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Zoom Video Shares Up 4% On Q1 Results, Outlook

Shares of Zoom Video Communications (ZM) gained 4% on extended session Tuesday after the video conferencing software company reported a first-quarter results that trumped Wall Street estimates and issued a outlook for the second and full year 2021 that is expected to beat current expectations.

First-quarter net income rose to $27.0 million or $0.09 per share from $0.2 million or break even per share last year. On an adjusted basis, earnings were $0.20 per share, up from $0.03 per share last year. Total revenues for the quarter surged 169% to $328.2 million.

Analysts polled by Thomson Reuters estimated earnings of $0.09 per share and revenues of $202.48 million.

Drivers of revenue include acquiring new customers and expanding across existing customers, the company said in a statement. At the end of the first quarter, Zoom had about 265,400 customers, up around 354% from last year.

"We were humbled by the accelerated adoption of the Zoom platform around the globe in Q1. The COVID-19 crisis has driven higher demand for distributed, face-to-face interactions and collaboration using Zoom. Use cases have grown rapidly as people integrated Zoom into their work, learning, and personal lives," said Eric S. Yuan, Founder and Chief Executive Officer of Zoom."

The company has benefited from the lock down and stay-at-home initiatives enforced due to the coronavirus pandemic. More and more people are now downloading the company's remote-work tools including videoconferencing app as the virus continues to spread. Zoom, which went public last year, has surged over 200% for the year-to-date period, to lift its market capitalization to $58.67 billion.

Looking forward to the second quarter, Zoom sees revenues of $495.0 million to $500.0 million and adjusted earnings of $0.44 to $0.46 per share. Analysts currently estimate earnings of $0.11 per share and revenues of $223.32 million.

For the full year 2021, revenues is expected to be between $1.775 billion and $1.800 billion and adjusted earnings of $1.21 to $1.29 per share. Analysts currently estimate earnings of $0.45 per share and revenues of $934 million.

ZM closed Tuesday's trading at $208.08, up $3.93 or 1.93%, on the Nasdaq. The stock further gained $8.32 or 4.00% in the after-hours trading.

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