Zoom expects sales to continue to grow in 2021 after pandemic

Zoom Video Communications Inc projected annual revenue that would top analysts’ estimates, signalling the video meeting service expects to remain a ubiquitous presence in daily life even as the pandemic recedes. Shares jumped about 10 per cent extended trading.

Sales will be as much as US$3.78 billion in fiscal year 2022, the San Jose, California-based company said Monday in a statement. While the projected annual revenue growth of 43 per cent is far short of Zoom’s 326 per cent increase in the fiscal year ended January 31, it topped the 37 per cent average estimate of analysts, according to data compiled by Bloomberg. Profit, excluding some items, will be as much as US$3.65 a share. Analysts projected US$2.97.

Investors have feared the software maker could not continue the dramatic growth in 2020 that came as people forced home in coronavirus lockdowns connected remotely on the service to work, school, friends and family. While Zoom’s stock jumped almost fivefold last year as it became one of the biggest beneficiaries of the pandemic, it had gained just 11 per cent during the first two months of 2021 before surging almost 10 per cent Monday to close at US$409.66 in New York. Chief executive officer Eric Yuan has tried to diversify Zoom’s capabilities and add products such as a cloud phone system to appeal to more large enterprises and small- and mid-sized businesses.

“We believe we are well positioned for strong growth with our innovative video communications platform, on which our customers can build, run, and grow their businesses; our globally recognised brand; and a team ever focused on delivering happiness to our customers,” Yuan said in the statement.

Revenue more than tripled to US$882.5 million in the fiscal fourth quarter, the company said. Analysts, on average, estimated US$811 million. Profit, excluding some items, was US$1.22 cents a share, compared with an average estimate of 79 US cents.