue soared 54% to $1.02 billion from $663.5 million a year ago.
Analysts surveyed by FactSet had expected adjusted net income of $1.16 a share on revenue of $991 million.
"In Q2, we achieved our first billion dollar revenue quarter while delivering strong profitability and cash flow," Zoom Chief Executive Eric Yuan said in a statement announcing the results.
The better-than-expected top- and bottom-line quarterly results were undercut, however, by a tepid forecast for third-quarter earnings. Zoom gave guidance for between $1.07 and $1.08 a share of adjusted earnings, while analysts polled by FactSet anticipated $1.10 a share.
The earnings and revenue win followed an ebullient note last week from Morgan Stanley analyst Meta Marshall, who raised her rating on Zoom to overweight, after being at equal weight since she started covering the stock in May 2019, a month after it went public. Marshall raised her price target to $400 from $360.
Read more: Zoom Video's stock rallies after Morgan Stanley says stock has gotten too cheap to ignore
This came as welcome news for investors, who had seen the value of their shares plummet more than 40% since Zoom's stock peaked at a closing price of $568.34 on Oct. 19, 2020, on a national wave of remote work.
Zoom's stock is up 3% so far in 2021. The broader S&P 500 index has gained 20.6% this year.
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