Zoom rings in record year for revenue growth
Video platform vendor finishes strong year with a record haul in its fourth quarter
Zoom saw revenues reach $882.5m for its Q4, marking a record 369 per cent year-on-year surge for the company which has seen business boom as a result of the pandemic.
The video platform provider is also celebrating a record $2.6bn in revenues for the year ending 31 January 2021, which represents a 326 per cent jump on its previous financial year.
Founder and CEO Eric Yuan said that the results marked a strong finish to an unprecedented year for the company, which saw its users expand from its target business clientele to be used by families and friends to socialise online throughout the COVID-19 pandemic.
"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," stated Yuan.
"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 recognised brand, and a team ever focused on delivering happiness to our customers."
Zoom CFO Kelly Steckelberg also told analysts on a call that the company has ended the quarter with $4.2bn in cash and securities and is keen to spend some of it on M&A.
"We are certainly investing in building out more datacentre infrastructure, and we are constantly looking for opportunities for other interesting companies, potentially M&A activity, that could add either to our talent or our technology," she said on the call, transcribed by Seeking Alpha.
"Eric has a very high bar for both and so we just haven't quite found the right match yet, but we keep looking."
Though the worst of the pandemic is expected to ease throughout this year as vaccination rollouts continue globally, Zoom is optimistic that users will still be dependent on the platform as remote working habits are likely to stay.
It provided stronger guidance than analysts were expecting, anticipating that total revenue is expected to sit between $3bn and $3.7bn for its full-year 2022. This guidance caused Zoom's share price to jump as much as 10 per cent in after-hours trading.
Rufus Grig, chief strategy officer at comms provider Maintel, said it was "no surprise" that Zoom is benefitting from current events and that the hybrid working environment is here to stay.
"Remote working has become the norm over the past year. With video calls replacing in-person meetings to enable collaboration, it's no surprise cloud applications such as Zoom, are reaping the rewards from this changing style of working. Even as we transition out of the pandemic, we'll likely see reliance on these cloud-based applications continue to grow," he stated.
"We'll start seeing businesses move towards hybrid models of working, where staff will be allowed to work from both remote locations and in the office. As employees will be dotted across these different locations, they'll need to have the same level of access to these cloud-based applications and services in both environments.
"As we come out of the lockdown, business leaders will need to ensure they've made all the preparations to support the movement towards hybrid working. CTOs will need to embrace the technology to enable employees to collaborate wherever they are based - whether that's from their home or in the corporate office."