Zoom made more money than ever in 2020’s second quarter. At $663.5 million, the videoconferencing platform generated more than four times the revenue it did in the same period last year and it’s raising its projections for the next fiscal year.
The company also added hundreds of thousands of new, major paying users such as ExxonMobil and Activision Blizzard. Zoom says it now hosts about 370,200 customers with more than 10 employees, up by 458% from the second quarter of the previous year.
As more people work from home, businesses are now heavily dependent on remote communication services to stay connected and Zoom has emerged as one of the biggest winners of the shift.
In her opening remarks for the earnings call, CFO Kelly Steckelberg said that nearly 81% of the company’s blockbuster rise was due to subscriptions provided to new customers and the rest from existing customers. In its last quarter as well, Zoom’s revenue grew by 170% to $328 million.
“Our ability to keep people around the world connected, coupled with our strong execution, led to revenue growth of 355% year-over-year in Q2 and enabled us to increase our revenue outlook to approximately $2.37 billion to $2.39 billion for FY21, or 281% to 284% increase year-over-year,” Zoom CEO Eric Yuan said in a statement.
But this spurt in traffic has come at a cost for Zoom. Over the last few months, the company’s software has been the center of several reports that criticized its lax security measures. In April, Zoom was also caught publishing misleading encryption claims on its website. Plus, it has suffered multiple widespread outages, the most recent of which took place just a week ago. Zoom’s decision to leave users on the free plan out of the new privacy protections — so that it can help the FBI catch intruders — was not well received either.
In response, Zoom conducted a 90-day security investigation into its systems and announced the ability to enable end-to-end encryption for calls.
“Although the 90-day initiative is over, security and privacy matters will remain an important part of Zoom’s strategy and DNA moving forward as we strive to maintain our customers’ and other stakeholders’ trust,” Yuan added.
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