Zoom booms as pandemic drives millions to video service

Zoom Video Communications is rapidly emerging as the latest internet gold mine as millions of people flock to its conferencing service to see colleagues, friends and family while tethered to their homes during the pandemic.

Tuesday’s release of the once-obscure company’s financial results for the February-April period provided a window into the astronomical growth that has turned it into a Wall Street star.

Zoom’s revenue for its fiscal first-quarter more than doubled from the same time last year to 328 million dollars, resulting a profit of 27 million dollars — up from just 198,000 dollars a year ago.

The numbers exceeded analysts’ already heightened expectations, providing another lift to a rocketing stock that has more than tripled in price so far this year.

After a big run-up leading up to Tuesday’s anticipated announcement, Zoom’s stock gained nearly 3% in extended trading to 213.60 dollars — more than five times the company’s initial public offering price of 36 dollars less than 14 months ago.

The surge has left Zoom with a market value of about 59 billion dollars — greater than the combined market values of the four largest US airlines, which have seen their businesses hammered by the coronavirus outbreak that has dramatically curtailed travel.

“We were humbled by the accelerated adoption of the Zoom platform around the globe,” said CEO Eric Yuan, who co-founded the company nine years ago.

In a sign that its growth is not expected to be short lived, Zoom forecast revenue of roughly 500 million dollars for its current quarter ending in July, more than quadrupling from the same time last year. For its full fiscal year, Zoom now expects revenue of about 1.8 billion dollars, nearly tripling in a year.

Zoom’s boom has come despite privacy problems that enabled outsiders to make uninvited — and sometimes crude — appearances during other people’s video conferences.

The concerns prompted some schools to stop using Zoom for online classes that have become widespread since February, although the company’s efforts to introduce more security protection has brought some back to the service.

More than 100,000 schools worldwide are now using Zoom for online classes, according to the company, based in San Jose, California.