Connect with us
Financial Press


Zoom made as much money in three months as it did in all of 2019; stock jumps to a new record

Profit at the videoconferencing company was more than double that of expectations

Zoom Video Communications Chief Executive Eric Yuan took the videoconferencing company public in April 2019. The shares have more than quadrupled this year amid the COVID-19 pandemic.

Getty Images

Zoom Video Communications Inc. made as much money in May, June and July as it did in all of 2019, beating even the outsize expectations of Wall Street and sending its stock to a new record high.


has been one of the biggest tech beneficiaries of the COVID-19 pandemic, with its name becoming synonymous with videoconferencing at a time when the technology has become essential for businesses and families separated by shelter-in-place rules.

The company reported blowout earnings three months ago, and the stock — which began trading less than a year before the pandemic started — has skyrocketed, gaining more than 360% so far this year as the S&P 500 Index

has gained 10%.

That set up a tough task for Zoom in Monday’s earnings report, as expectations for another astounding financial update grew heated. Morgan Stanley analysts said ahead of the report that buy-side analysts expected Zoom to beat its own forecast by about 30%.

Zoom’s sales exceeded expectations by more than 32% Monday, easily hitting that mark, and profit was more than double what was expected. The company reported second-quarter net income of $185.7 million, or 63 cents a share, on sales of $663.5 million, more than four times the $146 million reported a year earlier. In 2019, Zoom reported net income of $101.2 million on sales of $622.3 million.

After adjusting for stock-based compensation and other effects, Zoom reported earnings of 92 cents a share, up from 8 cents a share.

Analysts on average expected adjusted earnings of 45 cents a share on sales of $500.3 million, according to FactSet, after Zoom’s executive team guided for adjusted earnings of 44 cents to 46 cents a share on sales of $495 million to $500 million in their previous earnings report.

For the third quarter, Zoom executives guided for adjusted earnings of 73 cents to 74 cents a share on revenue of $685 million to $690 million, and added roughly $600 million to its annual sales forecast and nearly doubling its guidance for full-year adjusted profit. Analysts on average had been modeling third-quarter adjusted earnings of 35 cents a share on sales of $491.8 million, according to FactSet.

Zoom shares closed higher than $300 for the first time Monday, rising 8.6% to a record $325.10 ahead of the earnings. Immediately following the release of the results, the stock jumped more than 5% in after-hours trading.

Written By

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles


My wife and I are both 57 and looking to retire at 62.  We will get approximately $1,700 a month each from Social Security. ...


The Conversation Published: Sept. 26, 2020 at 5:14 p.m. ET What do communities like “People of Praise” believe? President Donald Trump announces his Supreme...


NewsWatch Published: Sept. 26, 2020 at 5:00 p.m. ET MARKETWATCH FRONT PAGE Federal tax relief for new homeowners would help millennials and support prices,...


Economic Preview Published: Sept. 26, 2020 at 4:54 p.m. ET Despite improvement, the U.S. unemployment rate remains historically high and financial woes are just...