Video communications platform Zoom has continued its meteoric pandemic growth, reporting second-quarter revenues of $663.5m – a 355% year-over-year increase.
Net income for the quarter ended 31 July was $185.7m, up from $5.5m in the year-ago period.
Analysts had expected Zoom Q2 revenue of $500m. But the US company, which has become an essential tool for businesses and consumers during the pandemic’s stay-at-home restrictions, has continued to attract new customers even as economies have started to reopen.
Zoom has carried on securing big enterprise contracts, with the number of customers contributing more than $100,000 in sales over the past 12 months increasing by 112% year-over-year.
It has also seen the number of customers with more than 10 employees grow to 370,200, a 458% year-over-year increase. In all, new subscriptions delivered 81% of Q2 revenue.
“Organisations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere, and connecting anywhere on Zoom’s video-first platform. At Zoom, we strive to deliver a world-class, frictionless, and secure communication experience for our customers across locations, devices, and use cases,” said Eric S. Yuan, CEO and founder of Zoom.
Zoom reported Q2 earnings per share of $0.92, versus analyst expectations of $0.45.
Zoom Q2 revenue soars, but can growth continue?
In the previous quarter, Zoom generated $328.2m in revenue, marking a 169% year-over-year increase. As offices cautiously started to reopen it raised questions about whether Zoom could sustain its high levels of growth. However, its Q2 fiscal year 2021 results have shown demand remains high. In an earnings call, Zoom chief financial officer Kelly Steckelberg told analysts that churn rate was lower than expected for the quarter.
Zoom anticipates growth to continue in Q3, albeit at a much slower rate than Q2. In its Q3 outlook, Zoom said it expects revenues to be between $685m and $690m. For the full fiscal year, Zoom expects revenues to be between $2.37bn and $2.39bn.
“Today’s Zoom’s Q2 results demonstrate how powerful the brand has become,” said Hiran Adhia from global branding agency Landor. “Video becoming the most popular way to communicate in 2020 is not something Zoom’s CEO Eric Yuan could have anticipated, yet his company has spearheaded the revolution.
“The key to success? Yuan’s fervent dedication to “deliver happiness” despite global anxiety and panic. We’ve all joined that Friday night virtual quiz and ‘jumping on a Zoom’ has become the new ‘Skyping’. Delivering these moments of respite during this unique chapter in human history has not only distinguished the company, but made it a vital lifeline for us all. The world has changed and Zoom transformed with it.”
Zoom shares rose by as much as 25% in extended trading on Monday following the publication of its Q2 results. Since the start of the year Zoom’s share price is up by 373%.