This means 6.250 users of 2.000.000 downloads become paying customers, which is about 0.3%, or 3 in 1.000
Fantastic stuff, Mooo, thank you! So let’s say they convert somewhere between 0.1% and 1% of downloads to paying subscribers.
If 1% (more than 3x Mooo’s estimate) convert, that’s 20,000 * 15 or $300,000 in monthly revenue, or $3.6 million annually. That’s a good day! But how many days would they need to keep it up to really move the needle? In just March alone would have added over $100 million of annual revenue but remember that’s only $25m for the quarter). I don’t this is likely, but I’m trying to set a total upper bound of how good this could be for them.
If it’s only 0.1%, that’s only $360,000 annually, so even if they do it for 365 days in a row, 730 million downloads, it’s $131 million annually (vs $623 million of revenue in 2019), so not really a needle mover.
When Saul says:
3. They had $188 million revenue in their December quarter.
4. I’m not estimating that having eleven times as many customers will give them eleven times as much revenue although logically I could hope for six or eight times, but let’s say they just have three times as much revenue as in December.
5. Am I being too conservative? I’m trying to be
6. Three times $188 million is $564 million. That’s a run rate of two and a quarter billion dollars of revenue, and with continued growth during the year, and based on the assumption we were using, their yearly revenue would probably be over $3 billion.
…I think the exuberance is really getting out of control. So I’m just trying to stay grounded in regard to what we can possibly expect. Obviously this is great for Zoom, and they’ll benefit from the exposure in a big way. It’s just that when it comes to actual revenue in the short term, I don’t think they are going to suddenly have 3x or 5x or 10x as much revenue in the coming quarter as they had last quarter.
And just like these iPhone users, I also don’t think large corporate accounts will suddenly triple or better. Thousands (even tens of thousands) will sign up, but only a small percentage of them will ramp into $100,000+ per year accounts, and they will do so over time (maybe after a discount or free trial period for a couple months or quarters).
The last 4 quarters revenue has been:
I think they see a huge bump to maybe something around $300 million in the next Q (or more likely the Q after it), but not anything close to $564 million. That’s me making a prediction, but only time will tell.