Greg de la Cruz works at NCR Corp's R&D center in the Philippines. He is interested in economic history and current world financial affairs.
Overstated as it is, the COVID-19 pandemic adversely affected the global economy in 2020, decimating countless businesses, small and large, and delivering losses to the ones that managed to survive. But it’s no secret that there were companies who profited quite well during the early stages of the pandemic in 2020, whether it was because they were more prepared than most or better poised or were just lucky.
For this list, I did my best to be as industry-diverse as possible while only mentioning well-known brands. And it was also my intention to name companies who profited significantly—not just those who managed to stay in the plus-zone but in reality experienced a year-on-year decline. The stories of how these companies became more valuable during the course of the pandemic will probably serve as lessons to other companies who either went out of business or were just scraping by to continue existing. Let’s jump right in and go over this short list of 6 notable companies who profited during the pandemic.
- 2020 Net Income: $6 billion
- Year-on-Year Revenue Growth: 24%
Aside from the noticeable bump in profit, Accenture also posted a revenue growth of 24 percent, which meant they really grew their business during the pandemic. They also had free cash flow of over 2 billion dollars in the fourth quarter and over 8 billion for the whole year. Accenture ended up in better financial health after 2020, which only very few Fortune 500 companies can boast.
Where’s the money coming from, you might ask? Accenture is perhaps the most prominent professional services company in the entire world, despite only being ranked 258th overall by Forbes for 2021. Its revenue comes from at least five main industry groups, namely: (1) Communications, Media & Technology, (2) Financial Services, (3) Health & Public Service, (4) Products, and (5) Resources. Accenture was one of the major beneficiaries of the world’s shift to remote work—companies relied on the services provided by virtual workers, especially field professionals, of which Accenture has rich pickings from its 600,000+ global workforce.
- 2020 Net Income: $21 billion
- Year-on-Year Revenue Growth: 38%
Did 2020 spell the demise of physical, in-store retail? Thankfully, it did not. But for some time, many thought that because people were locked inside their homes or at least highly encouraged to do so, that the future belonged solely to online retail. While there are strong indications that online retail will only continue to grow astronomically in the coming years, 2021 showed that physical retail is still here to stay. That said, the company that quite obviously benefited the most due to a surge in demand for online retail was Amazon.
The majority of Amazon revenues in 2020 were via net product sales. This means that the turnover for the year resulted mostly from the sale of the company’s products that were not combined or proposed to be combined with proprietary technology or products of another company or person. Amazon’s 21-billion-dollar profit for 2020 sounds outrageous because some companies in the Fortune 500 can’t even hit 20 billion dollars in annual revenue.
3. TikTok (ByteDance)
- 2020 Net Income: (loss) -$2 billion
- Year-on-Year Revenue Growth: 111%
That is not a typo—there are really three digits on that metric. Why did I include a company which didn’t post a profit in 2020? Because while I’m technically wrong for including on this list a company that operated at a loss during the first year of the COVID-19 pandemic, the over 100-percent increase in revenue is something impossible to ignore.
The insane bump in revenue reminds you how startups don’t really care much at first whether they make a profit or not—they’re all about capturing the market. Remember that Amazon took 7 years before it actually made a profit (after laying people off during the first profitable year). TikTok, which was only founded back in 2016, turned a profit in 2019. But with astronomically more users signing up in 2020 because people had nothing much to do at home, it didn’t care much about being on the plus-side by end-of-year.
- 2020 Net Income: $671 million
- Year-on-Year Revenue Growth: 317%
Here’s another obvious winner of 2020—Zoom. Despite not being the only mainstream videoconferencing service available—don’t forget about Google Meet, MS Teams, Webex, and of course, the fallen Skype—Zoom became the household meeting app over the course of the pandemic. And let’s not ignore those numbers. A 300+ percent increase in revenue?! That’s ridiculous.
What’s even more ridiculous is that Zoom’s revenue back in 2019 was $623 million, and their net profit for 2020 exceeded that. Has something like that ever happened before? The normal phenomenon is a steady increase in revenue, with net profit being a percentage of it. But actual net income exceeding the revenue of the year before? That’s unheard of.
Zoom as a startup founded in 2011 fulfilled its hockey-stick projection better than any other startup in recent memory. What more can be said about Zoom’s 2020 miracle run: a 2,900% increase in meeting participants, a 383% percent increase in valuation, and an almost 4,000% increase in net income. Unprecedented.
- 2020 Net Income: $2.7 billion
- Year-on-Year Revenue Growth: 24%
Netflix got heavy competition in the years leading up to the pandemic, but going into 2020, it was still the No. 1 streaming service in the world, posting a revenue of $25 billion. Unlike its competitors, Amazon Prime and Disney Plus, it doesn’t have a gigantic conglomerate backing it, but its wisdom in a field it dominates made it grow even further during the pandemic. Its revenue growth is more modest than the others on this list but still quite impressive considering the A-players sharking over market share.
Did streaming in 2020 change the movie industry forever? That still remains to be seen. There’s still hope for watching movies inside cinemas, but that doesn’t mean the dent Netflix left will be soon forgotten.
- 2020 Net Income: $721 million
- Year-on-Year Revenue Growth: 28%
Elon Musk unseated Jeff Bezos to claim the title for the richest man in the world in 2020, and his lead only grew further as the valuation of Tesla continued to grow cosmically. Musk’s streaking continued in 2021 as he added $121 billion to his fortune, which is already more than Warren Buffett’s own net worth. Tesla’s revenue and income numbers may not yet be comparably significant, but it did post its first full year of profitability in 2021. The market seems to believe in the magic that Elon Musk does, as Tesla has reached over a trillion dollars in value.
Should All Companies Be Excused for Laying Off Workers Because of the Pandemic?
This question goes a bit off-topic because the list here talks about organizational success rather than the difficult choices companies have to make. This is a friendly reminder that even if companies post record profits and achieve unprecedented revenue growth, they still won’t hesitate to get rid of workers if it results in even better numbers.
The short answer to the question is no—not all companies should be excused for letting people go because of the pandemic. The early stages of the pandemic created a fog that companies could then capitalize on and use as an excuse to streamline their business. The hidden purpose for making this list was creating awareness around the fact that there were companies who got even richer because of the pandemic—and these six weren’t the only ones. Do you know of companies who laid people off in 2020 because “their business suffered” despite actually ending up with very good numbers?
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.