Zoom posts first billion-dollar revenue quarter

Zoom Video Communications has continued to enjoy massive financial success in the second quarter of 2021 with its now business staple flagship conferencing solution.

For its second fiscal quarter, ended 31 July 2021, the company posted total revenue of $1.022bn, the first time it had passed the billion-dollar revenue landmark for a fiscal quarter, up 54% year on year. Its GAAP income from operations was $294.6m, up from $188.1m in the second quarter of the previous fiscal year.

After adjusting for stock-based compensation expense and related payroll taxes, acquisition-related expenses and expenses related to charitable donation of common stock, its non-GAAP income from operations for the second quarter was $424.7m, up from $277m in the second quarter a year earlier. GAAP operating margin was 28.8% and non-GAAP operating margin was 41.6%.

Zoom’s GAAP net income for the second quarter was $316.9m, compared with $185.7m a year earlier, while non-GAAP net income for the quarter was $415.1m, after adjusting for stock-based compensation expense and related payroll taxes, acquisition-related expenses, gains on strategic investments, undistributed earnings attributable to participating securities, and expenses related to charitable donation of common stock. A year ago, its non-GAAP net income was $274.8m.

Driving the robust revenue growth was equally strong new customer acquisition and expanded existing customer engagement during the quarter. By 31 July 2021, Zoom had 2,278 customers contributing more than $100,000 in trailing 12 months revenue, up about 130% from the same quarter in the previous fiscal year. The company had about 505,000 customers with more than 10 employees, up 36% from the same quarter in the last fiscal year. The company reported a trailing 12-month net dollar expansion rate in customers with more than 10 employees above 130% for the 13th consecutive quarter.

“In Q2, we achieved our first billion-dollar revenue quarter while delivering strong profitability and cash flow,” said Eric S Yuan, founder and CEO of Zoom Video Communications. “Q2 also marked several milestones on our expansion beyond the UC platform. We launched Zoom Apps, bringing over 50 apps directly into the Zoom experience, and Zoom Events, an all-in-one digital events service.

“Today we are a global brand, counting over half a million customers with more than 10 employees, which we believe positions us extremely well to support organisations and individuals as they look to reimagine work, communications and collaboration.”

Going forward, Zoom said it expected third-quarter total revenue to be between $1.015bn and $1.020bn and non-GAAP income from operations to be between $340.0m and $345.0m. It added that for the full fiscal year, it was on track for total revenue of $4.05bn-$4.015bn. Yearly non-GAAP income from operations is expected to be between $1.5bn and $1.51bn.

While Zoom was publishing its quarterly figures, community-built project management and collaboration platform Hive announced that it had raised $10m to deliver the world’s first productivity software platform built by users. The funding round was led by Rembrandt Venture Partners, with participation from Zoom and existing investors Tribeca Venture Partners and Angelpad.

Hive is one of the first startups to receive investment from the recently launched Zoom Apps Fund, a $100m global venture fund to stimulate growth of the Zoom Apps ecosystem.

The company will use the latest funding to build what it said would be the world’s first democratic software platform, where all product decisions are made democratically by users. Hive maintains a public product roadmap where its users can request features they would like to see in the product.

The order in which the features are delivered by Hive’s engineering team is decided by the number of votes that each request receives. Two in three Hive users will get a feature they have requested built within the first year.

One of Hive’s community-driven products, Hive Notes, recently debuted as a standalone collaborative note-taking and task-management app for Zoom Meetings.

“We’re delighted to be a part of Hive’s recent funding round and team up with a company that is hyper-focused on its users,” said Colin Born, head of corporate development at Zoom. “Our goal is to make the meeting experience more engaging and help our customers collaborate seamlessly, and Hive Notes does exactly that. We can’t wait to see what else we can build together.”