Subscribe to read | Financial Times – The 3 Keys to Zoom’s Growth
Research and development. Sales and marketing. General and administrative. Total operating expenses. Undistributed earnings attributable to participating securities. Weighted-average shares used in computing net income per share attributable to common stockholders:. Adjustments to reconcile net income to net cash provided by operating activities:.
Stock-based compensation expense. Amortization of deferred contract acquisition costs. Charitable donation of common stock. Provision for accounts receivable allowances.
Depreciation and amortization. Non-cash operating lease cost. Changes in operating assets and liabilities:. Accounts receivable. Prepaid expenses and other assets. Deferred contract acquisition costs. Accrued expenses and other liabilities. Deferred revenue. Read the print edition on any digital device, available to read at any time or download on the go 5 international editions available with translation into over languages FT Magazine, How to Spend It magazine and informative supplements included Access 10 years of previous editions and searchable archives.
Team or Enterprise Premium FT. Pay based on use. Does my organisation subscribe? Group Subscription. Zoom defines non-GAAP net income and non-GAAP net income per share, basic and diluted, as GAAP net income attributable to common stockholders and GAAP net income per share attributable to common stockholders, basic and diluted, respectively, adjusted to exclude stock-based compensation expense and related payroll taxes, expenses related to charitable donation of common stock, acquisition-related expenses, and undistributed earnings attributable to participating securities.
Zoom defines non-GAAP weighted-average shares used to compute non-GAAP net income per share, basic and diluted, as GAAP weighted average shares used to compute net income per share attributable to common stockholders, basic and diluted, adjusted to reflect the common stock issued in connection with the IPO, including the concurrent private placement, that are outstanding as of the end of the period as if they were outstanding as of the beginning of the period for comparability.
Free Cash Flow. Zoom defines free cash flow as GAAP net cash provided by operating activities less purchases of property and equipment. Zoom considers free cash flow to be a liquidity measure that provides useful information to management and investors regarding net cash provided by operating activities and cash used for investments in property and equipment required to maintain and grow the business.
Zoom defines a customer as a separate and distinct buying entity, which can be a single paid host or an organization of any size including a distinct unit of an organization that has multiple paid hosts. Zoom defines ARR as the annualized revenue run rate of subscription agreements from all customers at a point in time.
For the trailing 12 months calculation, Zoom takes an average of the net dollar expansion rate over the trailing 12 months. Zoom Video Communications, Inc. Consolidated Balance Sheets Unaudited, in thousands.
Consolidated Statements of Operations Unaudited, in thousands, except share and per share amounts. Consolidated Statements of Cash Flows Unaudited, in thousands. Skip to main navigation. March 1, PDF Version. For the fourth quarter, GAAP operating margin was For the fiscal year, GAAP operating margin was Customer Metrics Zoom defines a customer as a separate and distinct buying entity, which can be a single paid host or an organization of any size including a distinct unit of an organization that has multiple paid hosts.
As of January 31 ,. Cash and cash equivalents. Common stock. Additional paid-in capital. Accumulated other comprehensive loss income. Retained earnings. Three Months Ended January 31 ,. Year Ended January 31 ,. Research and development. Sales and marketing. General and administrative. Total operating expenses. Undistributed earnings attributable to participating securities.
Weighted-average shares used in computing net income per share attributable to common stockholders:. Adjustments to reconcile net income to net cash provided by operating activities:.
Stock-based compensation expense. Income tax benefit from release of valuation allowance. Amortization of deferred contract acquisition costs. Losses gains on strategic investments, net. Depreciation and amortization.
Provision for accounts receivable allowances. Non-cash operating lease cost. Charitable donation of common stock. Amortization on marketable securities. I enjoy sharing my experience, knowledge, and mistakes with fellow investors who don’t have time to look at the market.
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Until recently, you might only have heard of the video conferencing tool Zoom if you worked in the tech industry. But since the spread of the coronavirus caused so much of the world to adopt work from home policies , Zoom has become almost synonymous with its function.
Just like Google and Uber are now verbs, so is Zoom. And based on the critical need it now serves, Zoom has evolved from an already-successful IPO to a stock market juggernaut worth more than Uber and Lyft combined. Overall, the company now employs more than 2, people. Long before its IPO last year, there were three key components of its growth strategy that helped give Zoom a competitive advantage.
Eric left Beijing to become one of the founding engineers at Webex back in Under new management, the innovation that had been driving Webex came to a halt. And Eric was growing increasingly dissatisfied with the outdated product they were delivering to customers. As he explained to Forbes :. I was paid very well as a VP at Cisco. But Webex was my baby. In and , I did not see happy customers. I was very embarrassed that I spent so much time on the technology.
