Here are incredible stats about Zoom following its blowout earnings report
Eric Yuan, founder and chief executive officer of Zoom Video Communications Inc., center, celebrates during the company’s initial public offering at the Nasdaq MarketSite in New York on April 18, 2019.
Victor J. Blue | Bloomberg | Getty Images
Zoom’s 569% stock price increase this year has lifted its market cap to $129 billion, meaning the nine-year-old company is worth more than IBM and twice as valuable as VMware.
In its earnings report on Monday, the video chat company said revenue in the quarter increased 355% from a year earlier, beating analysts’ estimates by 33%. The shares surged more than 38% on Tuesday after the report. Keybanc analysts called it “another historic quarter.”
Here are some of the details embedded in Zoom’s meteoric rise from niche video app at the time of its IPO 16 months ago to household name and tech heavyweight today.
Astounding revenue, profit and customer growth:
- Quarterly revenue of $663.5 million is up almost nine-fold from the same period two years ago.
- Net income in the period of $185.7 million is more than triple its earnings from the last six quarters combined.
- Free cash flow increased 22-fold in the quarter to $373.4 million
- Customers producing $100,000 or more in annual revenue more than doubled from a year earlier to 988.
Investors are paying up for growth:
- Zoom has a price-to-sales ratio of 72, the highest among tech companies valued at $100 billion or more, according to FactSet. Shopify is second at 63.
- Zoom trades for 892 times earnings, second only to Salesforce among the largest tech companies by that metric.
- Among the more than 50 companies in the Bessemer Cloud Index, Zoom has the highest multiple when it comes enterprise value to revenue and enterprise value to future revenue.
- CEO Eric Yuan told CNBC on the day of the company’s IPO in April 2019 that he was “very surprised” by the stock’s 72% jump in its debut. Since then, the stock has multiplied by more than seven-fold.
Mega wealth creation:
- Yuan’s stake in Zoom is now worth almost $20 billion, up from $3 billion after the IPO. That puts him in the category of Carl Icahn and just slightly behind SoftBank’s Masayoshi Son.
- Venture firm Emergence Capital’s stake is worth $5.4 billion, and that’s after selling 60% of its original holdings. The firm invested in Zoom out of a $250 million fund in 2015.
- Samuel Chen, a former board member and longtime telecom executive, controls a stake worth over $9 billion. According to Zoom’s prospectus, the shares are owned by Digital Mobile Venture.
- Li Ka-shing, the real estate and business tycoon from Hong Kong, owns a stake worth $6.5 billion.
Watch the rising costs:
- To keep up with demand, research and development costs almost tripled from a year earlier, and sales and marketing costs doubled.
- Costs associated with stock-based compensation also almost tripled to $56.9 million.
- The cost of revenue actually increased by a bigger multiple than revenue itself, pushing the company’s gross margin down 10 percentage points from a year earlier to 71%.
Zoom’s stock this year
CNBC
Analysts can’t keep up:
- Guggenheim raised its price target after the report to $450 from $250, citing the “strong beat and raise.”
- Stifel raised its target to $300 from $180, as the “extended ‘Stay at Home’ environment supports continued revenue growth.”
- BTIG previously didn’t have a target and had a hold rating. The firm upgraded its rating to buy and gave the stock a target of $500, after the company “reported another quarter from a different planet.”
- Piper Sandler lifted its target to $411 from $211, as “all metrics showed material upside against Street expectations.”
- DA Davidson referred to the report as “the ‘Godfather 2’ of software quarters,” and raised its target to $460 from $240.
WATCH: Zoom CFO on blowout earnings, the future of working from home and more