Zoom Video Communications Inc. made a name for itself during the coronavirus pandemic. Millions of people use its online video service for free – but businesses still have to pay for it to survive.
It was shown on Monday that this is happening – and some more. Zooming
Reported another amazing quarter as consumers, schools, and all types of businesses continue to use the service while seeking protection, with stocks rising 22% in after-hours trading. While most people are using Zoom for free, more and more companies are signing up for big money deals.
Eric Yuan, Zoom's chief executive, pointed out some key new customers – Exxon Mobil Corp.
and Activision Blizzard Inc.
– during a conference call on Monday afternoon. Exxon is using Zoom as a communication platform for its teams, customers and partners around the world, while Activision plans to replace its legacy video conferencing products with Zoom.
Zoom announced that it added 219 customers in the second quarter, each of whom spent more than $ 100,000 in the past 12 months. This is the best quarter ever for attracting high-volume customers. Zoom addresses 1,000 customers of this size and reaches 988 by the end of the quarter on July 31.
Zoom also said it has expanded its contract with ServiceNow Inc.
Signed a contract with the cloud software company for Zoom Phone, the company's system to replace legacy PBX systems; With more employees working from home, these PBX systems often sit idle while employees use their own phones for work. Zoom expanded this service internationally in the second quarter and introduced a hardware-as-a-service offering that enables large corporate customers to sell more services and thus generate more revenue.
"We see continued growth in both new and existing customers and tremendous opportunities, especially in the webinar and Zoom Phone," said Kelly Steckelberg, Zoom's chief financial officer, told analysts. “We signed our largest Zoom Phone contract to date in the second quarter. It's so exciting to see this ongoing dynamic. "
Zoom's smaller customers are also growing rapidly, but could be more volatile for Zoom's financial data. Zoom ended the quarter with approximately 370,000 customers with 10 or more employees, with 105,000 added in the second quarter, bringing the smaller businesses from 30% to 36% of Zoom's revenue.
However, executives admitted that these customers are more likely to turn to other services and that monthly rather than annual payments could make them more vulnerable to price volatility. They're also the most obvious targets for Zoom competitors – like Alphabet's Google Meets
, Microsoft Corp.
Teams and WebEx from Cisco Systems Inc.
– to poach.
By closing more bang for the buck, expanding its offering beyond video conferencing, and growing its base for smaller corporate customers, Zoom continues to prove that it is a force even after the pandemic ends. Yuan predicted that the nature of work will change dramatically upon return to the office, although everyone will be working from home for the foreseeable future, so Zoom is still an important part of everyday life.
"When you look at a lot of companies that have a very large [open] space, I think this may not work in the future," he said. He also said that staff might work in the office two or three days a week and work at home the other days, not needing many small offices with few employees. "It's very, very likely that it's a hybrid," he said.
Indeed, Zoom stands ready to continue reaping the benefits as the future of work is likely to be more the same as many are currently experiencing.