Zoom became a household name in 2020, and its latest financials back up the company’s astronomical growth in a year where “zooming” became a verb in the virtual video world. Beating Wall Street expectations, Zoom reported triple-digit revenue growth for the fourth quarter and fiscal year 2021 for the period ended January 31, 2021. Zoom’s fourth quarter revenue was $882.5 million, a 369% increase year-over-year. Full fiscal year revenue was $2.65 billion, a 326% increase year-over-year.

CEO comments

“The fourth quarter marked a strong finish to an unprecedented year for Zoom. In FY2021, we significantly scaled our business to provide critical communications and collaboration services to our customers and the global community in response to the pandemic. We are humbled by our role as a trusted partner and an engine for the modern work-from-anywhere environment. Our ability to rapidly respond and execute drove strong financial results throughout the year,” said Eric S. Yuan, Zoom founder and CEO in a March 1 news release.

“As we enter FY2022, we believe we are well positioned for strong growth with our innovative video communications platform, on which our customers can build, run, and grow their businesses; our globally recognized brand; and a team ever focused on delivering happiness to our customers,” added Yuan.

Q4 and full-year highlights for fiscal year 2021

Zoom shared the following highlights in their earnings report for the fourth quarter of fiscal year 2021.

• GAAP income from operations for Q4 was $256.1 million, compared to $10.6 million for Q4 in FY2020.
• Net cash flow from operating activities was $399.4 million, compared to $36.6 million in Q4 FY2020.
• Fourth quarter GAAP operating margin was 29%, and non-GAAP operating margin was 40.9%.
• GAAP net income for the quarter was $260.4 million, or $0.87 per share, compared to $15.3 million, or $0.05 per share, in Q4 FY2020.
• As of January 31, 2021, the company had $4.25 billion in cash, cash equivalents and marketable securities, not including restricted cash.

Full-year highlights include the following:

• GAAP income from operations was $659.8 million, compared to $12.7 million in FY2020.
• Net cash flow from operating activities was $1.47 billion, compared to $151.9 million in FY2020.
• GAAP operating margin was 24.9%, and non-GAAP operating margin was 37.1%.
• GAAP net income for the quarter was $671.5 million, or $2.25 per share, compared to $21.7 million, or $0.09 per share, for fiscal year 2020.

Customer highlights

It is no surprise that revenue in 2020 was driven by new customers and the demand for video conferencing services in the height of the pandemic. One year later, those services remain in demand, though they may be tapering off in the months to come. Zoom shared the following customer data:

• At the end of the fourth quarter of FY2021, Zoom had more than 467,100 customers with more than 10 employees, a 470% increase year-over-year.
• 1,644 customers contributed more than $100,000 in trailing 12 months revenue, a 156% increase year-over-year.
• For the 11^th consecutive quarter, Zoom had a trailing 12-month net dollar expansion rate of more than 130% in customers with more than 10 employees.

FY2022 Outlook

Zoom shared the following guidance for the first quarter and full year for fiscal year 2022:

• Q1 FY2022 revenue between $900 million and $905 million
• Q1 FY2022 non-GAAP income from operations between $295 million and $300 million
• Q1 FY2022 non-GAAP diluted earnings per share between $0.95 and $0.97
• Full year FY2022 revenue between $3.76 billion and $3.78 billion
• Full year FY2022 non-GAAP income from operations between $1.13 billion and $1.15 billion
• Full year FY2022 non-GAAP diluted earnings per share between $3.59 and $3.65

Insider Take

Despite this stellar financial report and beating analyst expectations, yesterday Zoom’s stock value inched downward. Why? Jim Cramer explained that the stock market doesn’t like companies that did well in the pandemic. Zoom had a remarkable year, but that means that producing comparable results in future quarters is going to be difficult. This type of growth is likely not sustainable long-term, but that isn’t a surprise.

We expect things to level off for Zoom this year as the pandemic slows down and people return to work, but their subscription service is still an incredibly valuable resource that companies around the world are willing to pay for. None of us knows what the next year holds, but one thing is for certain. COVID has changed us forever and it will change how we do business. We may not be “zooming” every day, but it will still be an important tool in our virtual toolbelt.