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Zoom increases full-year profit forecast over strong enterprise demand

Author : Pankaj Singh | Published Date : 2022-05-25 

Zoom increases full-year profit forecast over strong enterprise demand

Zoom Video Communications has reportedly increased its full-year adjusted profit prediction on account of strong demand from large organizations in a hybrid workplace. Zoom’s shares witnessed a 15% hike in extended trading following the recent development.

The company claims that the returns from high-paying corporate users increased by 31% in the first quarter, accounting for 52% of overall revenue. Zoom reported a 37.2% increase in adjusted operating profit in the quarter ended April 30 owing to its efforts to expand its product offerings to customer service contact centers, analytics firms, and cloud calls.

Zoom had also acquired Solvvy, an artificial intelligence start-up, as well as announced Zoom IQ, a call analytics platform for sales teams.

According to the new predictions, Zoom expects the revised profit per share to stay between USD 3.70 and USD 3.77 for the full year, compared to earlier estimates of USD 3.45 to USD 3.51. However, revenue increased only 12% to USD 1.07 billion in the first quarter, which is considered the lowest growth rate on record to date.

In a post-earnings call with investors, Zoom Chief Financial Officer Kelly Steckelberg stated that the company is expecting the revenue from enterprise customers to become an increasingly bigger percentage of total revenue over time.

It is worth noting here that demand for the company's platform has declined in recent quarters, owing to the easing COVID-19 lockdowns and increasing competition from rival platforms like Cisco WebEx, Microsoft Teams, and Google Meet.

Despite this, the San Francisco-based Zoom managed to record a profit in the first quarter that exceeded expectations, and earnings for the current quarter have been higher than expected. It is worth mentioning here that Zoom has reportedly lost 85% of its value after hitting a record high in 2020.

Source Credit:

https://www.straitstimes.com/business/companies-markets/zoom-raises-full-year-profit-view-on-strong-enterprise-demand

About Author

Pankaj Singh . .

Pankaj Singh

Endowed with a post graduate degree in management and finance, Pankaj Singh has been a part of the online content domain for quite a while. Having worked previously as a U.K. insurance underwriter for two years, he now writes articles for fractovia.org and other online portals. He can be contacted at- [email protected] | https://twitter.com/PankajSingh2605

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