The Zoom Video platform uses a new trend of hybrid work

The successful reorientation of the business allowed the Zoom Video Communications Inc. (ZM) communications platform to continue to increase revenue even after the end of the lockdown. The company recently reported the results of the last quarter. In the first quarter of fiscal year 2023, Zoom Video Communications revenue increased by 12% year-on-year to $1.1 billion.

The growth of income in the company is associated, among other things, with a change in the direction of business. During the lockdown, Zoom Video Communications focused on ensuring contact between employees at home. However, after the employees returned to the offices, it would seem that the need for a communication platform disappeared. However, Zoom Video Communications is now promoting its products as hybrid work solutions to connect those who work in the main office, in branches, at home, away, or periodically alternate these options.

Thanks to the new positioning, the total number of Zoom corporate customers increased by 24%, and the number of customers spending more than $100,000 per year increased by 46%. But against the background of sales growth, Zoom Video Communications notes a decline in profits. One of the reasons is the high cost of marketing and development. The company has to spend a lot on attracting customers after the “hot” period of the pandemic and creating new products.

For example, spending on research alone has increased by 120% year-on-year and on marketing by 48% year-on-year. The company’s net income (non-GAAP) was $1.03 per share compared to $1.32 per share a year ago, and its GAAP earnings almost halved to $0.37 per share. Nevertheless, Zoom Video Communications has proven that it can remain relevant even under normal conditions, when most of the employees have returned to their offices.