Zendesk shares rise on better-than-expected quarterly revenue

Zendesk shares rise on better-than-expected quarterly revenue

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Share in customer service and sales software provider Zendesk Inc. were up slightly in late trading after reporting better-than-expected revenue in its latest earnings report.

For the quarter ending March 31, Zendesk reported a non-generally accepted accounting principle net income of $15.1 million or 12 cents per share compared to $21.4 million or 18 cents per share in the same quarter last year. Revenue came in at $388 million, up 30% year-over-year.

Analysts had expected non-GAAP EPS of 14 cents on revenue of $384.61 million.

Highlights in the quarter saw Zendesk securing new larger customers and expanding its business with existing customers. Customers that generate under $250,000 in annual recurring revenue now account for 39% of Zendesk’s ARR, with customer accounts under $250,000 growing 41% year-over-year. Zendesk customers with under $1 million ARR have increased to 140, up 65% compared to the same quarter of last year.

“Our continued push into enterprise, coupled with customers’ ongoing adoption of Zendesk Suite, is building a stronger foundation for our business long-term,” Mike Svane (pictured), chief executive officer of Zendesk, said in a letter to shareholders. “We continue to invest to advance our move upmarket that ultimately drives bigger deals, stickier customer relationships and better visibility for revenue growth and profitability long-term.”

Looking forward, Zendesk said that it expected a non-GAAP operating income in the range of $18 million to $24 million in the quarter ending June 30 on revenue of $1.685 billion to $1.71 billion. Analysts had predicted a figure of $1.69 billion.

Shares in Zendesk were up 1.73% after the bell to be sitting at $122.50 as of 8 p.m. EDT.

Zendesk’s latest earnings come after the company was rumored to have hired an advisory firm to explore a potential sale, some two months after rejecting a private equity takeover.

It was reported that Zendesk had hired Qatalyst Partners to explore sales opportunities and that the company had already reached out to potential buyers, including software companies and private equity firms. A final decision as to whether Zendesk would be sold had not been made as of the time of the report.

The potential move by Zendesk to sell itself came after it failed in an attempt to acquire to Momentive Global Inc., the company behind SurveyMonkey, for $4.1 billion. The acquisition, announced in October, collapsed in February after Zendesk shareholders rejected the deal.

Photo: TechCrunch/Flickr

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