The pandemic made us change how we work and live. And these new conditions are not a perfect fit for all businesses. But, some businesses were just waiting for an opportunity like this. Most tech and e-commerce companies have just flourished during the previous year, so we saw some great growth from Amazon (NASDAQ:AMZN), Alphabet's Google (NASDAQ:GOOG), and Microsoft (NASDAQ:MSFT). One of the biggest beneficiaries of distance schooling and remote working is Zoom Video Communications, Inc. (NASDAQ:ZM).
When the company finished its fiscal 2020 with revenues of $623 million and net profit of $ 22 million and the following fiscal year which ended this January 31, the revenues skyrocket to $2.6 billion with a net profit of $671, which must be some amazing tailwind! That growth will be hard to repeat. Still, Zoom is moving ahead to secure its business does not decrease when we go back to our offices, or at least when we shift to hybrid work.
Acquisition Of Five9
After acquiring a startup Keybase Inc. last year, which enabled Zoom to complete its videoconferencing service with end-to-end encryption capabilities, and a translation software company Kites GmbH last month, Zoom decided on its biggest acquisition. The latest target is Five9, Inc. (NASDAQ:FIVN), a secure and highly scalable cloud-based contact center, with over 2,000 customers including Under Armour, Inc. (NYSE:UA) and Citrix Systems, Inc. (NASDAQ:CTXS).
Five9's call center processes over 7 billion minutes of calls per year. This will provide additional support to Zoom's phone business and enable Zoom to enter a contact center market worth $24 billion. The popularity of cloud-based contact centers has been rising over the past years, and it was additionally accelerated during the pandemic, as it allows the staff to work remotely. The deal is expected to close in the first half of 2022 for $ 14.7 billion.
Market & Outlook
In the first three months of fiscal 2022, Zoom's revenues continued to rise to $956 million, which is a jump of 191%, compared to the same period the year before. Maybe Zoom has some amazing momentum at the moment, but it is not the only company thinking about the major acquisition. Salesforce.com (NYSE:CRM), famous for its cloud-based customer relationship management service and other software, agreed to acquire Slack Technologies, Inc. (NYSE:WORK) for its business communication platform and other solutions, for $27.8 billion. A similar example is Advanced Micro Devices, Inc. (NASDAQ:AMD)'s $35 billion acquisition of Xilinx, Inc. (NASDAQ:XLNX).
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