Zoom Video Communications’ third quarter revenue surged a whopping 367% from a year ago as the company now has 433,700 customers with more than 10 employees.
The company reported third quarter net income of $198.4 million, or 66 cents a share, on revenue of $777.2 million. Non-GAAP earnings for the third quarter were 99 cents a share.
Wall Street was expecting Zoom to report third quarter revenue of $694 million with non-GAAP earnings of 76 cents a share.
For the fourth quarter, Zoom is projecting revenue between $806 million and $811 million with non-GAAP earnings of 77 cents a share to 79 cents a share. For the fourth quarter, analysts were modeling revenue of $730 million and $2.4 billion for fiscal 2021.
Zoom sees strong demand ahead and said that revenue for fiscal 2021 will be between $2.57 billion and $2.58 billion.
CEO Eric Yuan said the company continued to strengthen its market position. “We aspire to provide the most innovative, secure, reliable, and high-quality communications platform to help people connect, collaborate, build and learn on Zoom,” he said.
Zoom ended the quarter with $1.9 billion in cash and equivalents. Zoom reported 1,289 customers contributing more than $100,000 in trailing 12 months revenue.
There were a few nits in the quarter. Notably, Zoom’s gross profit in the third quarter was 66.7%, down from more than 80% pre-pandemic. Gross margins have taken a hit from cloud computing costs as Zoom scales its service and fell from 72.2% in the second quarter. In addition, Zoom’s torrid growth from a year ago was only up 17% sequentially from the second. The sequential growth jump from the first to second quarters was 40%.
The company is aiming to leverage its momentum to become more of a platform and ecosystem. Last month at Zoomtopia, Zoom launched its platform play with Zoom for Apps, apps that are built into the video conferencing experience, an OnZoom, a marketplace for content creators. This year’s Zoomtopia, which was virtual due to the COVID-19 pandemic, highlighted how Zoom has become the go-to platform for remote work and education. Zoom supports more than 3 trillion annualized meeting minutes, and sees well over 300 million daily meeting participants.
Here’s a quick look at Zoom’s 2020:
