Full-time remote work will not adhere just because some of us want to.
The latest financial results from Zoom Video Communications are an example. Even though the video conferencing company’s quarterly earnings ended July 31 came just above the Wall Street estimate, Zoom is no longer selling. Research and development costs almost doubled in the quarter compared to the same period last year, while sales and marketing as a percentage of revenue also increased. Despite the added investments, the company’s orientation implies that revenue growth will slow significantly over the course of the year. Zoom shares fell 11% in out-of-hours trading immediately after its earnings report.
If you plan to continue working from home every day for the foreseeable future, it’s likely to be a luxury option. Companies are beginning to require their employees to return to the office some or all of the time. A working paper published in April by the National Bureau of Economic Research predicts that 20% of full-time working hours will be provided from home once the pandemic is over, 5% earlier.
Assuming that a given 52-week year offers 260 working days in total, which is an approximate 300% increase in working days done at home, a figure that matters when investors try to value Zoom shares as it seeks to move from ‘a pandemic solution to staple the work week. Starting with Monday’s report, Zoom shares rose just 3% this year, which may seem modest given the hybrid work models that many companies are pursuing.
But Zoom shares have returned more than 800% in the roughly 18 months since they began trading in the spring of 2019. Shares have dropped from their highs as vaccines have spread, but continue to trade a 460 % above the place where they closed in his commercial debut.