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Zoom pops 16% on first-quarter earnings beat and powerful guidance

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Zoom founder Eric Yuan speaks before the Nasdaq opening bell ceremony on April 18, 2019 in Latest York City.

Kena Betancur | Getty Images

Zoom shares rose 16% in prolonged trading on Monday after the provider of video chat software reported better-than-expected first-quarter earnings and issued an upbeat forecast for the second period.

Here’s how the corporate did:

  • Earnings: $1.03 per share, ex-items vs. 87 cents per share as expected by analysts, in keeping with Refinitiv.
  • Revenue: $1.07 billion vs $1.07 billion as expected by analysts, in keeping with Refinitiv.

Zoom sailed past analysts’ earnings estimates for the quarter and gave profitability guidance for the present quarter and full yr that were well above expectations. That shows the corporate is ready to cut back costs as growth decelerates. Investors are on the lookout for tech corporations that may produce earnings as they move into stocks that may higher withstand rising inflation and rates of interest.

Heading into the report, Zoom had been a struggle for shareholders. After five straight quarters of triple-digit revenue growth in the course of the pandemic, Zoom is now reckoning with dramatically slower expansion and a market correction that is hammered stay-at-home stocks essentially the most.

As of Monday’s close, Zoom shares were down about 85% from their peak in October 2020, including a drop of greater than 50% this yr.

Revenue growth within the period ended April 30, got here in at 12%, down from near 200% in the identical quarter a yr earlier.

For the second quarter, Zoom now expects revenue of $1.115 billion to $1.12 billion, representing growth of no less than 9.2%. Analysts were on the lookout for growth of 8.7% to $1.1 billion, in keeping with Refinitiv. The corporate anticipates earnings per share within the range of 90 cents to 92 cents, higher than the 87 cents analysts were estimating.

For the total fiscal yr, Zoom expects revenue between $4.53 billion and $4.55 billion, versus the $4.55 billion analysts anticipated. It expects earnings between $3.70 and $3.77 per share, versus $3.53 analysts were expecting, in keeping with Refinitiv.

WATCH: Zoom CFO says M&A will probably be a ‘greater part’ of company strategy in fiscal yr 2023

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