Dividends and Zoom posts big earnings even as growth slows

If you think about the office workers in the big downtown office towers, most of the people who came to the towers worked from home. How did they do this? One method was to use Zoom, as well as other access to the workplace, but Zoom allowed meetings to happen. It was possible that people could have called in, but meetings are more effective if everyone can see each other. Facial expressions tell stories.

In an article by Michael Liedtke of the Associated Press, Zoom’s growth is tapering off. The issue will be what will Zoom look like in one year’s time? President Biden has announced every who wants a vaccine can get in by the end of May and companies are looking at the real estate they pay and saying I want some bodies in them. It does not have to 100% all the time, but 70% is expected. Who stays home and who comes will be issues companies have to figure out. In the meantime, Zoom announced their year end results.

Zoom finished January with 467,100 customers with at least 10 employees that were paying for the subscription version of the its service. This was an increase of 33,400 customers, but below the gains of 63,500 and 183,500 in the previous 3/4’s of operation during the pandemic.

Zoom posted revenue of $882 million in the quarter or $2.65 billion for the year. That was 4 times more than the previous year. Profits jumped from $15 million to $260 million.

Zoom is introducing new services such as internet phone for voice-only calls of which it has 10,700 customers.

The company has $4.2 billion in cash and a stock price around $400 which allows them to merge or buy another company.

Linking to dividend paying stocks, while Zoom is not dividend paying it did benefit from a trend in society and almost overnight it was a success story. The trick with dividend paying companies is they are profitable over many years and can pay dividends. Sometimes you buy growth, but for dividend buyers you are buying profitability over the long term.

There are more questions than answers, till the next time – to raising questions.

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