In March last year, the pandemic prompted an abrupt shift to remote work for many businesses around the world. This transformed Zoom, an app for video conferencing and meetings, into a household name within a few weeks.
The video conferencing platform saw its sales soar by a whopping 326% to $2.6 billion in 2020. The profits jumped from $21.7 million in 2019 to $671.5 million in 2020. Now, the company is expecting sales to rise even more in 2021.
Eric Yuan, Zoom’s CEO unveiled that based on their calculations, the company’s sales will rise more than 40% this year and will reach more than $3.7 billion. Zoom believes that the work from home trend is here to stay.
This forecast pushed the shares of the company up by more than 6% in after-hours trade in New York. All this time, investors were looking for clues as to how the firm’s sales will do in the future since people around the world are getting vaccinated and social restrictions are being lifted.
While talking about how the soaring sales was a surprise to Zoom, Yuan said,
The fourth quarter marked a strong finish to an unprecedented year for Zoom. As the world emerges from the pandemic, our work has only begun. The future is here with the rise of remote and work from anywhere trends. We recognize this new reality and are helping to empower our own employees and those of our customers to work and thrive in a distributed manner.
Despite facing backlash for security breaches, the company managed a steady growth throughout the year and expects to follow the same pattern in 2021. However, according to Susannah Streeter, an analyst at Hargreaves Lansdown, Zoom’s fate depends on how it manages to compete against firms such as Microsoft and Google, which have introduced similar features.
Although it stole an early march on other players in the first few months of the crisis, it does now have much stiffer competition from the likes of Microsoft and Google who have significantly upped their game. It may be that we have become so used to pandemic habits that we will stick with our virtual social lives, particularly for long distance friendships and work relationships. But just how large a slice of the live video pie Zoom manages to hang on to will depend on how it matches up to its powerful rivals.