Zoom rockets on back of global lockdown
Homeworking has encouraged the use of teleconferencing
A surge in homeworking around the world has seen revenue and customer forecasts rocket at Zoom Video Communications, a company few had heard of three months ago.
The teleconferencing company, based in San Jose, California, has seen its prospects transformed following the global lockdown. It nearly doubled its expectations for annual sales, from about $905m to $1.8bn
The latest quarterly report shows the company now has about 265,400 customers with more than 10 employees, a near fourfold increase from a year earlier. Zoom’s shares have more than tripled this year.
It reported fiscal first-quarter revenue of $328.2 million, beating analysts’ estimates of $202.7m, according to IBES data from Refinitiv.
But Zoom’s costs also rose sharply, and executives said gross margins would likely remain below Zoom’s historical norms in the coming quarters, sending shares down 3.5% to $200.75 in after-market trading.
There were also possible signs the Zoom boom may be slowing as economies reopen. Chief Financial Officer Kelly Steckelberg said the April peak usage of 300 million daily meeting participants declined slightly in May.
The company also had to deal with privacy and security issues, prompting it to roll out major upgrades.
Zoom competes with Cisco Systems’ Webex, Microsoft’s Teams and Google’s Meet platform for paying customers, particularly enterprises, while offering a free version to consumers.