By Jaspreet Singh
(Reuters) -Zoom Video Communications forecast third-quarter profit above Wall Street estimates on Monday, a positive sign for the company that has tried to overcome a post-pandemic slowdown by offering a wider range of collaboration tools.
Shares of the video-conferencing platform rose nearly 4% in trading after the bell.
"Solid improvement in earnings outlook on what we assume will be opex (operating expense) efficiencies is driving the stock a notch in response," Needham and Co analyst Ryan Koontz said.
Video conferencing platforms including Zoom, Microsoft (NASDAQ:MSFT)'s Teams and Cisco (NASDAQ:CSCO)'s Webex among others became household names during the pandemic as businesses and individuals turned to them for connecting with employees and friends.
The San Jose, California-based company expects adjusted profit per share between $1.07 and $1.09 for the third quarter, above analysts' average estimate of $1.03, according to Refinitiv data.
Zoom expects third-quarter revenue between $1.115 billion and $1.120 billion for the quarter, compared with analysts' average estimate of $1.13 billion, according to Refinitiv data.
"There are a lot of new products on the table, of which none appear to be major contributors to revenue growth yet," Koontz added.
Revenue for the quarter ended July 31 rose 3.6% to $1.14 billion, above analysts' average expectations of $1.12 billion.
Excluding items, the company posted second-quarter profit of $1.34 per share, compared with target estimate of $1.05.
Second-quarter enterprise revenue of the company rose 10.2% to $659.5 million. It added about 218,100 enterprise customers, an increase of 6.9% from a year earlier.
"Our increased total revenue guidance reflects a consistent view on enterprise," CFO Kelly Steckelberg said.
Zoom raised its annual revenue forecast to between $4.49 billion and $4.50 billion, compared with its earlier forecast of between $4.47 billion and $4.49 billion.
It also raised its annual adjusted profit per share to between $4.63 and $4.67, compared with an earlier projection of between $4.25 and $4.31.