Zoom Video Communications Inc. provided few surprises today as the videoconferencing phenom posted another strong quarter, beating analysts’ forecasts on earnings and revenue and capping off an unprecedented year of growth propelled by the coronavirus pandemic.

The company reported a fourth-quarter profit before certain costs such as stock compensation of $1.22 per share on revenue of $882.5 million, up 369% from the same period one year ago. That easily beat expectations, with Wall Street modeling a profit of just 79 cents per share on revenue of $811.8 million.

Zoom’s net income for the quarter came to $365.4 million. The report sent Zoom’s stock up more than 8% in after-hours trading.

More telling, though, was Zoom’s results for the full fiscal year, which show just how far the company has come since the beginning of the COVID-19 pandemic that made working from home a staple for millions of people around the world.

Zoom founder and Chief Executive Eric S. Yuan (pictured) stated the obvious when he said that it was an “unprecedented year” for the company. For the full year, Zoom reported a profit of $3.34 per share on total revenue of $2.651 billion, up 326%. “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,” Yuan said.

Zoom said its revenue growth this quarter was driven by a sharp increase in new customers added over the past year. These customers accounted for about 80% of its incremental revenue, up from 59% one year ago.

Zoom’s customer growth metrics were impressive too. It said it ended the quarter with about 467,100 customers with more than 10 employees, up 470% from a year ago. Of those, 1,644 contributed more than $100,000 in trailing-12-months revenue, up 156%. It also reported a trailing-12-month net dollar expansion rate in customers with more than 10 employees of 130%.

“When technology vendors grow their revenue at 30% or more it usually means good times, but Zoom added a big fat zero to this, growing at 300% instead,” said Constellation Research Inc. analyst Holger Mueller. “Certainly the global pandemic has helped Zoom, but it’s still a great example of a vendor having the right offering at the right time.”

Mueller said one of Zoom’s biggest tasks now will be to “battle the challenge of Zoom Fatigue” and keep innovating to stay ahead of its competitors. “Microsoft Teams is set in way too many enterprises and it is the main rival that Zoom needs to stay ahead of when it comes to capabilities, usability and overall functionality,” he said.

Yuan indicated the company will be able to achieve that, telling analysts on a conference call that Zoom is looking “well-positioned for strong growth” in the coming year. For the first quarter, it is forecasting a profit of between 95 and 97 cents per share on revenue of $900 million to $905 million. That’s well ahead of Wall Street’s forecast of a 72-cent-per-share profit on $804.78 million in revenue.

Analyst Charles King of Pund-IT Inc. told SiliconANGLE that Zoom deserves a pat on the back not only for its strong economic performance but also for coping with the remarkable growth in demand for its services with very few hiccups along the way.

“That said, the company could be headed into difficult waters as the COVID pandemic declines and companies return to at least a semblance of normal operations,” King said. “Future growth and success aren’t impossible but they will require Zoom’s leadership to continue adapting to changing circumstances and building their business for the long term. Zoom’s past achievements suggest that they’re up to the job.”

As to where that future growth will come from, Zoom stressed the potential of its two-year old Zoom Phone product, which is a simple cloud-calling service without video calls. Executives pointed out that Zoom Phone was the company’s fastest-growing product on a quarter-over-quarter basis in the fourth quarter. They said it ended the year with 10,700 Zoom Phone customers with more than 10 employees, up 269% year-over-year.

Nucleus Research analyst Trevor White told SiliconANGLE he was concerned that may not be enough for Zoom to keep on growing, though, as the communications market only has so much potential, not to mention it’s a very competitive one.

“There are too many freemium and lower-cost options from competitors like Google, and we are hearing, particularly from smaller customers, that they are more than willing to switch now that they aren’t using Zoom out of necessity,” White said. “However, I don’t think that the slowdown is going to wipe off major bits of Zoom’s business, as the transition will be gradual and the hybrid remote work model is still popular among knowledge workers.”

Zoom may have other options to grow its business, though, as it’s rumored to be trying to expand its presence in the overall productivity market. A report from The Information in December suggested that the company is trying to develop a web-based email service to compete with Gmail and Outlook, as well as a calendar service. The company is reportedly looking to launch an initial version of its email service in “early 2021” with a goal of providing a “next-generation” experience for users. It’s unclear exactly how the offering would differ from traditional email services.

The company may also be able to extract some revenue from a new product called OnZoom that debuted in October. OnZoom is a platform for hosting online events that is currently available at no charge to paying Zoom users, but the company hinted that it may be funded in the future through a fee applied to ticket sales, if it proves successful.

For the full year, Zoom said it’s looking at a profit of $3.59 to $3.65 per share on revenue of between $3.76 billion and $3.78 billion. Wall Street has modeled full-year earnings of $2.96 per share on revenue of $3.56 billion.

Photo: Vitor Oliveira/Flickr