Video conferencing company Zoom has continued to surpass earnings expectations in its fiscal first quarter, even as growth slows and it looks to build a sustainable path forward post-pandemic.
Zoom Video Communications experienced massive growth last year (its fiscal year 2021) throughout the pandemic, which decimated thousands of other businesses. The company released its fiscal first quarter 2022 earnings on Tuesday, reporting total revenues of $956.2 million — an increase of 191 percent year over year.
While these earnings yet again exceeded the company's revenue expectations for the first quarter — between $900.0 million and $905.0 million — they also demonstrate that growth is starting to slow for Zoom in a post-pandemic world. While 191 percent growth is certainly significant, it's the first quarter in a year in which Zoom hasn't reported an increase over the last quarter.
Zoom's stock was up about 3% after hours at the time of this writing after initially falling about 3% immediately following the announcement. Its net income for the quarter was $227.5 million, compared to only $27 million in the same period last year.
With this report, Zoom is increasing its total expected revenues for its fiscal year 2022 from $3.8 billion to between $3.975 billion and $3.990 billion, and it is anticipating revenues between $985.0 million and $990.0 million for the second quarter.
What's Next for Zoom and Zoom’s Role in B2B Events?
There has been a lot of uncertainty over the last few months around how Zoom and similar companies would fare once the pandemic came to an end. And while the company's growth was not as astronomical in the first quarter as it was throughout the last year, it still proved that it has been able to further expand its customer base and has solid plans for the future.
In the first quarter, Zoom continued to add customers with more than 10 employees — it now has 497,000, which is up about 87 percent from the same quarter last year — as well as 1,999 customers contributing more than $100,000 in trailing 12 months revenue, which represents a 160 percent increase from the same quarter last fiscal year.
Zoom has also recently created a $100 million Zoom Apps fund, with which it will invest in companies looking to develop new apps and integrations for the Zoom platform. This is an interesting approach that will allow startups to build products to enhance the Zoom user experience.
Last month, also Zoom announced the upcoming launch of its new event platform, Zoom Events, which will build out its previous OnZoom offering and add features such as event hubs and multi-session events. While Zoom Events doesn't appear to be particularly innovative as far as event platforms go, it will facilitate the organization of events for businesses already using the platform.
Eric S. Yuan, Zoom founder and CEO, said that Zoom is "energized to help lead the evolution to hybrid work that allows greater flexibility, productivity, and happiness to both in-person and virtual connections.”
The video conferencing giant is clearly optimistic about the future and hopes to power the future of work, which, like events, it believes will be hybrid. There is no question that many people will continue to work remotely at least part of time post-Covid, so although Zoom's days of 300+ percent growth are likely behind it, the company and its products will continue to serve an important purpose for the foreseeable future.