Brief Overview on Company’s Performance: Zoom Video Communications, Inc. (NASDAQ:ZM)

On 13 September 2019, Zoom Video Communications, Inc. (NASDAQ:ZM) shares price traded between $78.27 and $82.30 during the last trading session upbeat/downbeat with -3.29% at $78.85. The shares recorded trading volume 1,416,802 shares as compared to its average volume of 2,180,577 shares.

Zoom Video Communications (ZM) recently reported financial results for the quarter ended July 31, 2019.

Second Quarter Fiscal 2020 Financial Highlights:

  • Revenue:Total revenue for the quarter was $145.8M, up 96% year-over-year.
  • Income from Operations and Operating Margin:GAAP income from operations for the quarter was $2.3M, contrast to $3.4M in the second quarter of fiscal 2019. After adjusting for stock-based compensation expense and related payroll taxes, non-GAAP income from operations for the second quarter was $20.7M, up from $4.5M in the second quarter of fiscal 2019. For the second quarter, GAAP operating margin was 1.6% and non-GAAP operating margin was 14.2%.
  • Net Income and Net Income Per Share:GAAP net income attributable to ordinary stockholders for the quarter was $5.5M, or $0.02 per share, contrast to GAAP net income attributable to ordinary stockholders of $0.5M, or $0.00 per share in the second quarter of fiscal 2019.

    Non-GAAP net income for the quarter was $24.0M, after adjusting for stock-based compensation expense and related payroll taxes and undistributed earnings attributable to participating securities, and non-GAAP net income per share was $0.08. In the second quarter of fiscal 2019,  non-GAAP net income was $4.9M, or $0.02 per share. The non-GAAP weighted average share count has been adjusted to reflect the shares of Class A ordinary stock issued in connection with the Initial Public Offering (IPO), including the concurrent private placement, that are outstanding as of the end of the period as if they were outstanding as of the starting of the period for comparability.

  • Cash: Total cash, cash equivalents, and marketable securities as of July 31, 2019 were $755.3M.
  • Cash Flow:Net cash provided by operating activities was $31.2M for the quarter, contrast to $14.4M in the second quarter of fiscal 2019. Free cash flow was $17.1M, contrast to $8.2M in the second quarter of fiscal 2019.

Consumer Metrics: Drivers of total revenue include acquiring new consumers and expanding across existing consumers. At the end of the second quarter of fiscal 2020, Zoom had:

  • About 66,300 consumers with over 10 employees, up about 78% from the same quarter last year.
  • 466 consumers contributing over $100,000 in trailing 12 months revenue, up about 104% from the same quarter last year.
  • A trailing 12-month net dollar expansion rate in consumers with over 10 employees above 130% for the 5th consecutive quarter.

Financial Outlook: Zoom is providing the following guidance for its third quarter fiscal 2020 and its full year fiscal 2020.

  • Third Quarter Fiscal 2020: Total revenue is predictable to be between $155.0M and $156.0M and non-GAAP income from operations is predictable to be between $6.0M and $7.0M. Q3 non-GAAP EPS is predictable to be about $0.03 with about 294M non-GAAP weighted average shares outstanding.
  • Full Year Fiscal 2020: Total revenue is predictable to be between $587M and $590M and non-GAAP income from operations is predictable to be between $42M and $45M. Full year non-GAAP EPS is predictable to be about $0.18 to $0.19 with about 293M non-GAAP weighted average shares outstanding.

ZM has price to book ratio of 25.44 and price to cash ratio of 30.13. The average true range of the stock is observed at 4.33 and the relative strength index of the stock is recorded at 30.53.

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