Technology

Zoom sees revenue grow 169% due to COVID-19, and plans to earn more than $1.7 billion in 2020

Zoom had an approximately twentyfold increase in its annualized meeting minutes run rate

Zoom sign and logo is displayed on startup headquarters in Silicon Valley.
Zoom is making a 90-day plan to restructure security in the platform. Photo: Shutterstock
  • At the conference with analysts, Eric S. Yuan, founder, and CEO at Zoom said that these results would not have been possible without Zoom’s partnership with cloud service companies: Amazon’s AWS, and Oracle;
  • And spoke about the security and support failures that occurred during the crisis, due to the unexpected growth of the tool’s user base.

On Tuesday, Zoom announced its Q1 results for the fiscal year of 2021, which exceeded (and by far) market forecast. As expected, the company was benefited by the isolation measures imposed by the COVID-19 pandemic, which forced companies, governments, and individuals, in general, to use digital communication methods to continue their activities.

READ ALSO: Targeting Zoom and Houseparty, Facebook’s Messenger Rooms goes live worldwide

As a result, in the quarter ended on April 30th, the company saw its total revenue rose 169% on a year-on-year comparison, to $328.2 million (investors expected something around $203 million), and its number of customers with more than 10 employees rise 354%, to 265,400.

READ ALSO: Looking for a more safe tool, Zoom acquires secure messaging service Keybase

At the conference with analysts, Eric S. Yuan, founder, and CEO at Zoom said that the company had an approximately twentyfold increase in its annualized meeting minutes run rate, which jumped from 100 billion at the end of January 2020 to over 2 trillion meeting minutes in April.

During the conference, he stressed some metrics that illustrate the demand experienced by the company in the past quarter:

  • One new banking customer deployed approximately 175,000 new Zoom enterprise licenses;
  • Usage by customers in the Global 2000 grew over 200% sequentially;
  • The company register a peak of over 300 million daily participants, free and paid, joining Zoom meetings;

According to Yuan, these results would not have been possible without Zoom’s partnership with cloud service companies: Amazon’s AWS, and Oracle.

“When the pandemic crisis started, our own data centers could not scale fast enough to handle the unprecedented traffic. Fortunately, some of the top public cloud providers were there to help. Immediately during the crisis, our longtime partner AWS and its CEO Andy Jassy enabled us to
meet this rapidly increasing demand. As our demand increased and we had limited visibility into the growth, AWS was able to respond quickly by provisioning the majority of the new servers we needed, sometimes adding several thousands a day for several days in a row. In April, our customer Oracle also showed great support to help us. Not only did Larry Ellison
record a great video to encourage our team to do the right things for the world, but he also offered Oracle cloud support. We also provisioned a number of servers in the Oracle cloud as the demand for Zoom continued to increase,” stated Yuan during the conference.

Zoom’s CEO also spoke about the security and support failures that occurred during the crisis, due to the unexpected growth of the tool’s user base. To addressed these problems, Zoom enacted a 90-day plan initiative on security and privacy with a weekly webinar for customers; acquired Keybase to add engineering expertise to build an end-to-end encrypted meeting mode, and released Zoom 5.0 with new security features and enhancements to give customers unparalleled control over their meetings and data.

“During this period of unprecedented usage growth and negative PR, as CEO of Zoom, I was facing tremendous pressure. I reached out to the high-tech community and received great support from fellow CEOs, and I can’t thank them enough for their advice. I’m also deeply grateful to see the strong support from valued enterprise customers, such as CEOs from Atlassian, Equinix, HubSpot, Okta, PagerDuty, Poly, SurveyMonkey, and many others, both through public statements and video testimonials”, stressed Yuan.

For the second quarter, the company expects the revenue to reach something between $495 and $500 million. For the full year, the company’s guidance is for revenue in the range of $1.775 to $1.800 billion, which would be mean a 185% to 189% year-over-year growth.