Even as Zoom exceeds expectations with rising year-on-year revenues, it faces a dramatic drop from the success of 2020.
By all accounts, Zoom had a stellar financial year in 2020. The company’s video-conferencing tool became a household name in a year afflicted by strict social distancing measures.
In its last quarterly results from the year defined by the Covid-19 pandemic, the Californian company reported year-on-year revenue growth of 369pc.
Now entering a new fiscal year for the company, Zoom’s year-on-year growth continues, though the rate has dramatically slowed.
For the quarter ended 30 April 2021, total revenue reached $956.2m, an increase of 191pc on the same period last year.
‘Work is no longer a place’
– ERIC YUAN
While the brakes are clearly on Zoom’s rocketing rise, CNBC reports that these latest earnings still beat expectations across the board.
Ongoing customer acquisition is driving continued annual growth along with growing revenue from existing customers. The company is approaching 500,000 clients with more than 10 employees, up 87pc year-on-year. And high-value customers – those contributing more than $100,000 in trailing 12 months revenue – are up 160pc.
Costs are also rising along with the number of users, up 155pc to $265m for the first quarter.
However, Zoom also reported strong profitability and cash flow, with net cash from operating activities more than doubling to $533.3m.
“Our steadfast commitment to empowering customers to work and learn from anywhere with our expansive, innovative and frictionless video-communications platform continued to drive our results. With this solid start, we are pleased to raise our total guidance range to $3.975bn to $3.99bn for the full fiscal year,” said Zoom founder and CEO Eric Yuan.
Within this expectation of a full-year’s revenue approaching $4bn, Zoom forecasts steady growth of between $985m and $990m in revenue next quarter. This is above Wall Street estimates, according to Reuters.
A place in the hybrid working future
Though Zoom’s comparative annual figures will eventually struggle to increase on 2020’s massive gains, the company is confidently facing into the future of work and remote meet-ups.
Within the reporting period, Zoom revealed a new $100m venture fund to invest in businesses building apps for the video-conferencing platform. More recently, the company announced its plans to launch an all-in-one platform for virtual event organisers, entering into competition with European unicorn Hopin.
In the video-conferencing space, Zoom continues to face competition from powerful rivals Microsoft, Cisco and Google. However, Yuan is confident that his company has secured its place in a hybrid working future.
“Work is no longer a place,” he declared. “It’s a space where Zoom serves to empower your teams to connect and bring their best ideas to life. We are energised to help lead the evolution to hybrid work that allows greater flexibility, productivity and happiness to both in-person and virtual connections.”