Zoom bumps its longer-term outlook higher, but near-term forecast comes up short

By Bill Peters

Company says AI is helping to drive results

Zoom Video Communications Inc. on Monday bumped its full-year profit and sales forecast higher, after reporting first-quarter results that beat Wall Street's expectations, helped by a broader artificial-intelligence rollout across the video-calling platform's products.

But while Zoom's longer-term forecast was more upbeat, its nearer-term expectations for the second quarter were a bit below analysts' forecasts.

Shares fell 1.2% after hours.

The company reported first-quarter net income of $216.3 million, or 69 cents a share, compared with $15.4 million, or 5 cents a share, in the same quarter last year. Adjusted for stock-based compensation, gains on investments, acquisition and restructuring costs and litigation settlements, Zoom (ZM) earned $1.35 a share.

Revenue rose 3.2% to $1.14 billion.

Analysts polled by FactSet expected adjusted earnings per share of $1.19, on revenue of $1.13 billion.

Zoom forecast second-quarter sales of between $1.145 billion and $1.15 billion, compared with FactSet estimates for $1.15 billion. The company said it expected adjusted earnings per share of $1.20 to $1.21, below FactSet forecasts for $1.24 a share.

For the full year, Zoom said it expected $4.61 billion to $4.62 billion in sales, with adjusted earnings per share of between $4.99 and $5.02. Those were better than the outlook the company gave in February.

Demand for Zoom exploded during the pandemic, as more people worked from home. As workers began returning to the office in the years that followed, the company has tried to maintain growth via new products, such as a word-processing app and an artificial-intelligence assistant.

Zoom in March announced the launch of a compliance-management platform, as well as an AI-powered workplace-collaboration platform called Zoom Workplace.

"In Q1, we continued to integrate AI across our platform including Zoom Contact Center and Zoom Workplace, our AI-powered collaboration platform that provides customers the ability to reimagine teamwork by streamlining communications, increasing employee engagement and improving productivity within their organizations," Zoom Chief Executive Eric Yuan said in the company's earnings release on Monday.

Shares of Zoom are down around 10% over the past 12 months.

-Bill Peters

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05-20-24 2008ET

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