Zoom boom rolls on over to Q3 2021

Zoom Video Communications has released third fiscal quarter results that rebut any lingering doubts regarding the collaboration technology provider’s future beyond the mass roll-out of vaccinations and lower Covid infection rates.

For the quarter ending 31 October 2021, the company posted total revenue of $1.051bn, up 35% compared with the same quarter a year ago, six months into the Covid lockdowns in major countries.

GAAP income from operations for the third quarter was $290.9m, up from $192.2m in the third quarter of fiscal year 2021. After adjusting for stock-based compensation expense and related payroll taxes, and acquisition-related expenses, non-GAAP income from operations for the third quarter was $411.3m, up from $290.8m in the third quarter of the previous fiscal year 2021. For the third quarter, GAAP operating margin was 27.7% and non-GAAP operating margin was 39.1%. GAAP net income was $340.3m, a solid improvement on the $198.4m reported at the same time a year ago.

Drivers of total revenue in the quarter included clear success in acquiring new customers and expanding across existing customers. At the end of the third quarter of fiscal year 2022, Zoom had 2,507 customers contributing more than $100,000 in trailing 12-month revenue, up approximately 94% from the same quarter in the past fiscal year. It now has approximately 512,100 customers with more than 10 employees, up approximately 18% from the same quarter last fiscal year, and the company reported a trailing 12-month net dollar expansion rate in customers with more than 10 employees above 130% for the 14th consecutive quarter.

Assessing the company’s performance in the quarter and observing trends revealed in the three-month period where companies were testing a return to the office, Zoom founder and CEO Eric S. Yuan bullishly remarked that the company was well on its way to becoming an “indispensable platform” for enterprises, individuals and developers to connect, collaborate and build in the flexible hybrid world of work.

“In Q3, we held our premier user event, Zoomtopia, on our Zoom Events service. During this immersive, multi-track conference, we showcased how Zoom is placing people at the centre of our communications platform, connecting their disparate work streams into our technology, moving beyond enterprises’ ability to collaborate internally, and empowering them to communicate face-to-face with their customers,” he added.

“We also showcased innovations such as hot-desking, whiteboarding and smart gallery, all designed to empower both colocated and remote hybrid workforces,” said Yuan. “Through innovation and dedication, we will continue to deliver happiness to our customers. We believe our global brand, innovative technologies and large customer base position us well for the future.”

Going forward, Zoom expects to close the fiscal year with between $4.079bn to $4.081bn in total revenue, representing approximately 54% year-over-year growth, alongside what it expected to be “strong” profitability and operating cash flow growth.

Non-GAAP income from operations is expected to be between $1.598bn and $1.6bn, while non-GAAP diluted EPS is expected to be between $4.84 and $4.85, with approximately 306 million non-GAAP weighted average shares outstanding. For the fourth quarter, Zoom believes it will generate revenue of $1.053bn and non-GAAP income from operations between $361m and $363m.