Zoom Video Communications, Inc., the provider of video-first unified communications – and a daily tool for businesses across the world – has today announced financial results for the fourth quarter, which ended on January 31, 2021.
Total revenue for the quarter was $882.5m, up 369% year-over-year – and total revenue for the fiscal year was $2.65bn, up 326% year-over-year.
Eric S. Yuan, Founder and Chief Executive Officer of Zoom said: “The fourth quarter marked a strong finish to an unprecedented year for Zoom. In FY2021, we significantly scaled our business to provide critical communications and collaboration services to our customers and the global community in response to the pandemic. 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.
“As we enter FY2022, 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.”
Drivers of total revenue included acquiring new customers and expanding across existing customers.
At the end of the fourth quarter of fiscal year 2021, Zoom had approximately 467,100 customers with more than 10 employees, up approximately 470% from the same quarter last fiscal year.
Zoom also provided an outlook for the current fiscal year, and expects to report revenues between $3.76bn and $3.78bn.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown shared her thoughts with Business Leader, and believes that even though Zoom has published marvellous results for, could fatigue kick in over the next year?
These zooming marvellous results demonstrate once again how this Silicon Valley upstart has become the global icon for video conferencing during the pandemic. Zoom’s net income rose to $260.4 million for the fourth quarter up from $15.3 million during the same period a year ago, a startling 17-fold increase.
Revenue came in significantly higher than expected at $882.5 million for the quarter compared to $188.3 million a year ago. Users once again came flocking to the platform for work, study and play as fresh lockdowns were imposed in many parts of the world. What particularly grabbed attention though was management’s forecasts for Q1 2021 of revenue between $900 million and $905 million, which again exceeded expectations.
The fact that ‘to zoom’ has become part of our lockdown lexicon is testament to the brand’s strength. Although Zoom’s performance so far has shot past forecasts, suggesting concerns about zoom fatigue may be overblown, it is still unclear how many stay at home habits will linger once the world stops relying on virtual meetings for work conferences or social get-togethers.
The working from home trend is unlikely to completely unravel but the extent to which it’s merged into corporate life could determine the robustness of Zoom’s business model, its future prospects and its heady valuation of $108 billion.
The share price has dipped from October’s lofty highs of $559, but it’s still almost quadruple the level it was at the start of the pandemic, boosted by a 9.6% rise, in expectation of some bumper numbers. Zoom’s share price surged again in after-hours trading by another 9%.
It may be that we have become so used to pandemic habits that we will stick with our virtual social lives, particularly for long distance friendships and work relationships. But just how large a slice of the live video pie Zoom manages to hang on to will depend on how it matches up to its powerful rivals.
Although it stole an early march on other players in the first few months of the crisis, it does now have much stiffer competition from the likes of Microsoft and Google who have significantly upped their game.
The market’s heart has gone boom over zoom but just how long the love affair lasts will depend on whether it can keep its users attracted to the platform.