Videoconferencing company Zoom’s Q2 revenue quadrupled, with a 355% year-on-year growth. Zoom CEO Eric Yuan said the use cases keep rolling in, and the service has been used for virtual jury trials, virtual property tours, and for providing mental health services. Going forward, Zoom hopes to see accelerating shifts from legacy PBX systems to cloud services like its own. This quarter, the company onboarded ExxonMobil and gaming company Activision Blizzard as enterprise customers.
Zoom’s new customers drove growth, contributing to 81% of revenue in Q2. In total, Zoom has 370,000 customers with over 10 employees. International revenue grew 629% YoY and accounted for a third of Q2 revenue. Yuan said there are plans to dedicate a team to capture growth from international expansions.
In response a query on structural changes in Zoom’s R&D effort, and if it was related to geopolitical pressure, Yuan said “we take privacy and security extremely seriously” and it’s going to double down on them. “We look at a lot of new usage not only for enterprise, but also, education, head to [sic] schools and telemedicine, there’s so many use cases.” Zoom faced flak after it announced a few months ago that end-to-end encryption would only be offered for paid customers. Soon after, the company began offering it to all users starting July.
“We have to find more talents in a timely manner. And that’s why, you know, we opened up two R&D offices in Phoenix and in Pittsburgh,” Yuan said. He added that Zoom also hired a president of product and engineering for China. Zoom’s Kelly Steckelberg said the company does not have any plans to move engineering talent out of China, Steckelberg said. Instead, it will focus on diversifying by hiring from the U.S. and India.
Zoom Phone was authorized to move legacy telephone systems at US federal agencies to Zoom. Zoom Phone itself was expanded to 25 more countries. Zoom expects more and more customers who have stuck to PBX systems so far to shift to Zoom Phone over the next 12-18 months, Yuan said. Zoom also provides local telephone service and domestic calling in over 40 geographies.
- Revenue: $663.5 million, 355% YoY growth
- Growth in customers with over 10 employees: 458% YoY. 105,000 customers were added in Q2, the second highest number of adds in any quarter, totaling to 370,000 customers.
- Revenue from customers with 10 or fewer employees: 36% (of total revenue), up from 30% in Q1. “The increase in customers with 10 or fewer employees continues to shift our billing mix as these customers generally pay monthly, rather than annually as do most enterprise customers,” Zoom said.