Popular videoconferencing app Zoom recorded a 355 per cent increase in revenue in the second quarter of this year as it earned $663.5 million. The revenue jump was boosted significantly by the coronavirus (COVID-19) pandemic, which has forced many to use the app for meetings and events.
With the Q2 result, Zoom surpassed analysts’ projection of $500.5 million for the Q2. The company’s profits soared to $186 million, while customer growth rose 458 per cent, compared with the same period in 2019.
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Zoom's shares hit a record high on Monday, closing at $325.10, as the firm raised its annual revenue forecast by more than 30 per cent to the range of $2.37bn-$2.39bn, from its previous projection of $1.78bn-$1.80bn.
Key to Zoom's success was its ability to add paying customers - high-budget corporate clients - as opposed to those who use its services for free.
The company said that its large customers - firms that generated more than $100,000 in revenue in the past year - doubled to 988 during the quarter. Zoom, together with rivals Cisco Webex and Microsoft Teams, have all seen a surge in usage of their video conferencing platforms since coronavirus lockdown measures were imposed by multiple countries in March.
But Zoom's soaring popularity has also strained its infrastructure, with some outages last week as schools in many parts of the US resumed classes virtually. Its reputation also took a hit, as the new attention prompted hackers to hijack meetings and exposed a host of security flaws, revealing that the firm had sent user data to Facebook, had wrongly claimed the app had end-to-end encryption and was allowing meeting hosts to track attendees.
Zoom has also faced political scrutiny for its ties to China - where it has more than 700 staff, including most of its product development team - which have prompted warnings that it is not fit for government use.