Zoom and its Fiscal Second Quarter Earnings

On Monday, Zoom Video Communications reported their second-quarter fiscal earnings. Interestingly, second-quarter earnings surpassed expectations. Also, the company raised its full-year guidance. People should take into consideration that, Zoom’s market cap now stands at more than $129 billion. As a result, the San Jose-based company is now larger than IBM as well as AMD.

Interestingly, revenue grew 355% on an annualized basis in the fiscal second quarter. The quarter ended on July 31. In comparison, in the first fiscal quarter, grew 169%. It is worth noting that,  new customers accounted for 81% of the revenue growth.

Moreover, the Zoom’s income neared $186 million. As a reminder, last year in the second fiscal quarter, the income was $5.5 million. Also, the company increased its adjusted gross margin to 72.3% from 69.4% from one quarter earlier.

The impact of the coronavirus pandemic on Zoom

The coronavirus pandemic had a tremendous impact on the company. People all over the world spent most of their time at home for several months. As a result, they became more dependent on Zoom’s video-calling software for business, educational, and personal use in the quarter. 

Zoom adapted to the new reality by hiring information security and diversity leaders. Moreover, the company announced plans for research and development centers in Phoenix as well as Pittsburgh. In addition, Zoom acquired secure messaging start-up Keybase.

Notably, the average monthly users in the quarter reached 148.4 million, up by 4’700 a year on year.

Importantly, with respect to guidance, the company sees third-quarter fiscal earnings of 73 cents to 74 cents per share on an adjusted basis, and revenue is expected to reach between $685 million to $690 million.

Interestingly, the company raised its guidance for the full 2021 fiscal year. Zoom called for $2.40 to $2.47 in adjusted earnings per share and $2.37 billion to $2.39 billion in revenue. The company’s prior full-year guidance was $1.21 to $1.29 in adjusted earnings per share on $1.78 billion to $1.80 billion in revenue.