Zoom Profits Soar in Q1 After Strong Customer Growth during Pandemic

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Zoom Video Communications saw its revenue nearly tripled in its fiscal quarter to April. From $122-million a year earlier to $328-million in Q1. The company saw a massive jump in meeting participants during the month of April as worldwide lockdowns began, with over 300-million participants on the platform.

This is as more and more people have adopted the videoconferencing platform while at home during the COVID-19 pandemic.

Telecompaper reports that the company’s operating profit jumped to $23.4-million from $1.6-million a year ago, and adjusted net profit earnings rose to 20 cents a share from $0.03, double the company’s initial forecast.

Zoom says the better-than-expected results were driven by customer growth. It had around 265,400 business customers with more than 10 employees at the end of the quarter, up 354% from April 2019. The number of customers generating more than $100,000 in revenue in the past 12 months nearly doubled year-on-year to 769.

The company raised its outlook for annual revenue to USD 1.775-1.800 billion, based on the increased demand for remote work solutions for businesses.

It also assumes increased churn in the second half of the fiscal year due to a higher percentage of customers who purchased monthly subscriptions in the first quarter. Adjusted operating profit is estimated at $355-$380-million and adjusted EPS at $1.21-$1.29 in the full year.

Zoom ended the quarter with $1.1 billion in cash and equivalents. For fiscal Q2, Zoom forecast revenues of $495-$500 million, so another large increase is expected from the company as the globe settles into the new normal of the lockdown.

Improvements to Security Features

After a shaky start to Q1 where the videoconferencing service was riddled with security and privacy flaws, Zoom began to pay closer attention to patching out these issues.

On 9 May, Zoom unleashed a series of new features aimed at helping the platform rid itself of security exploits. New features include:

  • Passwords will be required for all meetings, including new meetings, previously scheduled meetings and those using PMI (Personal Meeting IDs)
  • Waiting Rooms for PMI will be turned on by default
  • Screen-sharing privileges will be Host-Only by default

Zoom hopes that these features and “enhanced protections will help enable [their] free users to securely meet right out of the box.”

Edited by Luis Monzon
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