Videoconferencing company sees no end to remote working, learning
Zoom is now a verb. Because people are routinely “zooming” into virtual meetings, the company zoomed past its quarterly earnings forecast. Expecting the trend to continue through the end of the year, Zoom is elevating its sales forecast by more than 30% as it converts more free users to paid.
The Lowdown: Following a blowout of its first-quarter earnings, in which sales tallied $664 million, growing 355% year over year, Zoom management adjusted its fiscal-year 2021 forecast from $1.8 billion to $2.39 billion.
The Details: Zoom’s sustained performance is due to ongoing pandemic conditions as businesses continue to rely on videoconferencing platforms to maintain operations as employees work from home. Zoom is also benefiting from distance learning, facilitating virtual classrooms for students who can’t attend school or opt not to do so. While the pandemic is creating the conditions in which Zoom is thriving, the growth is coming from the conversion of the company’s massive installed base of free users to paid accounts.
The Impact: Before 2020, Zoom was a plucky upstart videoconferencing service challenging incumbents such as Cisco’s Webex, LogMeIn’s GoToMeeting, and a variety of Microsoft products. Known for its simplicity , Zoom took off during the pandemic as users flocked to the easy-to-use conferencing service. While Zoom is benefiting from the pandemic conditions, it’s not alone. Other videoconferencing and unified communications services — including Cisco, Microsoft Teams, Verizon BlueJeans, and Google Meet — are all gaining traction as the work-from-home trend continues.
The Buzz: “The revenue growth is accelerating,” Chaim Siegel, an analyst at Elazar Advisors, told Reuters. “Even though they gave very strong guidance for next quarter, it’s possible they’re being conservative if you consider a stay-at-home back-to-school [model]. Zoom is a household word.”