Video conferencing service Zoom continued to grow explosively last quarter – but investors are now saying it’s not happening fast enough. The Zoom share fell by around five percent after the presentation of the figures. Sales jumped from $166.6 million (139.2 million euros) to a good $777 million within a year. Profits in the third fiscal quarter ended at the end of October actually shot up year-on-year from $2.2 million to $198.4 million.
A winner from the Corona crisis
Zoom had entered a new league with the Corona crisis. The company was originally supposed to provide video conferencing for businesses. But in the pandemic, not only did corporate use increase, but consumers are turning to Zoom for everything from family reunions to yoga classes.
However, Zoom still earns its money in the business with larger companies. The number of customers with more than ten employees increased to 433.700, nearly six times more than a year ago, Zoom reported after the U.S. stock market closed on Monday. Three months ago, the company had just 370.200 customers with more than ten employees.
Subscriptions spool money into coffers
Subscription revenue from business with new customers accounted for about 80 percent of revenue growth last quarter, Chief Financial Officer Kelly Steckelberg said in a conference call with analysts. At the same time, Zoom needs to spend more money on technical infrastructure such as cloud capacity. Zoom is also investing in marketing in hopes of securing future growth. It’s still unclear how Zoom was able to cash in on its popularity with consumers – and how user numbers will develop once the pandemic is over.
For the current quarter, Zoom expects revenues to range between $806 million and $811 million. Zoom now raised its revenue forecast for the full fiscal year to about $2.58 billion, from up to $2.39 billion three months earlier.