As the second-quarter earnings and earnings were both higher than analysts’ expectations, on Tuesday, local time, the stock price of video conferencing software company Zoom soared by nearly 41%, bringing the company’s market value to US$129 billion .
At the close of trading on Tuesday, the company’s stock price rose by US$132.59 to close at US$457.69, an increase of 40.78%.
The company had an initial public offering (IPO) in April 2019, and its market value was approximately US$16 billion as of the close of the listing day. The stock price rose sharply this Tuesday, increasing the company’s market value by $37 billion.
According to data from Refinitiv, Zoom’s second quarter revenue was $663.5 million, a year-on-year increase of 355%. Previously, analysts had predicted that Zoom’s second-quarter revenue would be $505 million. Adjusted earnings per share for the second quarter were 92 cents, more than twice the analyst’s forecast of 45 cents per share. Zoom’s net profit in the second quarter was more than three times the sum of its profits in the past six quarters.
The number of customers that contributed more than US$100,000 in revenue to Zoom has grown to 988, which is a doubling of the same period last year. Zoom CEO Yuan Zheng stated on the earnings call that Exxon, video game developer Activision and ServiceNow are all Zoom customers.
Yuan Zheng said that as the new crown virus epidemic continues, Zoom will work hard to play a role in global communications during this challenging period.
Zoom also raised its performance expectations for the entire fiscal year 2021. Revenue is expected to reach US$2.37 billion to US$2.39 billion. This means that the median annual revenue growth rate will reach 282% year-on-year, which is better than analysts’ revenue expectations of $1.81 billion.
Zoom is now one of the 20 most valuable technology companies in the United States. Its market value is now higher than that of IBM and more than twice that of VMware.
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