On Monday, Zoom Video Communications Inc (ZM.O) boosted its full-year adjusted profit projection, counting on strong demand from large corporations in a hybrid work environment, sending the company’s stock up 15% in extended trade.
Zoom’s revenue from high-paying enterprise customers increased by 31% in the first quarter, accounting for 52% of overall revenue, according to the company.
In a post-earnings call with investors, Chief Financial Officer Kelly Steckelberg noted, “We expect revenue from business customers to become an increasingly bigger percentage of total revenue over time.”
In the quarter ended April 30, the company’s adjusted operating margin increased by 37.2 percent as efforts to grow its enterprise products to customer service contact centres, cloud calling, and analytics companies paid off.
Zoom recently announced the acquisition of Solvvy, an artificial intelligence startup, as well as the debut of Zoom IQ, a call analytics platform for sales teams.
Zoom expects adjusted profit per share to be between $3.70 and $3.77 for the full year, compared to $3.45 and $3.51 previously.
However, revenue increased only 12% to $1.07 billion in the first quarter, the worst growth rate on record.
Demand for the company’s platform has decreased in recent quarters as COVID-19 lockdowns have lessened and competition from Microsoft’s (MSFT.O) Teams, Cisco’s (CSCO.O) WebEx, and Google’s (GOOGL.O) Meet has increased.
Despite this, the San Francisco-based company recorded a profit in the first quarter that exceeded expectations and anticipated earnings for the current quarter that were higher than expected.
Zoom, a pandemic darling, has lost 85 percent of its value since hitting a high in 2020.
