Zoom Video Communications reported 35 percent increase in revenue to $1.05 billion for the third quarter of 2021.
“We are well on our way to becoming an indispensable platform for enterprises, individuals, and developers to connect, collaborate, and build in the flexible hybrid world of work,” said Zoom founder and CEO, Eric S. Yuan, in a media statement.
Zoom had 2,507 customers contributing more than $100,000 in trailing 12 months revenue, up approximately 94 percent from the same quarter last fiscal year.
Zoom had approximately 512,100 customers with more than 10 employees, up approximately 18 percent from the same quarter last fiscal year.
Zoom had a trailing 12-month net dollar expansion rate in customers with more than 10 employees above 130 percent for the 14th consecutive quarter.
Zoom is expecting revenue of $1.051-$1.053 billion and income from operations of $361-$363 million fourth Quarter Fiscal Year 2022.
Zoom is expecting revenue of $4.079-$4.081 billion full fiscal year 2022 with income from operations of $1.598-$1.600 billion.
The leading video-conferencing platform benefited from the launch of its new offerings that helped boost demand as businesses adopt hybrid models of work.
Its recently launched Events platform, where businesses can host large-scale conferences, coupled with Zoom Phone and Zoom Rooms has helped the company compete better with rival platforms such as Microsoft Teams, Cisco Webex as well as Salesforce-owned Slack.
Microsoft, Cisco and Salesforce do not reveal their collaboration revenue from platforms such as Teams, Webex as well as Slack.
Zoom finds itself at a critical point. Its video conferencing tools will play a vital role in the hybrid working model that will dominate the future of work, but its revenue growth will inevitably slow as the pandemic subsides and employees return to offices. In its latest results, the company reported a lower-than-expected increase in the number of large customers, raising doubts about the company’s future in the competitive collaboration tools market.
“Zoom is under increasing pressure to move beyond video conferencing and expand its communication platform. The company has made inroads into conference room hardware and developed a hardware as a service offering, but this might not be enough. Its failure to complete the planned acquisition of Five9 was a missed opportunity for Zoom to integrate contact centers into its portfolio,” Laura Petrone, Principal Analyst in the Thematic Research team at GlobalData, said.
Microsoft and Meta (formerly Facebook) are championing the metaverse as the ideal environment to support hybrid working. “Jumping on the metaverse bandwagon might look like the natural next step to Zoom, but it’s a long-term project – not a short-term solution. Moreover, there’s still much uncertainty around how the metaverse will materialize.
