Wed, 14 Apr 2021

Zoom diversifies into new services beyond video conferencing

Robert Besser
07 Mar 2021, 02:04 GMT+10

Zoom Video Communications' fourth-quarter results trumped forecasts of moderate growth following its meteoric rise in 2020, with revenues surging 369 percent year-on-year to $882.5 million as the prolonged pandemic forced people to continue working from home.

The revenue increase came on top of a 367 percent growth in the previous quarter. Analysts had forecast the company's revenue would rise 331 percent to $811.04 million in the three months ending in January, Yahoo Finance reported.

The company's adjusted earnings per share of $1.22 also topped earnings estimates of 79 cents per share.

Meanwhile, the number of Zoom customers with more than 10 employees rose 470 percent to 467,100, exceeding forecasts of the customers in the segment, swelling to 442,600.

The video-conferencing software maker's gains resulted from the extension of social distancing guidelines this year and a spike in coronavirus infections, which left businesses wary of reopening offices.

Announcing its earnings results after market close on March 1, Zoom issued a strong guidance for the current quarter and the fiscal year, allaying investor concerns of a slowdown in business after workplaces and schools reopen later this year.

"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," Zoom CEO Eric Yuan said in a statement.

"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, as well as our globally recognized brand.." he added.

Zoom, which has begun expanding into new product categories to diversify its business beyond video-conferencing, has pegged revenue at $900 million-$905 million and adjusted earnings per share at 95-97 cents for the first quarter of the current fiscal year, well above estimates of sales of $829.5 million and adjusted earnings of 72 cents per share.

For the entire year, the company has forecast revenue in the range of $3.76 billion to $3.78 billion, compared to analysts' estimates of $3.53 billion.

(File photo. Credit Charles Deluvio | Unsplash)

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