Zoho Corporation has posted a rise of 43.3% in its net profit to Rs 2,748.8 crore in the FY22, from Rs 1,917.7 crore in the previous fiscal, as per the company’s latest financials available with the Registrar of Companies (RoC).
The software-as-a-service (SaaS) major also posted a 28.3% rise in its revenue to Rs 6,710.8 crore in FY22 from Rs 5,229.6 crore in the previous year, thanks to a sharp rise in sales of its primary software product Zoho One.
The company’s income from Zoho One jumped 62% to Rs 3,533 crore in FY22, and accounted for about 52.6% of its total revenue from operations. Revenue from enterprise IT management software offerings surged by 4.1% to Rs 3,158 crore in the last fiscal. It also made Rs 20 crore from software updates and maintenance and support licences. In total, it offers more than 55 enterprise tech platforms.
In terms of geographical markets, North America continued to be Zoho’s largest market, from where it made 47.7% of its total income. Europe and Asia were the second and third largest markets, accounting for 22.4% and 13.2% of the total sales, respectively. It also made marginal sales in Africa, Latin America, and Australia.
Zoho was founded in 1996 by Sridhar Vembu and Tony Thomas. It currently serves more than 80 million users spread across more than 150 countries. The company remains completely bootstrapped to date.
Going forward, Zoho is sceptical of the growth it achieved in the last fiscal and predicts a slower year-on-year headway for its global business. “Nobody enjoys such growth forever,” Zoho co-founder and chief executive officer (CEO) Sridhar Vembu had said in an interview with VCCircle in November last year. He also predicted it will take at least two years for things to go back to normalcy from here. “The bigger the bubble, the bigger is the burst.”
Zoho’s expenditure surged 18% to Rs 3,572 crore in FY22 as compared to the fiscal before. It spent the most on employee benefits at Rs 1,826.8 crore, up 5.9% from Rs 1,725 crore in FY21. The Chennai and Texas-based company has more than 11,000 employees across the world. The company, however, has now slowed down its hiring, owing to the tough macroeconomic conditions. “We’re still hiring but very slowly. But the first thing I want is to ensure that the jobs of our employees are safe," Vembu had said.
The company’s advertising and promotional costs jumped more than 2x to Rs 715 crore from Rs 335 crore in the fiscal before. However, it is now lowering its marketing costs to mitigate the impact of the unfavourable situation on the software industry.
But the company will continue to invest in R&D as it helps in increasing the top-line as well as help it save on energy expenses. It also doesn’t plan to increase the prices of its products and services, at least for now.
