Zoom’s business growth has slowed down from its pandemic heyday but remained strong in the most recent quarter, as a growing number of companies, including Zoom itself, began calling employees back to the office and the company introduced artificial intelligence features to its product offerings. Yesterday (August 21), the video conferencing giant reported $1.14 billion in revenue for the quarter ended July 31, up 3.6 percent from the same period a year ago. Quarterly net income (GAAP-adjusted) came at $182 million, or $0.59 per share, up from $45.7 million, or $0.15 per share, a year ago.
Both figures beat analyst estimates, sending Zoom shares up 8 percent in yesterday’s after-hour trading. But the growth pace was much slower than in early 2021, when Zoom saw revenue soar five-fold as businesses and schools signed up for premium accounts to facilitate remote working.
Many companies continue to use Zoom even as employees return to the office. At the end of July, Zoom had 218,100 enterprise customers, up 7 percent from a year ago, the company’s CFO Kelly Steckelberg told analysts on an earnings call yesterday. These customers represent about 30 percent of Zoom’s revenue, she said.
Zoom anticipates steady but small growth for the rest of its fiscal year, with revenue for the current quarter ending October estimated at between $1.115 billion and $1.12 billion. Full-year revenue is expected to grow 2 percent to just under $4.5 billion.
Zoom forays into A.I. through Anthropic partnership
On yesterday’s earnings call, Zoom CEO Eric Yuan touted the company’s rollout of A.I. features during the quarter, including ZoomIQ, which allows meeting hosts to automatically generate meeting summaries without recording conversations.
“We are looking at it how to leverage [generative] A.I. to improve our community experience, deliver more value, and make the services more sticky,” Yuan said.
In May, Zoom disclosed an investment in Anthropic, a startup developing a chatbot that’s similar to OpenAI’s ChatGPT but is better aligned with human values. Zoom plans to integrate Anthropic’s A.I. assistant, Claude, into its host of meeting products, including Team Chat, Meetings, Phone, Whiteboard, Zoom IQ.
Yuan promised that, unlike some of its competitors, Zoom won’t be charging a “crazy price” for A.I. features on top of existing software. “I do not think that’s fair to customers,” he said.
Zoom recently faced backlash on social media after it updated its terms of service to potentially allow the company to train A.I. models with user data. “Zoom does not use customer content to train our A.I. models or third-party A.I. models,” Yuan assured users on yesterday’s call.
“I’m proud of the approach we are taking,” he added. “By putting customers’ privacy needs first, Zoom is taking a leadership position in ensuring customers can use our A.I. features with confidence that their content is protected.”
