Zoom is increasing its investment in Asia-Pacific to improve growth, in spite of its post-pandemic financial decline.

CNBC uncovered that Zoom is, in its own words, “doubling down” on its investments in the region, following a “strong commitment” the company had made there about two years ago.

The video communications company may not be in a strong position for international expansion plans, however, given its weaker financial outlook and successive share price tumbles, resulting in 15 percent cuts to its staff and a total drop of 45 percent this year.

Zoom is not slowing down, however, and Abe Smith, Zoom’s Head of International, told Squawk Box Asia that the company is “extremely optimistic” about the growth of its phone product in the Asia-Pacific.

Speaking about its cloud-based phone solution, Smith said: “That product grew over 100% year over year, it represents more than five and a half million seats today.

“We’re going to deliver a limitless human connection… across a myriad of products… that allow people to connect and communicate with flexibility and by choice.”

Zoom is Growing

There is a more optimistic perspective to take on Zoom’s financial position that, despite its economic shortcomings, it has still been able to muster growth in key areas.

At its Q1 2024 earnings results, it reported a total revenue of $1.105 billion, which is roughly $20 million above the high end of guidance.

The results even prompted Eric S. Yuan, Zoom Founder and CEO, to increase its outlook and look for investments elsewhere: “This relationship with our customers helped us to exceed our guidance due to enterprise growth and stabilizing online revenue while driving greater efficiencies in our business to deliver strong profitability and free cash flow margin.

“The solid start to the year has enabled us to raise our outlook for fiscal year 2024 while continuing to invest in innovations such as AI to help make interactions more meaningful and communications more effective.”

This is precisely what Zoom appears to be doing because, as it has already demonstrated, if it can promote growth then there will be a direct knock-on effect with its overall financial situation.

That’s not all. In March 2023, Zoom acquired Workvivo, the modern employee communication and engagement platform, which merges a social intranet and app into a central hub.

Investing in AI

The company has also been progressing on its technology frontier too, as it has been working towards deploying generative AI throughout its portfolio.

In May this year, Zoom announced its strategic investment in Anthropic, enabling Zoom to integrate the company’s AI assistant, Claude, across its entire platform.

Smith commented on its investment in Anthropic: “It’s a huge investment for the company.

“That’s a partnership and investment that will help accelerate the way that we work in this category.”

He also spoke more generally on AI: “AI is who we are … the intelligence in the platform has always existed from day one.

“If you’re experiencing a Zoom meeting and use something as simple as a virtual background, you’re experiencing AI.

“If at a meeting, you want to suppress that barking dog, [using] noise suppression in the background, that’s AI.”

While Zoom shouldn’t feel hamstrung by its former glory days, it has still had to deal with very real financial concerns in recent times.

As the company has already proved, there is nothing wrong with targeting new growth, so long as you don’t miss.

 

 



from UC Today https://ift.tt/2oUE7Ms