Zoom Could Speed Lower When IPO Lockup Expires

In 2017, Forbes Media LLC produced a study that showed 62% of organizations utilize three or more conferencing solutions. The respondents noted the difficulty in addressing multiple communications needs and the expense of managing those disparate solutions. Zoom Video Communications addresses those needs and reduces the expenses to manage them.

The company’s clients include Uber (NYSE:UBER), Zendesk (NYSE:ZEN), Caesars Entertainment (Nasdaq:CZR), Autodesk (Nasdaq:ADSK), GoDaddy (NYSE:GDDY), Atlassian (Nasdaq:TEAM), Slack (NYSE:WORK), Arista, Nasdaq (Nasdaq:NDAQ), Dropbox (Nasdaq:DBX), Logitech (Nasdaq:LOGI), and Pandora (OTCPK:PNDZY), among others.

Zoom Video Communications has approximately 1,700 employees and keeps its headquarters in San Jose, California.

Company information sourced from the firm's website and S-1/A.

Financial Highlights

Zoom Video Communications reported second-quarter financial highlights for the period ending July 31, 2019:

  • Revenue was $145.8 million for an increase of 96% versus the second quarter last year.
  • GAAP income from operations was $2.3 million versus $3.4 million for the same period last year. GAAP operating margin was 1.6% for the second quarter and non-GAAP operating margin was 14.2% for the same period.
  • GAAP net income attributable to common stockholders was $5.5 million. This equaled $0.02 per share versus $0.00 per share for the same period last year.
  • Total cash, cash equivalents, and marketable securities equaled $755.3 million.
  • The company had approximately 66,300 clients for an increase of 78% versus the same period last year.

Financial highlights sourced from the firm's website.

Management

Founder Eric Yuan serves as President, CEO, and Chairman of the Board of Directors. He previously served at Cisco Systems (Nasdaq:CSCO) and WebEx Communications. He earned a degree in applied math at Shandong University of Science and Technology. In addition, he earned a Master’s degree from China University of Mining & Technology.

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Disclosure: I am/we are short ZM.

Disclaimer: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any ...

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