Zoom's growth is slowing, so it's getting crafty to help keep the Zoom Boom alive

Tuesday, August 31, 2021 by Snacks

You're on mute... Now repeat the 30-second spiel. Zoom has become a verb, a meme, and a lifestyle — but its latest earnings show the glory days may be fading. Last year, Zoom’s revenue more than quadrupled from the previous year as it led the WFH boom. Zoom's sales are still growing – but more slowly.

  • Zoom's quarterly sales grew 54% from last year — down from nearly 200% growth in the previous quarter. Next quarter, it's expecting even slower growth.
  • Zoom stock dropped 10% after earnings. This year, it’s down 4%, while the market-tracking S&P 500 is up 22%.

Zoom, zoom, zoom, zoom… I want you in my conference room. Zoom's growth is slowing as people return to offices and IRL events. It's also experiencing the "DPF Effect," aka: demand pulled forward. Growth that should've happened last quarter happened all at once last year. Now, Zoom's getting creative to help keep the boom going:

  • Zoom-as-a-service: In March, Zoom said it would start licensing its video conferencing tech to other apps as an unbranded service. Think: dating apps and telehealth providers.
  • Live events: In October, Zoom launched "OnZoom" for people to find and host paid virtual events, from live performances to yoga classes. In July, it launched "Zoom Events," for companies to host external and internal interactive events (think: large workshops).
  • Customer service: In July, Zoom announced plans to buy cloud-based customer-service platform Five9 for a whopping $14.7B. Zoom sees it as a way to attract more big enterprise customers.

Zoom doesn't need to change its product... to keep growing post-pandemic. It just needs to keep expanding beyond work meetings. That’s why it’s putting its tech to work through live events and whitelabel licensing. Even with the Delta variant surging, the fully remote office life likely won’t last forever. But Zoom could thrive in a hybrid IRL-virtual future — if it offers the tools to support it.

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