Adjusted operating income is expected to be at least $1.425 billion this year (which would work out to a 36% operating profit margin). Zoom itself already benefits from this with its cloud-based software-as-a-service operation. Replacing business meetings with video is a time and resource saver, and there are still thousands of organizations around the globe that have yet to make the jump to the remote work-first model. Sure, COVID-19 was a positive catalyst for Zoom, but it merely accelerated adoption of video conferencing. I believe the reason for Zoom's success - and its enduring growth story - is more about how efficient video communications are and less about the pandemic. An incredibly efficient cloud communications business The more than 30,000 new customers with over 10 employees it's been adding in each of the last few quarters speaks to the fact that video conferencing will likely be an important part of business operations going forward. Not only is Zoom holding on to most of its new pandemic-era customers, it's still forecasting a more than respectable rate of expansion. This looming slowdown has more to do with the company lapping results from a year ago when revenue was growing more than 300%. ![]() Zoom is still a high-growth company, though. Given shares now trade for some 24 times full-year 2022 sales, this is no cheap cloud computing stock. Zoom's management often underpromises and overdelivers, but the current guidance nevertheless indicates growth will dip below 50% later this year. ![]() However, full-year growth of 50% implies a massive slowdown from the 191% year-over-year rate just posted in Q1. ![]() At any other time this would be great news. The outlook for full-year fiscal 2022 was also upgraded, now implying full-year revenue growth of about 50% to a range of $3.975 billion to $3.990 billion (a more than $200 million increase over prior expectations for fiscal 2022 provided three months ago).
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