Zoom has reported a huge surge in revenue for the first quarter as the video conferencing app enjoys booming demand during the coronavirus lockdown.
The California-based company posted revenue of $328.2m (£260.8m) in the first three months of the year, an increase of 169 per cent on the same period in 2019.
Zoom also lifted its full-year revenue forecast to between $1.78bn and $1.8bn, up from a previous range of $905m to $915m, as millions of people turned to the video app for work and socialising during the pandemic.
Net profit also jumped to $27m from just $200,000 last year.
But while the virus has proved a major cash cow for Zoom, it has also pushed up costs as the tech firm overhauls its business model to cope with the increased demand.
The company’s cost of revenue was up 330 per cent to $103.7m, lowering its gross margin from 80.2 per cent to 68.4 per cent as it spent more on cloud computing services from Amazon, Microsoft and Oracle to handle increased traffic.
On a call with investors chief executive Eric Yuan said Amazon currently provided the majority of new capacity it needed to cope with higher demand.
However, he said Zoom would invest in expanding its own data centres in a bid to improve efficiency and boost the firm’s profit margins.
Zoom said it had reached peak usage of 300m daily meeting participants in April — a huge increase on the 10m recorded in December before the coronavirus outbreak.
This figure dipped in May, but the firm said it was confident user numbers would rise above 300m again.
Zoom said it now boasted roughly 265,400 paying customers with more than 10 employees, marking a year-on-year increase of 354 per cent.
The video platform has faced intense scrutiny over its security and privacy practices in recent months after a number of bugs were exposed.
But the firm has vowed to resolve any security flaws in its software and has seen its share price more than triple since the beginning of the year.
Per Roman, co-founder and managing partner of GP Bullhound, hailed an “extraordinary quarter for Zoom”.
“Adoption of Zoom as the de-facto standard for video communication is well under way. I am already seeing Zoom being used as a verb similar to Google, which is not to be under-estimated for long-term stickiness,” he said.
“However, their success has been well noted for a long time by the stock market and the company is priced to perfection. There needs to be many quarters of continued extraordinary growth to catch-up with their $58bn market capitalisation.”