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Look at what the coronavirus pandemic did to Zoom’s bottom line

Zoom reported a blowout quarter on Tuesday, June 2, after the videoconferencing tool experienced a massive uptick in usage during the coronavirus pandemic.

The California-based company revealed this week that the February-to-April quarter — when virus-related lockdowns prompted companies, schools, friends, and family to communicate from home — saw Zoom rake in a whopping $328 million, more than double for the same period last year when it generated $122 million. Profit came in at $27 million.

While the online communication tool has a free tier for basic use, Zoom makes most of its money from companies paying from $15 a month for more advanced features and support.

Its latest financial data shows that Zoom now has around 265,000 customers with more than 10 employees, marking a year-on-year increase of a whopping 354%. The company said it’s also added more than 100,000 K-12 schools around the globe as more children participate in online lessons during school closures caused by the pandemic.

Zoom doesn’t reveal how many people in total use its software, though in April it said it’d reached 300 million daily meeting participants, up from just 10 million in December 2019. A meeting participant is counted as the member of a meeting, so a single daily active user will be counted multiple times as a meeting participant if they join more than one session in a single day.

Zoom founder and CEO Eric Yuan said his team felt “humbled by the accelerated adoption of the Zoom platform around the globe.” adding, “Use cases have grown rapidly as people integrated Zoom into their work, learning, and personal lives.”

Not all smooth sailing

But the sudden increase in users earlier this year threatened to overwhelm the Zoom team as it grappled with a slew of issues that prompted some people to abandon the software and seek other video chat platforms.

They included complaints about poor security protection, with some users experiencing “zoombombing” incidents in which pranksters interrupted meetings with offensive material. Yuan said in April that unlike its established community of business and enterprise customers, many newcomers to Zoom didn’t have proper IT support and so failed to set up the software correctly. He admitted they should have done more to help new users, and the company has since updated the software to include added protections from the start.

Privacy concerns were also raised when it was discovered Zoom’s iOS app was sending some user data to Facebook, something that was not made clear in the app’s privacy policy. Zoom has now stopped this practice. It also ran into trouble over claims that calls had end-to-end encryption when this isn’t strictly true. It recently said it’s planning to add the feature for paying customers.

Zoom expects even better financial results for its next quarter, eyeing revenue of around $500 million. Challenges include retaining paying users as the pandemic subsides and people return to the office, though Zoom will be hoping that for many, working from home will be the new normal.

Yet to try Zoom? Digital Trends has a page with all you need to know.

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Trevor Mogg
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