Video conferencing firm Zoom Video Communications Inc (NASDAQ:ZM) said it is doubling its full-year sales forecasts as the coronavirus lockdown led to a surge in users alongside rocketing demand for remote meeting software as thousands of people transitioned to working from home.
In its first quarter results on Tuesday, the company said it now expects revenues for its current year to be between US$1.78-US$1.8bn compared to prior forecasts of US$905-US$915mln, adding that it now has around 265,400 customers with more than 10 employees, a year-on-year increase of almost fourfold.
Zoom is also forecasting full-year adjusted earnings of US$1.21-US$1.29 per share, up from its previous guidance of US$0.42-US$0.45.
The upgraded forecasts followed a boom for the firm in its first quarter, which saw its net income rocket to US$27mln from less than US$200,000 a year ago while revenue surged 169% to US$328.2mln.
However, the company’s success was not without some snags as its cost of revenue in the quarter rose sharply 330% to US$103.7mln, pushing its gross margins down to 68.4% from 80.2% a year ago.
The surge has demand has meant Zoom has required more data centres and bandwidth to deal with the influx of conference calls, increasing its spending. However, the company said it is planning to expand its own data centre estate in an effort to relieve the pressure on margins.
Zoom’s shares rose 0.9% to US$210 in pre-market trading in New York on Wednesday.