Zoom earnings skyrocket as coronavirus use booms, beats Wall Street estimates

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Video chat software giant Zoom (ZM) announced its Q1 2021 earnings after the bell on Tuesday, beating expectations and giving investors and analysts their first look at how much growth the company has experienced as a result of the coronavirus pandemic and ensuing lockdowns.

Here are the most important numbers from the report compared with what analysts were expecting, as compiled by Bloomberg.

  • Revenue: $328 million versus $203 million expected
  • Earnings per share: $0.09 versus $0.01 expected

The company’s stock was down in after hours trading

Zoom has been among the biggest beneficiaries, if you can call it that, of the pandemic. The lockdowns, which are now being eased in many countries, forced people to gather in front of their laptops, smartphones, and tablets to stay in contact with friends and loved ones, work from home, and attend virtual classes.

Its revenue, as a result, jumped a whopping 169% year-over-year.

Zoom CEO Eric Yuan attends the opening bell at Nasdaq as his company holds its IPO in New York. (AP Photo/Mark Lennihan, File)
Zoom CEO Eric Yuan attends the opening bell at Nasdaq as his company holds its IPO in New York. (AP Photo/Mark Lennihan, File)

Zoom says it now has 265,400 customers with more than 10 employees, a 354% increase year-over-year, and 769 customers paying more than $100,000 for the service.

The company, however, expects to see a larger amount of customer churn in the second half of the year, due to customers who purchased monthly subscriptions. It’s likely those are customers that will be able to return to work in their offices later this year.

Thanks to its ease of use, and free 40-minute chat sessions, Zoom quickly became the de facto chat platform for people around the world. But as its popularity exploded at the beginning of the pandemic, cybersecurity experts began warning that the company’s lax approach to security and safety were a major issue.

A laundry lists of issues

Zoombombing, in which random users would crash Zoom chat sessions and show images of vile content or scream curses, became such a problem that the New York City Department of Education banned the use of the platform for distance learning.

The company also didn’t enable password protection or a virtual lobby by default for every chat, which allowed unwanted users to join, and was sharing data with Facebook. Video chats were also being routed through China, which raised the prospect that the Chinese government would be able to access recordings of users’ chats.

This article was originally posted on finance.yahoo.com/news/.
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