Zoom booms as pandemic drives millions to its video service

Zoom Video Communications is rapidly emerging as the latest internet gold mine as millions of people flock to its conferencing service to see colleagues, friends and family while tethered to their homes during the pandemic.

Tuesday's release of the once-obscure company's financial results for the February-April period provided a window into the astronomical growth that has turned it into a Wall Street star.

Zoom's revenue for its fiscal first-quarter more than doubled from the same time last year to $328 million, resulting a profit of $27 million — up from just $198,000 a year ago.

The numbers exceeded analysts’ already heightened expectations, providing another lift to a rocketing stock that has more than tripled in price so far this year. After a big run-up leading up to Tuesday's highly anticipated announcement, Zoom's stock edged up another 3.5% in extended trading.

The surge has left Zoom with a market value of about $59 billion — greater than the combined market values of four largest U.S. airlines, which have seen their businesses hammered by the coronavirus outbreak that has dramatically curtailed travel.

“We were humbled by the accelerated adoption of the Zoom platform around the globe,” said CEO Eric Yuan, who co-founded the company nine years ago.

Zoom’s boom has come

The concerns prompted some schools to stop using Zoom for online classes that have become widespread since February, although the company’s efforts to introduce more security protection has brought some back to the service. More than 100,000 schools worldwide are now using Zoom for online classes, according to the company.

But the once-weak privacy controls also helped make Zoom extremely easy to use, one of the reasons it became such a popular way to hold online classes, business meetings and virtual cocktail hours after most of the U.S. began ordering people to stay at home in effort to reduce the spread of the novel coronavirus that causes COVID-19.

Zoom also offers a free version of its service, another factor in its popularity at a time when about 40 million people in the U.S. have lost their jobs since mid-March, raising the specter of the worst economic downturn since the Great Depression ended in the 1930s.

The San Jose, California, company has always made most of its money from companies that subscribe to a more sophisticated version of its service that traditionally has been used for business meetings among employees working in offices far apart from each other.

But the pandemic-driven shutdown turned Zoom into a tool for employees who once worked alongside each other, but have been doing their jobs from home during the past few months.

Zoom ended April with 265,400 corporate customers with at least 10 employees, more than quadrupling from the same time last year.