The idea seemed a little bit dull and boring : a secure video conferencing platform, accessible to all and available in freemium version.
But in the midst of a pandemic and in the reshaping world of a working-from-home economy, Zoom, established in 2011 by former Webex VP Eric Yuan has proven its efficiency across the board.
For the past quarter, Zoom has confirmed it has earned more than $663 million in revenue, an increase of 355% compared to last year.
While some regions of the world start a new shelter-at-home and others reopen their public spaces, teleconferencing is expected to remain a new form of business communication. Some other tech giants have been inspired to conquer this booming market.
Zoom is exceeding expectations
2020 has been a conundrum for many companies, forced to file for bankruptcy… But as for Zoom, the pandemic has been the best opportunity ever.
Established in 2011 by Silicon Valley guru Eric Yuan, former vice president of telecommunications company Cisco Webex, Zoom rapidly became a unicorn in 2017.
Zoom’s record quarter adds $4.2 billion to CEO Yuan’s fortune https://t.co/eKWdBBov6i
— Bloomberg Canada (@BloombergCA) September 1, 2020
While it was used by professionals across America – mostly companies, global COVID-19 pandemic put Zoom into a new light for mainstream consumers: with its free 40-minute video conferences and private virtual conference rooms, Zoom’s success now makes it one of the most sought-after companies on Wall Street.
+40% on Tuesday
According to CNBC, “Zoom Video Communications shares rose as much as 40% Tuesday after the company reported fiscal second-quarter earnings Monday that were better than analysts had expected and raised its full-year guidance significantly.”
Zoom's stock surges on Wall Street, making the video conferencing company more valuable than well-established companies in the auto and aviation industries. The shares rose 33% to $432.45, pushing Zoom's market value to nearly $122 billion. https://t.co/LDbu83lgUH
— The Associated Press (@AP) September 1, 2020
Indeed, Zoom’s market cap is currently estimated at $129 billion, which is more than $25 billion compared with last year, according to CNBC. Zoom is now larger than IBM or AMD.
The California-based company earned more than $ 663 million in revenue from April to June, 355% more than the same period last year. Its net profit reached nearly 186 million, compared with less than 6 million a year ago. According to Zoom, the number of large customers – companies that brought it in over $ 100,000 in revenue in the past year – has doubled to 988 this quarter.
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India is eyeing potential users
These impressive results may have inspired some companies – all the way up to India.
Indian giant Reliance launched last month JioMeet, a free application similar to Zoom which reached 100,000 downloads within hours after its launch.
Not only does Jiomeet offer free conference calls – unlike Zoom, which caps free access to 40 minutes, but it can invite up to 100 people.
Zoom’s India Head said he was shocked at the similarity between Zoom and JioMeet. https://t.co/jJOVL7j1lU
— IndiaTodayTech (@IndiaTodayTech) July 9, 2020
Reliance Industries, JioMeet’s parent company, has gained 37% of its value since the launch was announced in early July.
In Silicon Valley, GAFAM have also released press releases to remind investors that they are developing new ways of communicating – from Google that launched Google Meet back in April, to Facebook and its “conference rooms” and Microsoft with “Teams”, hoping to have a good retention rate on its existing users.
The above content is considered to be market commentary information and shall not be perceived as independent investment research or investment advice.
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