- Zoom had a chaotically extraordinary year in 2020, with usage and revenue skyrocketing.
- Quarterly results reported Tuesday show it’s still expanding, but the growth rate is leveling out.
- Now as the world reopens, Zoom faces new challenges to prove that it can adapt to a post-pandemic world.
- See more stories on Insider’s business page.
The pandemic thrust Zoom into the global spotlight and made the video chat app a household name.
As the company scrambled to adapt to its newfound popularity, Zoom’s board started holding weekly – sometimes daily – briefings and on at least one occasion last year, CEO Eric Yuan personally held as many as 19 meetings in one day.
Zoom board member Santiago Subotovsky told Insider that Zoom’s experience was like if a “12-year-old had to go straight to college” as an influx of new users caused its annual revenue to skyrocket 326% between January 2020 and January 2021.
Now, its fiscal first-quarter results released Tuesday show its wild growth streak is leveling out.
Zoom reported Q1 revenue of $956.2 million, showing 191% year over year growth, which beat analyst estimates of $910.2 million compiled by Bloomberg. Earnings per share came in at $1.32, easily topping Wall Street predictions of $0.98.
Zoom also set full-year revenue guidance of $3.975 billion and $3.99 billion, a bit more than the $3.82 billion analysts forecasted. For comparison, last fiscal year it brought in $2.65 billion in revenue, so this represents continued growth even as pandemic restrictions are loosening, something analysts have been watching.
The stock initially dipped as much as 3% after hours before bouncing back and ticking up over 2%. Zoom’s guidance for its fiscal second quarter slightly missed the highest analyst estimates.
The results show how a slow-but-steady return to the office for many workers brings new challenges and opportunities. Zoom will have to show that its videoconferencing software can remain a foundational part of the modern workplace even when people can meet face-to-face.
To do so, the company will have to lean on strategies it developed during its period of whirlwind growth, which Subotovsky and seven other insiders and executives described to Insider earlier this year.