Minnesota’s Economic News — W/E 9/24/21
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About a year ago, you probably had no idea who Eric Yuan was, much less what zoom was. The coronavirus has however changed all of that. Due to the shutdown, Zoom has become one of the most widely used video calling software. And Eric Yuan, Zoom’s CEO, has gained so much from that growth. As of yesterday’s report of Zoom earnings, Eric Yuna made $5.2bn on Monday alone after shares of Zoom surged.
There are a lot of people, like Bernie Sanders, who would like to let you know that this is unfair; billionaires should not be making so much money at a time when other people are hurting economically. What they fail to say however is just how much the general population has benefited from the services provided by most of the world’s richest people like Jeff Bezos. Tech companies have grown during the pandemic people increased their demand for online services. The same has been true for Zoom, as reported by NBC.
Revenue grew 355% on an annualized basis in the fiscal second quarter, which ended on July 31, according to a statement. In the prior quarter Zoom’s revenue grew 169%. New customers’ subscriptions delivered 81% of the revenue growth, and there was less customer churn than expected, finance chief Kelly Steckelberg told analysts on a Zoom call.
Zoom’s income neared $186 million, up from just $5.5 million in the year-ago quarter. Zoom increased its adjusted gross margin to 72.3% from 69.4% one quarter earlier partly because of expanding the capacity of its own data center equipment.
Zoom has experienced a growth in the number of users as the coronavirus shutdown fostered a heavy use of the platform’s video calling software. And this raised the demand for its shares.
Zoom averaged 148.4 million monthly active users in the quarter, up 4,700% year over year, RBC analysts led by Alex Zukin wrote in a note distributed to clients on Aug. 17, citing data from app analytics start-up SensorTower. The analysts have the equivalent of a buy rating on Zoom stock.
Excluding the after-hours move, Zoom shares are up 369% since the beginning of the year, while the S&P 500 index is up about 9%. During Monday’s trading session Zoom stock increased almost 9%, while the Dow Jones Industrial Average and S&P 500 ended the day lower.