Zoom Stock Surges 13% in After-Hours Trading

Zoom's stock experienced a surge of up to 13% in after-hours trading on Monday following the release of its fiscal fourth-quarter results that outperformed analysts' expectations.

The company reported a revenue increase of less than 3% from $1.12 billion compared to the previous year. Net income for the quarter ending January 31 was $298.8 million, or 98 cents per share, a significant improvement from the net loss of $104.1 million, or 36 cents per share, in the same quarter the previous year.

While Zoom witnessed remarkable growth during the peak of the Covid-19 pandemic, with a surge in remote work contributing to over 100% revenue increase for five consecutive quarters, the company is now facing a slowdown with single-digit growth.

The fiscal fourth-quarter growth could have been more robust if not for a sales reorganization that took a considerable amount of time for the organization to recover from, as mentioned by Kelly Steckelberg, Zoom's finance chief, during a conference call with analysts.

Despite the challenges, Zoom reported an increase in enterprise customers, reaching 220,400 at the end of the fiscal fourth quarter compared to 219,700 at the end of the prior quarter.

Additionally, the company highlighted a notable 4x increase in downloads for its Team Chat migration tool over the last six months, with CEO Eric Yuan acknowledging that Zoom has not effectively marketed its chat capabilities.

Looking ahead, Zoom projected adjusted earnings per share of $1.18 to $1.20 on $1.125 billion in revenue for the fiscal first quarter, representing growth of less than 2% from the previous year.

For the 2025 fiscal year, Zoom anticipates adjusted earnings per share of $4.85 to $4.88, with $4.60 billion in revenue, indicating a modest 1.6% revenue growth.

Before the positive market reaction, Zoom shares had declined by 12% year-to-date, in contrast to the 6% gain in the S&P 500 stock index during the same period.