Zoom Reports Slowing Growth, but This Stock Is Monday's Real After-Hours Winner

February came to a close on a mixed note for Wall Street, with investors struggling to deal with all the uncertainty present in the stock market right now. The Dow Jones Industrial Average (^DJI 0.67%) and S&P 500 (^GSPC 0.87%) weren't able to claw back all their early losses, but the Nasdaq Composite (^IXIC 1.11%) managed to post a gain on the day.

Data source: Yahoo! Finance.

Many investors were looking forward to the after-hours session to see how 2020 growth darling Zoom Video Communications (ZM 0.15%) would fare after releasing its latest financial results. In the end, Zoom's stock didn't make huge moves, instead giving way to a stock in the biotech industry to lead the way higher. Below, we'll first talk about Zoom's quarterly report, and then we'll reveal the big winner in Monday's after-hours session.

Zoom stays solid, but growth slows

Shares of Zoom Video Communications dropped less than 1% in after-hours trading as of 6 p.m. EST, giving back some of its 5% rise from the regular session. Zoom's fourth-quarter financial results showed ongoing growth, but at a pace that continued to slow significantly from what investors got used to seeing during the worst days of the COVID-19 pandemic.

Image source: Zoom Video Communications.

Zoom's numbers told a story of slowing growth that many high-growth tech companies have experienced. Revenue in Q4 was $1.07 billion, up 21% year over year. Adjusted net income was up as well, but only by 8% to $394 million. That worked out to adjusted earnings of $1.29 per share, which fell short of what investors had hoped to see. Those growth rates were much slower than Zoom's full-year gains, with fiscal 2022 sales jumping 55% to $4.1 billion and adjusted earnings of $5.07 per share up by more than half from year-earlier levels.

Zoom's key metrics were also mixed. The company had 2,725 customers paying $100,000 or more in annual revenue, up 66% from 12 months ago. However, total customer counts of businesses with more than 10 employees were up just 9% year over year to just under 510,000. Moreover, Zoom said it would phase out reporting of some of its past metrics, instead making substitutions that it sees as more reflective of what its management uses to evaluate the business.

Perhaps most worrisome was full-year fiscal 2023 revenue guidance for between $4.53 billion and $4.55 billion, which would be up just 10% to 11% from fiscal 2022's final number. Without substantial future growth, investors are reevaluating how they perceive Zoom's future.

Atea moves higher

The big gainer in Monday's after-hours session was Atea Pharmaceuticals (AVIR -1.34%). The small-cap biotech jumped 18% after reporting its Q4 financials and providing a key business update.

Atea generated considerable sales and profit from its collaboration with industry partner Roche. Revenue for Q4 came in at $192 million, quadruple its year-earlier sales. Earnings of $1.34 per share were up from just $0.25 per share in the previous year's period.

However, the big question for Atea is what happens next. Roche and Atea terminated their license agreement in November 2021, which means that the small-cap biotech can't count on any future cash inflows. With $764 million in cash on the balance sheet, though, Atea has more than three years' worth of cash based on its $213 million in operating expenses for the full 2021 year.

In its business update, Atea revealed it's looking to make progress with three phase 2 trials for patients with COVID-19, HCV, and dengue fever. That leaves plenty of unanswered questions, and the stock is still down sharply from where it was before Roche's decision to pull out of its collaboration. Still, shareholders are pleased that Atea has put itself in the best possible position to make it through this transition period successfully.