Zoom, the video conference provider, said its hypergrowth phase related to the COVID-19 pandemic is going to last at least another few months. The company projected that it will haul in 240% more revenue during this current quarter than it did this time a year ago.
The company announced earnings this afternoon and said the revenue for its second quarter of fiscal 2021 is "expected to be between $495 million and $500 million." If that holds true, Zoom will top its quarterly revenue of $145.8 million for the second quarter of fiscal 2020, which ended July 31, 2019, by around $350 million or more.
Zoom's reported earnings were impressive but not as eye-popping as its projections. The firm reported a net income of $58.3 million on revenue of $328.2 million for its first quarter of fiscal year 2021, the period that ended April 30, 2020. The company's revenue for the past quarter was up 169% from a year earlier.
As businesses and schools closed and states enacted stay-at-home orders to help slow the spread of the new coronavirus, all video conferencing platforms got a boost. Zoom, however, became the default choice because of its layout, free introductory plan and easy-to-use software and apps.
The company's popularity is remarkable given its competitive set. Not only is it going up against established telcos and broadband providers, but also networking companies like Cisco, social networks like Facebook and tech giants like Microsoft and Google. Nobody says they're going to have a Webex happy hour, do they?
"Its daily active meeting participants grew almost 3,000%, from 10 million in December 2019 to 300 million in April 2020," wrote Omdia analyst Pamela Clark-Dickson in a May research note to clients.
Classes, church services, business meetings, birthday parties and even jury trials have been held via Zoom. The company's name has become synonymous with video conferencing. Likewise, "Zoombombings," or hijacking a Zoom meeting, has also crept into the cultural zeitgeist, thanks to the company's once laughably lax security.
Zoom's quick ascent might level off as states open up and some businesses resume. Competitors have also taken note and a few have made a more serious effort to show up. Microsoft and Google recently made versions of their video conferencing platforms free.
Verizon even tried on Bluejeans, but we're still not sure it was a good fit.
As Clark-Dickson's note reminds us, Facebook is targeting Zoom's way of bringing in people outside of its platform to a call – the first step in converting a customer. "Facebook has responded by launching Messenger Rooms, a free videoconferencing service on Messenger, which can be accessed by non-Facebook users via a link shared by the room's host (similar to Zoom)," she wrote.