Zoom on Tuesday reported that revenue rose sharply as the video conferencing service became a popular way to work or socialize while being submerged due to the coronavirus pandemic.
Zoom said it made $ 27 million in revenue, jumping 169 percent to just over $ 328 million in the financial quarter ended April 30.
In the same quarter of the previous year, Zoom reported zero dollars per share in net income for shareholders.
"The COVID-19 crisis has driven higher demand for distributed, face-to-face interactions and collaboration using Zoom," said founder and CEO Eric Yuan in a release.
The quarter ended with Zoom having approximately 265,400 paying customers with at least 1
Zoom shares that ended the formal trading day somewhat returned the gain in the aftermarket, apparently due to concerns that popularity will diminish as restrictions in movement ease and people may return to see each other in person.
Zoom told analysts that roughly half of the growth in paid usage was month-to-month paid customers, and those types of subscribers are more likely to leave than those who commit to annual membership.
"It's a reminder that Zoom sees an unusual peak below what we hope will be a relatively short-lived event," independent technology analyst Rob Enderle said.
"When you don't have to socialize so aggressively anymore, many people will want to go back to meet in person."
It's too early to say whether monthly customers are leaving Zoom in places where pandemic shelter rules are eased because "even where people take the time to go back to work," according to CFO Kelly Steckelberg.
Revenue comes with Zoom under pressure to manage security and privacy when the platform faces scrutiny from rising usage.
It has taken the heat off of uninvited cyber guests who disrupt online meetings with a tactic called "zoom bombing."
Zoom was originally built for businesses with dedicated IT teams to handle security feature deployment, but first-time users flocked to the service to work or get away from home because of the pandemic.
"As CEO, I should have done a better job," Yuan said in a video interview with analysts.
"We should have e played the role of IT for first-time users. We learned a hard lesson; this was a mistake I made."
As a result, the company has poured resources on privacy and security.
Zoom is also working on encrypting video meetings in the end, saying that the feature is only made available to its business customers and not the free version of the service.
Zoom recently launched a philanthropic foundation with initial grants to the San Jose Digital Inclusions Fund, Destination Home, the CDC Foundation, the World Health Organization and the CDE Foundation.