Zoom (ZM) earnings This fall 2023

Zoom CEO Eric Yuan addresses the Nasdaq opening ceremony in New York on April 18, 2019.

Kena Betancur | Getty Images

zoom Shares rose 8% in extended trading on Monday after the video chat company released fourth-quarter results that beat analysts’ estimates and offered an upbeat earnings forecast for the year.

Here’s how the company did it:

  • Merits: $1.22 per share, adjusted, versus 81 cents expected by analysts, according to Refinitiv.
  • Revenue: $1.12 billion versus $1.10 billion expected by analysts, according to Refinitiv.

According to a statement, Zoom’s revenue grew 4% year over year in the quarter ended Jan. 31. That’s a dramatic slowdown from the quadrupling in revenue Zoom had in 2020 and 2021 as consumers and businesses flocked to the video service during the Covid pandemic.

The company posted its first net loss for the quarter since 2018, losing $104 million compared to net income of about $491 million in the year-ago period. The loss results from stock-based compensation costs.

Zoom continued to face issues during the quarter it encountered at the start of fiscal 2023, including executives scrutinizing before agreeing to pay the company for services, CEO Eric Yuan told analysts on a conference call.

Some organizations have reduced the number of jobs they buy Zoom’s software for as part of broader spending cuts, Kelly Steckelberg, the company’s chief financial officer, said on the earnings call.

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Growth will slow further this year. Zoom sees revenue of between $4.435 billion and $4.455 billion, up 1.1%, while analysts were expecting $4.6 billion in revenue. The company said adjusted earnings per share will be between $4.11 and $4.18, beating the median estimate of $3.66.

For the fiscal first quarter, adjusted earnings will be 96 to 98 cents a share on sales of $1.080 to $1.085 billion. Analysts polled by Refinitiv had expected adjusted earnings per share of 84 cents and revenue of $1.11 billion.

Excluding the after-hours movement, Zoom’s stock is up 8% for the year, while the S&P 500 is up 3% over the same period.

During the fourth fiscal quarter, Zoom announced it would introduce email and calendar services, and a virtual agent chatbot to handle customer service requests.

Earlier this month, Zoom announced it would be shedding 1,300 employees, which is 15% of its workforce. “As part of our restructuring, we are optimizing our go-to-market strategy to better support our enterprise customers and increase productivity,” said Steckelberg.

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