Year of Zoom: Company beats Wall Street expectations with blowout earnings
The pandemic brought Zoom into the global spotlight and made the app a household name.
Zoom board member Santiago Subotovsky says that Zoom’s experience was like if a “12-year-old had to go straight to college” as an influx of new users caused its annual revenue to skyrocket 326% between January 2020 and January 2021.
Zoom’s first-quarter results also exceeded estimates across the board, with sales growth of 191%. The shares rose 4% in extended trading. Revenue in the quarter jumped from $328.2 million a year earlier. In the previous quarter revenue rose 369% as Zoom lapped the onset of the coronavirus pandemic in the U.S., which brought in millions of new users.
The company’s gross margin widened to 73.9% from 69.4% in the previous quarter, primarily because of optimization of public-cloud resources. Zoom said its Zoom Phone product, including cloud-based phone services along with video calls and other capabilities, had 1.5 million seats at the end of April, up from 1 million in January.
Of course, as the world reopens and we see a slow-but-steady return to the office for many workers, Zoom faces new challenges. It will have to prove that its videoconferencing software can remain a foundational part of the modern workplace even when people can meet in person.
Zoom’s growth and positive net income helped it gain brand recognition even before its shares began to trade. Investors certainly recognized this was a rarity among software as a service companies, sending its IPO share price up 72% in its first day.
Needless to say, those who were part of Zoom’s initial IPO are very happy. But, while their earnings are stellar, the investors who acquired shares before the IPO captured returns 3-5x greater. That’s where the real gold mine is.
Obviously, these unicorns are the ones to look for if you want outsized returns on your investment. Kris Bort, founding partner of Sakal Ventures, confirms that the potential with late-stage private companies is huge. He adds, however, that “these unique opportunities are normally not available to the individual investor.”
That’s the bad news. The best stocks to buy right now are probably not the ones you can get on your own.
The good news is that there are funds like Sakal Ventures that specialize in finding the most promising unicorns and helping private investors gain access to these exclusive opportunities.
If you want to find out about ground-breaking companies that many funds don’t even know exist, connect with Sakal Ventures. We will tell you about the enterprises that are capturing phenomenal success, employing revolutionary technology or processes, and redefining their respective businesses.
Book a FREE CONSULTATION and get a chance to invest in the next Zoom.