Video conferencing company Zoom has reaped the benefits of mandatory work-from-home orders and cancelled events throughout 2020. It just closed out a record fiscal year with its third straight quarter of over 300 percent growth.
Following a year in which the world was essentially homebound and its corporate name became part of the modern lexicon, Zoom Video Communications reported fourth quarter revenues on Monday of $882.5 million, as well as total year-end revenues of $2.65 billion — a whopping 326 percent increase from the previous year. Zoom’s fiscal year ends on January 31. Its ubiquity has also been felt throughout the event industry as nearly all virtual platforms use it or integrate with it to provide live streaming.
The results exceeded expected revenues of between $2.575 billion and $2.580 billion. The strong showing has helped reassure investors of Zoom's continued value following some concerns about what the vaccine could mean for the future of video conferencing.
In addition, Zoom has added another 33,400 customers with more than 10 employees, bringing its total up to 467,100, which marks a 470 percent increase from the same quarter in fiscal year 2020.
The company ended the fiscal year with a total net profit of $672 million, up from only $222 million at the end of 2019. Zoom's stock fell steadily last week, but it rose 9.65 percent during the day on Monday and was up another 10 percent in after-hours trading at the time of this writing.
The company is anticipating an even stronger fiscal year to come, with an expected total revenue of as much as $3.8 billion for technically what it calls its fiscal 2022.
Looking Past the Pandemic
Zoom has become a household name over the past year, but questions remain about its long-term viability as people slowly return to work and live events begin to resume. However, demand for its products is still strong, and the company is taking steps to ensure that it stays that way moving forward.
In January, the company completed a second public offering of its shares, through which it was able to raise an additional $2 billion.
It has indicated that it plans to use the proceeds for "working capital and general corporate purposes," which include marketing and R&D. In addition, it may also use a portion of the net proceeds "to acquire or invest in businesses, products and technologies that are complementary to [their] own, although [they] have no current commitments or agreements with respect to any acquisitions or investments."
Zoom has also been focused on diversifying its current product offerings and adding value to its customers. In January, the company announced having sold one million seats of Zoom Phone, its VoIP phone service, which supports both remote and in-person teams. It has also recently released Zoom Rooms innovations to help support a safe return to the workplace.
Eric S. Yuan, Zoom founder and CEO, noted that going into fiscal year 2022, "we believe we are well positioned for strong growth with our innovative video communications platform, on which our customers can build, run, and grow their businesses; our globally recognized brand; and a team ever focused on delivering happiness to our customers.”
While it may be difficult for event planners to reconcile this happiness with the ongoing battle with Zoom fatigue, the investment in R&D and potential enhancements to the platform can only spell good things for virtual events going forward.