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MW UPDATE: Zoom earnings roared to nearly $1 billion in 2020, and the stock is rising again

By Jon Swartz and Jeremy C. Owens

Shares gain 5% in after-hours trading after Zoom detailed the year of pandemic-influenced gains that made it a household name for users and investors -- adjusted earnings grew by almost 10x, while adding $2 billion in revenue

Zoom Video Communications Inc.'s rip-roaring ride resumed its meteoric trajectory Monday, with shares jumping as the company detailed the results of becoming a lifeline for those stuck at home due to the COVID-19 pandemic: Booming profit and revenue.

The video-communications company (ZM) reported fourth-quarter net income of $260.4 million, or 87 cents a share, compared with net income of $15.3 million in the year-ago quarter. After adjusting for stock-based compensation and other factors, Zoom reported earnings of $1.22 a share, up from 15 cents a share a year ago.

Revenue hurtled 369% higher to $882.5 million from $188.3 million a year ago. Analysts surveyed by FactSet had expected adjusted earnings of 79 cents a share on revenue of $812 million.

Overall for the fiscal year, Zoom reported adjusted profit of nearly $1 billion -- $995.7 million -- after barely clearing $100 million in adjusted earnings in the previous year, at $101.3 million. The company added more than $2 billion in revenue, growing to $2.65 billion from sales of $622.7 million the year before.

Zoom became a household name as the COVID-19 pandemic forced lockdowns across the globe, and shares exploded higher early in 2020, but seemed to hit a ceiling in the fall and have come back down steadily since. A steep rise in coronavirus cases during and after the holidays intensified business restrictions and forced many workplaces to reconsider reopening in 2021, however, leading to renewed use of Zoom's services.

"The fourth quarter marked a strong finish to an unprecedented year for Zoom," Zoom Chief Executive Eric Yuan said in a statement announcing the results.

Zoom shares gained nearly 10% in after-hours trading Monday after the results were announced, after increasing 9.7% in the regular session to $409.66, the stock's biggest one-day gain since November. The stock has gained 255% in the past year, but declined 10.5% in the past six months. The broader S&P 500 index has climbed 26% in the past year and 8.1% in the past six months.

-Jon Swartz; 415-439-6400; AskNewswires@dowjones.com

$(END)$ Dow Jones Newswires

March 01, 2021 16:24 ET (21:24 GMT)

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