Zoom has seen huge growth this year. And has seen a blockbuster quarter as its videoconferencing app has become the hottest service of the pandemic. In an earnings report today, Zoom reported making $328 million in revenue during its February–April quarter. That’s up far more than double from the same time last year when it made $122 million, and it comes in well above the $200 million that Zoom expected it would make when it issued guidance just a few months ago.
It is still not clear, how exactly how many people used Zoom software over the past few months, but the company claims it added an “unprecedented number of free participants,” including more than 100,000 K-12 schools. The company now has around 265,400 customers with more than 10 employees, a number that’s grown 354 percent, the company says, and it added 175,000 licenses for new customers. That significant increase in usage has come with a significant increase in costs, though — expenses doubled year over year to $201 million.
The company’s earnings report is it’s first since the pandemic was declared, which offers a deeper look at how the company performed as its video chat software becomes the de facto tool for work meetings and staying in touch with family and friends while much of the world is stuck at home. Zoom previously said that usage has grown to 300 million meeting participants each day, up from just 10 million in December. That figure has since fallen from its peak in April. But certainly, over the long term, the company expects it to grow beyond that 300 million number.
Not all has been rosy for the video conferencing company, it has faced incredible scrutiny of its security practices. The company was heavily criticized for implying its video chats were fully encrypted when they were not. Features meant for convenience also enabled harassment through Zoom bombing, which recently happened to Airtel during a conferencing call.
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Zoom tackles security
In response, Zoom instituting a 90-day feature freeze while it overhauled the app’s security practices. Features, like actual end-to-end encryption, are being worked on. In May, Zoom acquired the identity service startup Keybase and directed its engineers toward working on an end-to-end encryption solution.
All these changes are meant to ensure that, as its usage increases, such that Zoom doesn’t lose users over security concerns. And so far, it seems like Zoom expects its success to continue. Zoom predicts a huge next quarter, more than tripling its previous revenue. The company expects to make upward of $1.8 billion in revenue over the course of the year. Zoom does, however, expect to see increased customer losses in the second half of the year simply because of how many new users it’s picked up.
