The Information says that Zoom Video Communications “provided another reminder of why it’s been such a hot stock during the pandemic. The company, whose brand name is now synonymous with video calls, revealed it has become a cash machine over the past 12 months. Zoom generated $1.4bn from its videoconferencing service in fiscal 2021. The fascinating question is what Zoom will do with the $4.2 billion it has sitting in the bank, including money from its recent stock offering.”
It reported that Zoom finished its January quarter serving about 467k customers with more than 10 employees—the majority of its customer base—compared with about 82k a year earlier. Revenue in the quarter was $882.5m – more than it generated in the whole of the previous year.
The Information adds: “Zoom has translated its success in drawing customers through the pandemic into soaring revenue and profits. But it needs to diversify, as the looming end to the pandemic is likely to reduce the demand for Zoom service. Zoom faces a limited period in which to diversify. Rivals like Google—which has added a Zoom-like Meets video function to its workplace tools—are becoming a bigger threat. Zoom needs to become more than a one-trick pony quickly.”