Zoom blooms and another boom looms soon

After attracting 265,400 customers with more than 10 employees and a whole host of weird cocktail parties, the video conference star predicts another killer quarter ahead.

Phil Harvey, Editor-in-Chief

June 2, 2020

2 Min Read
Zoom blooms and another boom looms soon

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.

Phil Harvey, Editor-in-Chief, Light Reading

About the Author(s)

Phil Harvey

Editor-in-Chief, Light Reading

Phil Harvey has been a Light Reading writer and editor for more than 18 years combined. He began his second tour as the site's chief editor in April 2020.

His interest in speed and scale means he often covers optical networking and the foundational technologies powering the modern Internet.

Harvey covered networking, Internet infrastructure and dot-com mania in the late 90s for Silicon Valley magazines like UPSIDE and Red Herring before joining Light Reading (for the first time) in late 2000.

After moving to the Republic of Texas, Harvey spent eight years as a contributing tech writer for D CEO magazine, producing columns about tech advances in everything from supercomputing to cellphone recycling.

Harvey is an avid photographer and camera collector – if you accept that compulsive shopping and "collecting" are the same.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like