Live news: Zoom shares jump after raising full year outlook

Shares in Zoom Video Communications leapt higher after the company boosted its earnings outlook for the current fiscal year and said it was still benefiting from the hybrid work trend.

The videoconference company raised its full year adjusted net income to between $1.48bn and $1.5bn, compared to previous guidance of between $1.4bn and $1.45bn. However, Zoom left its revenue outlook unchanged at between $4.53bn and $4.55bn.

Zoom’s outlook was welcomed by investors against a backdrop of disappointing results from mostly tech companies that became stock market darlings during the pandemic, and warnings from blue-chips that profits were being eroded by higher costs. Shares were up almost 15 per cent in after-hours trading on Monday, after rising more than 18 per cent.

Although Covid-19 cases have fallen in many countries, hybrid working has become a new normal for many workers. That shift has sustained demand for videoconferencing, which surged in popularity during the pandemic. Zoom said it increased the amount of enterprise customers — its paid service — 24 per cent in its first quarter, compared to the same period last year.

Zoom said it expected revenue in the current quarter to be in the range of $1.11bn to $1.12bn, while adjusted earnings should come in between 90 to 92 cents a share. Those figures were both slightly ahead of analysts’ forecasts.

Zoom reported a 12 per cent increase in revenue to $1.07bn for the first quarter, led by new user growth, which met analysts’ expectations. Adjusted earnings of $1.03 a share beat Wall Street’s forecast of 87 cents.

“We delivered revenue of over one billion dollars driven by ongoing success in Enterprise, Zoom Rooms, and Zoom Phone, which reached 3 million seats during the quarter,” chief executive Eric Yuan said.