Despite a few bumps in the road, Zoom has once again accelerated its incredible 2020 growth, beating analysts’ high expectations.
Profits more than doubled and total revenue reached $663.5m in Zoom’s most recent quarter, carried on a surge of interest in video-conferencing tools amid the coronavirus pandemic.
Zoom’s earnings for the second quarter of fiscal year 2021 marked a 355pc year-on-year jump in revenue.
In the three-month period ending 31 July, Zoom saw a phenomenal increase in demand for its service. Earlier this month, an analyst’s note from RBC citing data from app intelligence firm Sensor Tower claimed the average number of monthly active Zoom users last quarter was 148.4m – a staggering 4,700pc increase on the same period last year.
While a substantial service is available to users for free, Zoom has evidently succeeded in attracting paying customers on its various subscription plans. The company said it has more than doubled the number of customers contributing more than $100,000 in trailing 12 months revenue.
‘Organisations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere, and connecting anywhere’
– ERIC YUAN
The company has also come under scrutiny amid its new-found popularity. While ‘Zoom’ has almost become the go-to term for a video call, the platform has also inspired new phrases to enter the modern lexicon. ‘Zoombombing’, a practice of invading insecure Zoom calls and even sharing intrusive content using the share screen function resulted in stronger encryption and increased default privacy settings, while ‘Zoom fatigue’ has become the latest workplace hazard to avoid.
Zoom acquired Keybase to beef up security in May and, the following month, under pressure from privacy advocates, Zoom announced that it would bring end-to-end encryption to all customers, but reputational damage had been done. Security concerns alongside a lawsuit over sharing data with Facebook and questions raised about the company’s ties to China led to some organisations (including the Irish Revenue Commission) warning staff against using the platform.
However, the backlash has not been enough to dent Zoom’s rocketing success. Analyst expectations for the most recent quarter weren’t ambitious enough, forecasting around half a billion dollars in revenue.
On the back of this latest earnings call, founder and CEO Eric Yuan announced that Zoom’s revenue forecast for the full fiscal year has been raised to more than $2.37bn, anticipating an annual increase of more than 280pc for the company.
“Organisations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere, and connecting anywhere on Zoom’s video-first platform,” said Yuan. “At Zoom, we strive to deliver a world-class, frictionless and secure communication experience for our customers across locations, devices and use cases.”
In March, confusion saw shares increase for two companies named Zoom as investors rushed to back the service powering the remote working shift. However, the video platform has now firmly planted itself in the minds of investors with a 25pc increase in shares following the earnings announcement, closing at $325.10 on Monday, 31 August.