The Zoom’s 369% Growth!

The Zoom’s 369% Growth!

Zoom has reported a huge revenue increase for its recent fiscal year: “The video communication company documented a $2.65 billion revenue during the recent fiscal year, amounting to a 326 percent increase from the previous fiscal year. In the fourth quarter alone, revenue jumped by 369 percent to $882.5 million.” This is a pure redesign on how people and companies work, and remote-work and remote-everything may not go away. 

So companies like Zoom or digital-native companies may have moments ahead. But the most fundamental thing here is that covid-19 has just created a new industrial category which will not easily fade when things return to normal. 

As I noted in Harvard Business Review last month, it comes down to capturing value. Yes, despite the amalgam of competitors in this space, Zoom seems to be the main one that has figured out how to make money at scale, even well ahead of the giant called Google. Simply, America has created another dominant player in a new business category for the world! That seems to be their birth rights as the world now zooms.

“We are humbled by our role as a trusted partner and an engine for the modern work-from-anywhere environment. Our ability to rapidly respond and execute drove strong financial results throughout the year,” Eric Yuan, Zoom’s founder and chief executive officer, said in the statement.

Fortune in a newsletter explains what is happening here:

Zoom continues to skyrocket past all expectations nearly a year after the coronavirus pandemic helped its business shoot through the roof. And the company’s optimistic guidance seems to suggest that concerns of future slows may not be so big after all.

The company reported its fourth-quarter earnings on Monday, posting $882.5 million in revenue, up 369% year over year. That, by far, beat analysts’ expectations of $811.7 million in revenue for the quarter.

Zoom also reported that it expects to generate between $900 million and $905 million in revenue for the first quarter, well above analysts’ expectation of $804.78 million. The higher-than-expected guidance sent Zoom’s stock up more than 10% to $452 per share in after-hours trading.

The latest results wrap up a year of outperforming Wall Street’s expectations. Meanwhile, the company has been diversifying its revenue, reporting that its phone service, which allows people to make, receive, and route phone calls via the cloud, now serves more than 1 million users.

Zoom still appears to be the one to beat in video conferencing. On Monday, Zoom was the third top free app on the Google Play store and the sixth top free app on the Apple app store. The app has regularly snagged high rankings on both app stores throughout the year.

But other companies are still trying to give Zoom a run for its money. On Monday, for example, Google announced some new features including a new mobile view and the ability to join a meeting from multiple devices for its video conferencing service Google Meet. Meanwhile, Instagram debuted a live-streaming feature that has a Zoom-like appearance called Live Rooms, 10 months after Facebook’s Messenger rolled out its video conferencing product Messenger Rooms.

While Zoom’s leadership seems to ward off any suggestion of a major slowdown in the near future, you may wonder just how long Zoom’s big boom will last.

Some companies are already warning of possible decelerations as the COVID situation improves. For example, DoorDash, another company whose business was boosted by the pandemic, last week told investors that its food delivery service may slow in the next couple of quarters as more people get vaccinated and opt to eat out.

But Zoom may not experience the same kind of post-pandemic pressure. That’s because many companies have decided to allow their employees to work from home permanently or part-time. And Zoom has had several months to change consumer behavior, increasing people’s familiarity and dependency on its software—habits could well outlive the pandemic.

The issue boils down to this: Will you be Zooming post-pandemic? Because Zoom is betting on it.


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One thought on “The Zoom’s 369% Growth!

  1. The call conference sector has Zoom as its category-king, any other entity angling to get a big slice there will only get crumbs. You now ‘zoom’ conferences, same way you ‘google’ things. Some fights are not winnable, even when you offer all the freebies, you end up getting exasperated.

    It’s one winner per sector, plenty people can be fighting for second position anyway.

    America wins because it knows how to prop up value, create Zoom here, and your own people will never use it, nothing is new.

    Is there anything like Mhagic anywhere else? But Africans will wait for Silicon Valley guys to come in, before they pay attention.

    We are our own worst nightmares, not many things are truly sophisticated, it all depends on where you are on the equator.


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