The California-based video communication service provider Zoom gained more than 350%, and profits rocketed by about 3,300% in its Q2 result, as several companies across the globe subscribed to the video conferencing app in connecting with their employees working remotely during the COVID-19 pandemic.
Zoom reported a net profit of $185.7 million for the quarter that ended on July 31, a surge of about 3,300% from $5.5 million. It also recorded total revenue of $663.5 million, showing a gain of over 350% increase year-over-year.
Zoom’s Stock price hit a record high yesterday ahead of the earnings statement by Zoom CEO, Eric Yuan and then gained another 28% in after-hours trading once the results became public.
Why Zoom share price is rising?
“As remote work trends have accelerated during the pandemic, organizations have moved beyond addressing immediate business continuity needs to actively redefine and embracing new approaches to support a future of working anywhere, learning anywhere, and connecting anywhere,” Zoom CEO Eric Yuan said Monday in an earnings call.
The numbers indicate that Zoom, one of the success stories during the pandemic, is turning its huge free-user base into hard cash.
“With ZM now clearly established as the global leader in the video collaboration market, its success paves a more clear path to compete in the enterprise market,” Rosenblatt analysts wrote.
However, J.P.Morgan analyst, Sterling Auty in a note to Bloomberg, warned that the impressive result printed by Zoom might not last for long as the pandemic eases. Auty said;
“The surge in growth has come increasingly from the riskiest customer segment,” he said. “Customers with less than 10 employees reached 36% of total revenue in the quarter.”
Zoom Video Communications, Inc. (NASDAQ: ZM) brings teams together to get more done in a frictionless and secure video environment. Zoom provides easy, reliable, and innovative video-first unified communications platform provides video meetings, voice, webinars, and chat across desktops, phones, mobile devices, and conference room systems. Zoom helps enterprises create elevated experiences with leading business app integrations and developer tools to create customized workflows.