By Maria Armental

 

Zoom Video Communications Inc.'s revenue surged to nearly $900 million in the latest period and the company projected $3.76 billion to $3.78 billion in sales this year, driven by the shift to remote work and distance schooling to help curb the Covid-19 pandemic's spread.

But operating costs for the quarter and year ended in January also surged as the videoconferencing company expanded capacity to meet the demand surge, including from free accounts like school districts, which weighed on margins.

Overall, Zoom's fourth-quarter profit after undistributed earnings attributable to participating securities rose to $260.4 million from $15.3 million a year earlier. On a per-share basis, profit rose to 87 cents, or $1.22 on an adjusted basis.

Revenue for the quarter rose to $882.5 million from $188.3 million a year earlier.

The results beat Wall Street targets and Zoom's financial projections.

Zoom ended the year with about 467,100 customers with more than 10 employees, a nearly six-fold increase from the year earlier. In October, it reported about 433,700 such customers. Meanwhile, the number of its most lucrative customers, those paying more than $100,000 a year, more than doubled from the previous year, the company said.

The videoconferencing company, which started trading in the public markets in 2019, has been one of the biggest corporate winners from the shift to remote work and distance schooling, pitting it against larger rivals like Microsoft Corp.

The company has also faced stricter regulatory and legal scrutiny over access and storage of user data, for example, including its use of servers outside of the U.S.

Zoom ended the year at a profit of $671.5 million on $2.65 billion in revenue, compared with $21.8 million in profit and $622.7 million in revenue a year earlier.

This year, it expects $3.59 to $3.65 a share in adjusted profit and $3.76 billion to $3.78 billion in revenue, ahead of analysts' projections, according to FactSet.

"In FY2021, we significantly scaled our business to provide critical communications and collaboration services to our customers and the global community in response to the pandemic," Chief Executive Eric Yuan said in a statement. "As we enter FY2022, we believe we are well positioned for strong growth with our innovative video communications platform, on which our customers can build, run, and grow their businesses."

 

Write to Maria Armental at maria.armental@wsj.com

 

(END) Dow Jones Newswires

March 01, 2021 16:36 ET (21:36 GMT)

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