Zoom's Revenue Soars 169% As People Flock To Service During Coronavirus Pandemic
SAN JOSE (CBS SF / CNN) -- The Zoom boom is real.
Zoom, based in San Jose, said Tuesday that its revenue skyrocketed 169% from the prior year to $328 million for the three months ending in April, as it became the go-to video-conferencing service for many stuck at home during the pandemic.
The company reported an even more astronomical spike in business customers. There were roughly 265,400 companies with more than 10 employees using its platform, a 354% increase from the year prior.
Shares of Zoom rose nearly 4% in after-hours trading Tuesday following the earnings report. As of Tuesday's close, the stock had tripled since the beginning of the year.
"The COVID-19 crisis has driven higher demand for distributed, face-to-face interactions and collaboration using Zoom," CEO Eric Yuan said in a statement.
Yuan said the pandemic had also resulted in a big spike in Zoom's number of free users, who can host calls up to 40 minutes long before being asked to pay.
While Zoom's business has undoubtedly benefited from greater usage during the pandemic, it's also received unwanted attention.
A host of security issues emerged in early March, including controversies over the level of encryption it provides and the practice of "Zoombombing" — where trolls interrupt meetings to share profanity or pornography — prompting scrutiny from US authorities and temporary bans from schools in New York City and Singapore.
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Zoom responded by scrambling to make fixes, suspending all new features for a period of 90 days in order to focus on privacy and security measures. That 90-day period is set to conclude at the end of next month.
Zoom is also facing growing competition from larger tech companies, including Facebook and Google.
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