Zoom shares surge 4% on Q1 beat
Zoom (NASDAQ:) reported Q1 earnings, with of $1.16 coming in better than the consensus estimate of $0.99. Revenue grew 3% year-over-year (up 5% in constant currency) to $1.1 billion, compared to the consensus estimate of $1.08B.
Shares initially rose about 4% before rotating lower in pre-open Tuesday to trade 1% in the red.
At the end of Q1/24, the company had approximately 215,900 Enterprise customers (up 9% year-over-year), with 3,580 customers (up 23% year-over-year) contributing more than $100,000 in trailing 12 months revenue.
“This relationship with our customers helped us to exceed our guidance due to Enterprise growth and stabilizing Online revenue while driving greater efficiencies in our business to deliver strong profitability and free cash flow margin,” said CEO Eric Yuan.
For Q2/24, the company expects EPS in the range of $1.04-$1.06, compared to the consensus of $1.05, and revenue in the range of $1.11-$1.115B, compared to the consensus of $1.11B.
For the full year, the company sees EPS at $4.25-$4.31, compared to the consensus of $4.22, and revenue at $4.465-$4.485B, compared to the consensus of $4.45B.
KeyBanc analysts reiterated a Sector Weight rating amid “continued growth deceleration,” despite the company delivering “strong” results.
“We believe Zoom remains well-positioned to benefit from secular hybrid work and related digital collaboration trends,” they added.
Mizuho analysts are more bullish as they stayed Buy-rated with a $100 per share price target.
“We continue to believe FY24 will be yet another transition year for ZM, and expect growth to re-accelerate in FY25. We believe Zoom is emerging as a Generative AI player in the collaboration and customer experience space.”
Additional reporting by Senad Karaahmetovic
