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.
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
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.
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.