Zoom Video Communications Inc. raised its full-year sales forecast in a positive sign for the software maker’s effort to continue growing in a post-pandemic world.
Revenue for the fiscal year ending in January 2025 will be $4.47 billion to $4.49 billion, the company said Monday in a statement. That’s up from an earlier outlook of about $4.44 billion. Zoom also raised its forecast for annual adjusted profit to $4.25 to $4.31 a share, compared with a previous forecast of $4.11 to $4.18 a share.
“Our customers see Zoom as mission-critical in how they collaborate internally and externally across the globe,” Chief Executive Officer Eric Yuan said in the statement. “This relationship with our customers helped us to exceed our guidance due to enterprise growth and stabilizing online revenue.”
Zoom, which burst into public consciousness during the height of the pandemic, is fighting to reverse a slowdown in growth for its video communications service by expanding its tools for business. The company said it had 3,580 customers contributing more than $100,000 in trailing 12-month revenue, an increase of 23% from the period a year earlier. Large businesses make up almost 60% of Zoom’s sales as it loses consumers and small businesses.
Still, turnover among casual users improved in the quarter, Chief Financial Officer Kelly Steckelberg said in prepared remarks. “Our online business improved meaningfully in the quarter as it benefited from many initiatives including the price increase and buy flow optimization,” she said.
The online business of consumers and small businesses should generate about $480 million in the current period and remain relatively unchanged thereafter, Steckelberg said in the remarks.
Zoom reported that fiscal first-quarter sales increased about 3% to $1.11 billion, topping estimates. The San Jose, California-based company said it had 215,900 enterprise customers in the period ended April 30, an increase of 9% from a year earlier and a gain of 2,900 from the previous quarter.
Profit, excluding some items, was $1.16 a share in the fiscal first quarter. Analysts, on average, estimated 99 cents a share.
The shares increased about 1% in extended trading after closing at $71.41 in New York. The stock has gained 5.4% this year, lagging behind most software peers amid continued concerns about customer churn and competition from Microsoft Corp. The ousting of high-profile sales President Greg Tomb in March fueled questions about the success of the company’s sales operation.
(Updates with enterprise revenue in the fourth paragraph.)
