What's going on?
Zoom charmed investors this week with expectation-beating quarterly results.
What does this mean?
The Covid era was a nightmare for most of us, but for Zoom it was the goose that laid the golden egg. And while the firm’s had to navigate some choppy waters since then, it’s adapting well, slimming both its staff and its spending. The company’s also been adding non-video services to its lineup – like contact center features and so-called “internet phone” – in a bid to keep big clients happy. Looks like it’s working: Zoom’s business customer count was up 12% last quarter and the number of firms paying over $100,000 grew by 27%, which helped push revenue and profit past expectations. What’s more, Zoom’s bright profit outlook and talk of upcoming artificial intelligence (AI) products – like transcription, translation, and sales intelligence tools – had investors beaming, and they sent shares up 8%.
Why should I care?
Zooming in: Playing catch up.
Hitching a ride on the AI express isn’t really a forward-looking move these days: it’s almost an essential one. Analysts predict that AI will be the biggest driver of near-term growth in the tech industry – a bet that makes sense with the economy looking so pale-faced. And given that Microsoft’s already jumped on board, working ChatGPT into its Teams Premium package, Zoom needs to act fast – or risk eating competitors’ dust.
The bigger picture: Home free.
It seemed like the end was nigh for Zoom when the world stepped out of quarantine – but these results are another reminder that the firm’s got life in it yet. After all, cost-cutting companies and workers alike favor hybrid workplaces, meaning commercial property owners are the real losers: US office vacancies are predicted to hit a record 1.1 billion square feet by 2030.