Zoom released its latest quarterly earnings results Monday, beating analysts' earnings and revenue expectations. With its better-than-expected results, Zoom warned investors of a possible slowdown in its earnings for the coming quarters as demand for its services decreases as the global pandemic comes to an end.
For its latest quarter ending on Oct. 31, the company reported revenue of $1.05 billion. The figure is slightly higher than the $1.02 billion expected by Wall Street. The company's revenue had increased by 35% when compared to the same period last year.
Net income jumped by 71% to $340.3 million when compared to the same period last year. The company generated earnings of $1.11 per share, slightly higher than the $1.09 per share expected by analysts.
For its fiscal fourth quarter, Zoom expected its adjusted earnings to be between $1.06 and $1.07 per share. It also forecasts revenue of between $1.051 and $1.053 billion, implying a slightly 19% growth.
Since the start of the pandemic, Zoom has seen its stock price skyrocket as the company's platform became the go-to application for people and students who were forced to work and study at home. The company expanded from being just a contender in the business software sector to becoming a household name for virtual meetings.
After the pandemic made such meetings difficult, if not impossible, millions of people used Zoom's software to virtually attend classes and meetings almost every day. In its quarter that concluded in January, Zoom's revenue increased by more than 300%. Zoom's growth has since slowed down.
While Zoom's growth is slowing as more customers choose not to renew their subscriptions, the company is extending its deals with larger companies. Zoom claims that over 2,500 clients spend more than $100,000 a year, up 94% from the same time last year.
Organizations are equipping conference rooms for meetings with people who are not on-site, and the company's Zoom Rooms software is growing in popularity. On a Zoom call with investors, Kelly Steckelberg, Zoom's finance head, stated the conference room approach has become even more critical than it was pre-pandemic.
Zoom previously announced that it had canceled its $14.7 billion acquisition of cloud contact center software vendor Five9. Zoom said that it would instead be developing its own cloud contact center software, which it claims would be available in early 2022.
Zoom's founder and CEO, Eric Yuan, said it might be difficult to revisit the deal in the future given that the two companies are now publicly traded. If it does choose to pursue the deal, Zoom could afford to pay more, given that it has around $5.4 billion in cash, cash equivalents, and marketable securities.
