A sign for Zoom Video Communications, in New York, on April 18, 2019.Mark Lennihan/The Associated Press
Zoom Video Communications ZM-Q on Monday posted better-than-expected quarterly results helped by strong demand for its expanding product portfolio as more employers embrace hybrid work models, sending its shares up about 10 per cent in extended trading.
Zoom also authorized a stock buyback of up to $1.5-billion of its outstanding Class A common stock.
The video-conferencing provider’s fourth-quarter results indicate Zoom’s attempts to integrate AI into its products and diversify its portfolio have paid off, as it takes advantage of a surge in hybrid working.
It reported an adjusted profit of $1.42 per share for the quarter ended Jan. 31, above analysts’ estimates of $1.15 per share, according to LSEG data. Revenue stood at $1.15-billion, beating an estimate of $1.13-billion.
“The company is doubling down on its long-term strategy to integrate generative AI rather than risk its massive cash holdings on a startup that might more immediately drive topline growth,” said Ryan Koontz, a senior equity analyst at Needham and Co.
Zoom introduced its AI companion during its third quarter, allowing paid users to access features including meeting summaries and catch-ups, as well as e-mail and chat composing prompts.
“We are also going to build new services and are driven by Zoom AI companion, this year we are going to double down on Zoom AI customization and also focus on monetization,” said Zoom CEO Eric Yuan on a post-earnings conference call.
The Zoom AI companion has over 510,000 accounts enabled in the past five months, CFO Kelly Steckelberg said.
The company also reported operating cash flow margin of 30.6 per cent for the reported quarter.
Zoom forecast fiscal-year 2025 revenue of about $4.60-billion, which is below analysts’ estimate of $4.66-billion.
It also forecast first-quarter revenue of $1.13-billion, in line with analysts’ expectations.