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 $1.4 billion 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.
A couple of numbers tell the story of Zoom’s phenomenal growth. The company finished the January quarter serving about 467,000 customers with more than 10 employees—the majority of its customer base—compared with about 82,000 a year earlier. Revenue in the quarter was $882.5 million, more than it generated in all of the previous fiscal year. Compare Zoom’s numbers with Slack, another workplace communications tool that has become more indispensable as people shifted to working from home. In fiscal 2020 (Zoom and Slack have the same fiscal year), Slack generated more revenue than Zoom. In the most recent quarter, Zoom’s revenue was almost as much as what Slack produced for all of fiscal 2021.