Zoom outlook: Profit, sales projections raised, shares surge

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Zoom Video Communications raised its profit and sales forecast for the fiscal year, a positive sign for the software maker’s plan to expand products beyond its namesake videoconferencing software.

Shares gained about 7 per cent in extended trading.

Revenue for the year ending in January 2024 will be as much as $4.5bn, the company said Monday in a statement.

In May, Zoom projected annual sales of about $4.48bn.

Yearly earnings of Zoom

Annual earnings, excluding some items, will be $4.63 to $4.67 a share, compared with a previous forecast of $4.25 to $4.31. Analysts, on average, estimated $4.32 a share.

Investors have been concerned about the stagnation of Zoom’s once-explosive sales as the company is challenged by major competitors, such as Microsoft, for its central product.

Zoom’s plan to resuscitate growth hinges on expanding its tools for large businesses, such as phone platforms, customer service systems, calendar applications and chat features, fuelled by advancements in artificial intelligence (AI). It has invested in AI startup Anthropic and announced it would acquire workplace communication tool Workvivo.

Shares jumped to a high of $74.50 in extended trading after closing at $67.27 in New York. The company has missed out on a major tech rally, with the stock declining about 1 per cent this year.