Video conferencing company Zoom has seen a dramatic surge in sales as the coronavirus pandemic forced millions to work, learn and socialise remotely. The firm reported that use of its software jumped 30-fold in April, with daily participants reaching over 300 million at its peak.
Paying customers have more than tripled, leading Zoom to forecast sales of up to $1.8bn (£1.4bn) this year, roughly double its March estimate. Revenue in the three months to 30 April soared 169% year-on-year to $328.2m, with net profit of $27m for the quarter surpassing its entire previous financial year's profit.
Chief executive Eric Yuan said the rapid growth represents a huge opportunity for the company, which he founded in 2011 after years at WebEx. Zoom's market capitalisation has risen to over $58bn, up from $15.9bn at its initial public offering last year.
However, the massive uptake has also exposed security flaws and led to political scrutiny over the firm's ties to China, where most of its product development team is based. Zoom has faced criticism for sending user data to Facebook, wrongly claiming end-to-end encryption, and allowing meeting hosts to track attendees. In April, Yuan apologised for the security lapses and the company has begun implementing fixes and appointing figures with Washington experience, including former national security adviser H R McMaster.
Analysts expect Zoom to overcome these issues and maintain its focus on business customers, though competition from Microsoft and Cisco is intensifying as remote work becomes more prevalent. “They have this amazing brand... now they have to leverage that brand and figure out which markets they're going to go after,” said Ryan Koontz of Rosenblatt Securities.
