Zoom Q4 Results: Strong performance but weaker Outlook for 2022

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Zoom Q4

Earning - Zoom, a video-chat software maker, reported earnings of $1.29 per share (adjusted). It is higher than analysts' expectations of $1.06 per share. In the previous quarter, Zoom reported EPS of $1.11.

Revenue - The company reported revenue of $1.07 billion for December, higher than the street expectation of $1.05 billion. In the previous quarter, Zoom reported revenue of $1.07 billion. In the year-ago period, it reported revenue of $882.49 million.

Net income - The net income increased to $490.5 million, up 88%. The gross margin widened to 76% from 74.2% in the prior period.

Number of users - The company reported having 509,800 customers with over 10 employees at the end of January. In the October quarter, the number of customers was 512,100. Going forward, it will stop declaring customer numbers as the company believes it is not an appropriate metric to use any longer.

Enterprise customers - Going forward, the company will only disclose the number of enterprise customers and the net dollar expansion rate among those clients. For Q4, it has 191,000 enterprise customers, up 35% from a year earlier. The net dollar expansion rate is 130%.

2022 Outlook - The company has projected revenue below the analyst's expectation. It projected revenue between $1.07 billion and $1.075 billion, a growth of 12%. Analysts were expecting revenue of around $1.1 billion. For the current fiscal year, the company sees $4.53 billion to $4.55 billion in revenue, implying 10.7% growth. 

Target Price - The 24 analysts offering 12-month price forecasts for Zoom Video Communications have a median target of $222, with a high estimate of $400 and a low estimate of $130. The Zoom share price closed 5.81% higher on Monday at $132.60.

Zoom Q4 Results Review:

The stock price peaked in October 2020 but since then Zoom has lost over three-quarters of its value. The company has reported topline and bottom-line above street estimate. However, the revenue growth has slowed down as employees started returning to the office and companies eased their purchases of software for remote work. The outlook for 2022 is lower than analysts' expectations.