The trend of working from home that came into prominence during the Covid-19 pandemic is here to stay, said the chief of Zoom Eric Yuan. The company that offers video conferencing services grew at an unprecedented rate during the pandemic with people working from home and therefore required a medium to hold virtual meetings.
Sales growth of more than 40 per cent is expected to be achieved by the company this year to reach revenues of more than $3.7bn, said the video conferencing company.
This forecast propped up the stocks of the company by more than 6 per cent in New York.
The market was keen to watch the performance of the company with the pandemic slowly ebbing away with Covid-19 vaccinations being rolled out and social restrictions being lifted gradually.
While stating that its business so far has been strong, the company made it clear that investors should not expect the same pace of growth in its busine4ss as was witnessed last year during the pandemic.
There was a 370 per cent year on year growth in the sale of the company in its latest completed quarter with revenues reaching $882.5m.
“The fourth quarter marked a strong finish to an unprecedented year for Zoom,” company boss Eric Yuan said. “As the world emerges from the pandemic, our work has only begun,” Yuan added.
Zoom was essentially transformed into a household name practically overnight during the pandemic as stay at home orders and lockdowns resulted in a sudden and radical shift towards remote working for many business all across the world.
During the entire of 2020, Zoom’s sales increased by 326 per cent year on year to $2.6bn. The company generates revenues by charging businesses for its remote meeting software while offering a more limited but free service for the general public. For 2020, the company reported a jump in its profits to $671.5m from just $21.7m in 2019.
With the pandemic ebbing away slowly, there are some companies that have started to bring in back staff to their offices. However there are many businesses that had said that they expects that the flexibility of working from home and remote working that emerged during the pandemic will partly continue even after the pandemic gets over.
“The future is here with the rise of remote and work from anywhere trends,” Yuan said in prepared remarks for investors. “We recognize this new reality and are helping to empower our own employees and those of our customers to work and thrive in a distributed manner,” Yuan added.
The manner in which Zoom now manages to compete against tech giants such as Microsoft and Google, which have also launched similar video conferencing features, will decide the fate of Zoom, said Susannah Streeter, analyst at Hargreaves Lansdown.
“Although it stole an early march on other players in the first few months of the crisis, it does now have much stiffer competition from the likes of Microsoft and Google who have significantly upped their game,” she wrote in a research note.
“It may be that we have become so used to pandemic habits that we will stick with our virtual social lives, particularly for long distance friendships and work relationships. But just how large a slice of the live video pie Zoom manages to hang on to will depend on how it matches up to its powerful rivals.”
(Adapted from BBC.com)