Why are the customers not happy? Around 40 engineers left with him. And together they went and built Zoom. After conducting an internal survey, Zoom discovered that their engineering team has more than 1, years of combined experience building video conferencing and real-time collaboration software. To quote Eric :. From the moment we founded Zoom, our main focus has been to provide a cloud video communications solution that would make customers happy.
That focus has continued to guide all our innovations, partnerships, and other initiatives. The main issue people pointed to: It was a crowded market. In addition to Cisco, there were several other established players including Microsoft, Adobe, Citrix, and Polycom, as well as newcomers like Highfive, Join. Me, BlueJeans Network, and Vidyo.
As he told Forbes :. If our product is better than any others, we can survive. We have a relentless focus on making the best product with the best user experience. This is ultimately what every customer wants. Toward this end, we spend much of our time listening to customers and fine-tuning our software to fit their needs. And in many cases, the Zoom team gathers this feedback via Zoom video meetings. Talk about eating your own dog food.
FYI: Zoom decided on 40 minutes because research showed that 45 minutes was the ideal duration for a video conference. In fact, their freemium model, coupled with word-of-mouth, is really what has been powering their customer acquisition.
As Eric explained during an interview with SaaStr :. In our case, we really want to get the customers to test our product.
This market is extremely crowded. We make our freemium product work so well. We give most of our features for free and one-to-one is no limitation. If they like our product, very soon they are going to pay for the subscription. To help you get a better sense of just how many people have been using Zoom over the years, consider this:.
And in March , Zoom reported more than million meeting participants every single day. As a Sequoia spokesperson told TechCrunch :. We had been watching the video conferencing space for many years because we were convinced that it was a huge market primed for innovation. That changed when our portfolio companies started raving to us about Zoom. And they started by targeting one key group:. As an emerging vendor, we had to focus on marketing to the curious, adventurous bunch known as early adopters.
This allows us to leverage our greatest advantage — user experience — because once an early adopter uses a product they love, they will spread the word. So Zoom made the decision to fork over the cash and put up a billboard. And then they decided to put up another billboard. And another.
So, why is the investment in billboards worth it? In , Zoom worked out a three-year deal with the Golden State Warriors, where the team gets to use their technology for free and, in exchange, Zoom gets prominent branding inside the arena during games on scoreboards, digital signs, etc.
As he explained to SaaStr , keeping their existing customers happy has always come first — even if that means slowing down occasionally. Ultimately, we do not want to grow too fast. Our philosophy is we really focus on making our existing customer happy. We do not aggressively pursue the new prospect. Also, we always prioritize the features requested by our existing customers … We truly believe if you do not make the existing customer happy, even if you get more new prospects, it may not be sustainable.
That grounded approach will be more important than ever now, given that Zoom is helping keep so much of the world connected during one of the biggest global challenges of all time. What did it do, and what can you learn?
Zoom is building a product that can sell itself. To quote Eric : From the moment we founded Zoom, our main focus has been to provide a cloud video communications solution that would make customers happy. As Eric explained during an interview with SaaStr : In our case, we really want to get the customers to test our product. To help you get a better sense of just how many people have been using Zoom over the years, consider this: In , 3 million people participated in a Zoom meeting.
In , Zoom had 30 million meeting participants. In , it grew to million. As a Sequoia spokesperson told TechCrunch : We had been watching the video conferencing space for many years because we were convinced that it was a huge market primed for innovation. And they started by targeting one key group: Early adopters.
So, where do you find a bunch of these potential early adopters for your product? The answer: Sitting in traffic on Route , of course — right in the heart of Silicon Valley. Another way Zoom is getting their brand out there? Final thought: Why you should strive for hypergrowth not out-of-control growth. Want to drive Zoom-level growth for your business?
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It zoom stock 2020 graph – none: people through frictionless video, voice, chat and content sharing, grwph enable face-to-face video experiences for thousands of people in a single meeting across disparate devices and locations. Any repurchased shares of Class A common stock will be retired. Skip to main navigation. This chart shows quarterly revenue of Zoom Video Communications. Non-cash operating lease cost. As these are emerging leaders, the due diligence required is even more crucial.
Weighted-average shares used in computing net income per share attributable to common stockholders:. Read on to find a slew of interesting Zoom statistics for Accrued expenses and other liabilities. Adjustments to reconcile net income to net cash provided by operating activities:. Skip to main navigation. InvestorPlace 4d.
