Zoom has seen a huge increase in subscribers – and revenues – thanks to the pandemic

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Zoom had a successful quarter as its application has become the most popular videoconferencing service in the pandemic. In a earnings report released today, Zoom said it made $ 328 million in sales during its February to April quarter. That’s far more than doubling from the same time last year, when it made $ 122 million, and it far exceeds the $ 200 million that Zoom expected it would make when it released guidance just a few months ago.

Zoom doesn’t say exactly how many people have used its software in the past few months, but the company says it has added an “unprecedented number of free participants,” including more than 100,000 K-12 schools. Zoom now has approximately 265,400 customers with more than 10 employees, a number that has increased by 354%, according to the company, and has added 175,000 licenses to new customers. This significant increase in usage has been accompanied by a significant increase in costs, however – spending has doubled year over year to $ 201 million.

Results report, Zoom’s first since the pandemic was declared, provides a deeper insight into the company’s performance as its video chat software becomes the de facto tool for business meetings and to stay in contact with family and friends when much of the world is stuck. House. Zoom previously said usage increased to 300 million meeting attendees every day, down from just 10 million in December. That figure has since dropped from its April peak, said Zoom CFO Kelly Steckelberg when calling investors, but “certainly in the long term, we expect it to exceed that figure by $ 300 million.” “

At the same time, Zoom has faced an incredible review of its security practices. The company has come under heavy criticism for hinting that its video conversations were fully encrypted when they weren’t. Convenience features also allowed Zoom bombing harassment, while the app’s Mac installer was captured using a “malware-like” approach to speed things up.

Zoom responded by instituting a 90-day feature freeze while it reviewed the application’s security practices. Many of the more serious issues – like the questionable installer and the handy features that allowed people to make calls without being asked – have been fixed or improved. Other features, such as end-to-end encryption, are under development. In May, Zoom acquired the identity service startup Keybase and directed its engineers to an end-to-end encryption solution.

These changes are intended to ensure that, like its speech bubbles, Zoom does not lose users due to security concerns. And so far, it looks like Zoom expects its success to continue. Zoom predicts a huge next quarter, more than tripling previous revenues. The company plans to generate more than $ 1.8 billion in revenue over the course of the year. Zoom however predicts an increase in customer losses in the second half of the year simply due to the number of new users it has recruited.

Although Zoom is increasingly used by consumers, not just the businesses and commercial customers for whom it was designed, Zoom CEO Eric Yuan suggested that the company did not intend to to start developing a consumer-specific product beyond the free calling experience it already offers. The zoom should have the “same experience,” regardless of how you use it, Yuan said when calling investors. “Our strategy is to provide service no matter what you do, no matter what device. “

Right now, Zoom’s top priority is simply to keep its servers up and running, said Yuan, “because so many people rely on Zoom to stay connected. “

Zoom’s shares have tripled in value in the past few months, to around $ 200 before today’s earnings, from around $ 68 at the start of the year. The company went public in April 2019 for $ 36 per share.

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