Business

After a strong fourth quarter (ended Dec. 31) and surpassing its $1 billion annual revenue target in 2020, Zendesk is upbeat about its growth prospects in 2021, according to Mikkel Svane, its CEO and founder.

“In the fourth quarter, we observed really robust demand for our solutions from both new and existing customers, and we are entering 2021 with strong momentum,” he said Feb. 4 during an earnings call with analysts.

The company also believes that “many of the changes brought to us by” the COVID-19 pandemic “will accelerate the shift to online first business models,” he said.

“You have already seen and will continue to see that shift reflected in our products, in our packaging, in our pricing, and in all our offerings,” he said.

Zendesk was seeing positive signs in its business in the back half of 2020 despite ongoing COVID-19 challenges, company executives said in December, while speaking at the UBS Global TMT Virtual Conference. “We feel we have recovered nicely from Q2, which was, as we all know, a challenging quarter as the pandemic emerged,” noted Elena Gomez, the firm’s CFO, who the company announced Feb. 4 is leaving the company after remaining on for a “transition period at least through” the release of its Q1 results.

Zendesk is “very proud of our achievement here in 2020, and we believe it lays a strong foundation for us as we seek to more than triple our revenues over the next five years,” Svane told analysts Feb. 4.

The strength that Zendesk saw in Q4 was “reflected in the growth rates of ticket volume and our gross bookings,” the company said in a shareholder letter Feb. 4. “In 2020, the level of traffic on our platform has increased meaningfully” from 2019, it said.

“After the initial shock of the pandemic, quarterly new business and expansion bookings grew nearly 60% from the end of Q1 2020 to the end of Q4 2020,” it said in the letter, adding: “We observed the strongest year-over-year new business bookings growth in three years.”

The company recently introduced a new Zendesk Suite, a complete customer service solution that it said in the letter was “built upon the strong adoption of our omnichannel solutions.”

Instead of offering a “complicated menu of individual products, plans, and add-ons, we are aggregating our service capabilities into a single offering where customers can select from five new comprehensive plans that fit their budget and maturity,” it said in the letter.

The new Zendesk Suite “makes it easy for organizations to engage with their customers by providing a personalized and effortless customer engagement across any channel or device,” it said, adding: “Social and native messaging capabilities are at the centerpiece of the new Zendesk Suite. We enhance that conversational experience by enabling the rich capabilities that messaging supports and incredible opportunities for automation and self-service that messaging can unlock.”

Also offered by the new Zendesk Suite are “enhanced omnichannel capabilities, a powerful unified agent workspace, robust and flexible analytics, and the ability to extend, integrate, customize, and build powerful solutions by leveraging our open and flexible platform, including a diverse ecosystem of ready-to-use apps and integrations available in our marketplace,” it said.

Zendesk’s Q4 revenue increased 23% from a year earlier to $283.5 million. For the fiscal year, revenue jumped 26% to $1.03 billion.