Video-conferencing company Zoom Video Communications Inc. did not disclose the total number of customers using its platform, but said that around 433,700 organisations with over 10 employees were using its service as of September 2020, growing by 485% YoY. This segment alone made up 62% of revenue. This growth in the user base was higher than the 355% YoY growth reported in the previous quarter.
The company has 1,289 customers contributing over $100,000 in revenue, trailing 12 months, up by 136% YoY; this is an increase of 300 customers over the previous quarter, it said. In Q3, customers with 10 or fewer employees represented approximately 38% of revenue, up from 36% in Q2.
The company’s revenue tripled, primarily driven by new customer subscriptions which accounted for 81% of the increase. This demand was broad-based across products, industry verticals, geographies and customer cohorts, Zoom’s chief executive officer Eric Yuan said on the earnings call. A significant presence of usage was from both free and paid participants in the education sector. There was no significant change in the overall deal sizes with new customers, he said, adding that customers who first begin with using Zoom Meetings, tend to add Zoom Phone as well, such as Rakuten and Peloton.
Zoom’s Americas business grew by 300% YoY, and combined APAC (Asia Pacific) and EMEA (Europe, Middle East, Africa) revenue grew 629% YoY. Zoom Phone was the fastest growing product in Q3, and is expected to be a key driver next year.
End-to-end encryption on Zoom, which was announced in October on a “technical preview”, is available for free and paid customers with upto 200 participants. Feedback from customers has been positive, and “we haven’t seen any impact that would indicate that we need to approach our go to market any differently with it”, Steckelberg said.
The company has focused a lot on privacy and security on a global basis over the past nine months, with continued investments and setting up teams in local markets, Zoom’s chief financial officer Kelly Steckelberg said. Remote work trends are here to stay even with good news on the vaccine frontier, she added. Zoom hopes some of its new features will help companies which might be thinking about going back to work in a hybrid environment.
The company’s long term Research & Development target is around 10%, and is expected to increase with expansion in different geographies. “Working remotely has really enabled us to do that and define great talent in multiple locations in the U.S., and also continuing to expand as we’ve talked about previously in India, as well,” Steckleberg said.
- Revenue: $777.2 million, up 367% YoY
- Income/Loss: Loss of ₹1.7 million
- Net income: ₹198.4 million, an improvement over losses of $1.7 million in the same quarter the previous year