Zoom’s dream run continues despite privacy scare; company records 169% jump in revenue in Q1 2020

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Published: June 3, 2020 2:47 PM

At $328.2 million, Zoom’s total revenue for the quarter was up 169% year-over-year, beating its own expectations.

ZoomZoom has come up and assured users that it takes their security extremely seriously. (Photo credit: Reuters)

Despite its countless privacy and security flaws, Zoom continues to march on, raking in more and more users (free as well as paying), and making more and more money. The San Jose headquartered cloud-based video conferencing platform announced its financial results for the quarter ended April 30, 2020 on Wednesday, and numbers seem to suggest that it (has) struck gold amid the ongoing COVID-19 crisis. It’s understandable why that is, but, Zoom’s also been riddled with lots of controversy, and yet somehow, it managed to come out of it, with flying colours no less.

At $328.2 million, Zoom’s total revenue for the quarter was up 169% year-over-year, beating its own expectations. Which is why, Zoom is also updating its outlook for the fiscal year 2021 (also for the second quarter fiscal year 2021), setting revenue expectations between $1.775 billion and $1.800 billion, bolstered by (growing) demand for remote work solutions for businesses. “We were humbled by the accelerated adoption of the Zoom platform around the globe in Q1. The COVID-19 crisis has driven higher demand for distributed, face-to-face interactions and collaboration using Zoom. Use cases have grown rapidly as people integrated Zoom into their work, learning, and personal lives,” founder and CEO Eric Yuan said in a statement.

At the end of the first quarter, Zoom had approximately 265,400 customers with more than 10 employees, up 354% from the same quarter last fiscal year, and an “unprecedented” number of free participants.

That latter bit doesn’t carry an exact or even an estimated figure, but it’s obvious, it was the driving force behind Zoom’s booming business especially in the month of April. Zoom had a record April with 131 million downloads worldwide, according to data released by Sensor Tower. Zoom was the most downloaded “non-game” app in the world in April across both Android and iOS. Even more importantly, 18.2% of these downloads came from India, despite the Government’s red flag over its many privacy issues. The United States followed second accounting for 14.3% Zoom downloads during the same period.

Zoom’s ease of use and host of benefits have catapulted it to fame around the world, including India. But there’s no doubt that it’s also a privacy nightmare. Zoom is now working to fix this. Zoom’s 5.0 version that’s been available since May 30 and is mandatory to use the service, represents a huge update for the platform from a privacy and security point of view. One of the big changes that Zoom 5.0 brings along is enhanced encryption. Previously, Zoom relied on the AES-256 ECB encryption standard. With Zoom 5.0, it has made the switch to AES 256-bit GCM encryption which is theoretically more secure and private than the outgoing standard. Zoom is also mulling to offer even more enhanced encryption to paying customers in the days to come.

Also Read EXCLUSIVE: We spoke to Zoom about its privacy issues and how it plans to convince the Govt of India that it’s safe

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