The Fool Talks Zoom

Among other IPOs.

Aaron Bush and Ron Gross say its one of the best S-1s they’ve ever read.

I agree.



I have been reading every thread on Zoom I could find here and on NPI board-- I still am having a hard time understanding what their ‘moat’ would be?

Is it that they can interact with Skype and other telepresence systems?

The CAP and moat have been laid out on many posts.

Here for example:…

Their S-1 is a good place to look.

So you either buy those arguments or not. I see them has having a very large CAP and their growth backs that up. But I’m not sure there’s an argument out there other than that what has already been said.


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NetApp is using them now…or at least some in the company are.
Palo Alto sales team has also used them.

Many IT vendors that partner closely with Microsoft or Cisco tend to feel some corporate pressure to use either Skype or Webex, so I find it interesting to see Zoom making inroads with IT vendors.

Like with Azure, Microsoft can bundle products, so it will not be easy for Zoom to displace entrenched Skype or Webex accounts…would be interesting to hear their mgmt’s take on what that competition looks like. Are they focused on SMB or Enterprise or Govt or Healthcare or all the above?


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It boils down to the largest enterprise competition Skype For Business and Webex.

Skype for business is being put to bed and Webex is stuck in the 2000’s.

None of the other options come anywhere close to Zoom. Zoom is light years better.

And it simply can’t be argued that they aren’t crushing everyone.



Thanks, Darth

This was, in fact, one of the threads I devoured earlier.

JohnGalt2020 came closest to directly addressing the Moat–He (or she?) posted that there is no moat

I dont know that I know enough yet to intelligently agree or disagree. I will have to find the S-1.

Right now, I still am leaning toward looking to them as a play to gain marketshare (a “moat defeater”, if you will) with what appears to be superior tech.

If I am misguided here, I would very much like to learn more.

I will have to find the S-1.…

There are so many wonderful nuggets in this filing but I will quote some that I found very interesting.

"We believe that our customers are delighted when they use our platform. Since our founding in 2011, our platform has been used to conduct tens of billions of meeting minutes. We believe that our success results from a culture that is focused on customer and employee happiness, a video-first cloud architecture, recognized market leadership, viral demand, an efficient go-to-market strategy and robust customer support.

The happiness we bring is recognized by customers and industry analysts alike. In 2018, our average customer Net Promoter Score (NPS) was over 70. Gartner has named Zoom a Leader in its Magic Quadrant for Meeting Solutions based on our “ability to execute” and “completeness of vision.” Zoom also has consistently high scores across customer review sites, including Gartner Peer Insights, TrustRadius and G2 Crowd. We have been recognized as a 2018 Gartner Peer Insights Customers’ Choice for Meeting Solutions (Web Conferencing). G2 Crowd recognized Zoom as the leading pacesetter in the industry in its 2018 Momentum Grid of Video Conferencing.

We are experiencing rapid revenue growth and are generating positive cash flow from operations. Much of the primary capital that we have raised in recent years remains on our balance sheet, demonstrating the cash flow efficiency of our business. Our revenue was $60.8 million, $151.5 million and $330.5 million for the fiscal years ended January 31, 2017, 2018 and 2019, respectively, representing annual revenue growth of 149% and 118% in fiscal 2018 and fiscal 2019, respectively. We had a net loss of $0.0 million and $3.8 million for the fiscal years ended January 31, 2017 and 2018, respectively, and net income of $7.6 million for the fiscal year ended January 31, 2019. Cash provided by operations was $9.4 million, $19.4 million and $51.3 million for the fiscal years ended January 31, 2017, 2018 and 2019, respectively."

Just read those numbers again. Also Bert did a post last week for Ticker Target members that was quite interesting.



Microsoft is not giving up on Skype for the corporate world. If you have links, let me know.
Pretty sure it is probably a misunderstood sunset of certain versions or features.

As far as Webex…they have been around for a while, but they also have Cisco Spark Board and other new UC tools they continue to update and roll out.

Zoom is not “crushing” either.
This is akin to the laughable comments made in 2017/2018 regarding Arista “crushing” Cisco. Arista has/had a niche with cloud titans…much like Juniper used to with ISPs. Note that I would not ever be interested in Cisco stock.

I like what I have heard about Zoom IPO, and am interested. They can do well without crushing either, as they are coming from a fairly low revenue base.



Since the original post in the thread darthtaco linked to was deleted, I am not sure what the author posted from the s1 as being a moat.

What I found from the s1 was that zoom built their system from the ground up to be video centric rather than con call software with video retrofitted. Also they built it from the ground up to be cloud based.

I still can’t get over the industry zoom is in. With what else is out there, such as big data and iot, not to mention ipos coming down the pike, I find it hard to get excited about videoconferencing software. I also find it hard to get excited about instant messaging software. So I will probably pass on slack too. I don’t get the opportunity.


Skype for Business is going buh bye. They are pushing customers into Teams. S4B will be around for a bit longer but it’s being phased out.…

Starting October 1, 2018, Skype for Business Online is no longer included in Office 365 for new customers with fewer than 500 seats…

There is a timeline you can look at too as it dies out.

And yes they are crushing them. That one’s easy.


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We believe that our customers are delighted when they use our platform

Seriously? The moat is “delight”? I am techie, and all of the above sounds like nothing but sales speak to me. Video-first cloud architecture? Viral demand? Efficient go-to-market strategy? These are all nice buzzwords, but they don’t actually explain anything to me. I am sure they have a cute product that works just fine, and it’s great that they’ve been able to sell it some clients, and as a small company that equals big percentage growth for them. That’s all fantastic, but it still doesn’t answer the question of “why should I believe that you will continue to be successful over the next 5-10 years and that Cisco and Microsoft won’t eat your lunch [once they actually perceive you as a threat]?”

There may be a perfectly good answer to that question, but I certainly have not heard it yet. “Customer delight” and “WebEx is stuck in the 2000’s” is not it.

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I just read this that Microsoft wants to push clients to Teams as an assault against Slack. They aren’t ceding the video space by any means. The “collaboration” space is growing and MSFT just wants to get their bigger piece of it.

My one concern on Zoom actually speaks to this: is is “just” video conferencing? Canit can be more general collaboration ala Slack:



Well I was hoping the Aaron bush and Ross transcript would have something of more substinance other than it’s a great s-1. Seriously, why is it great? There are 3 things I like about it. High Glassdoor ratings (which can be manipulated and seems to be more prevalent now), over 100% growth at $330 mil (that’s actually impressive growth even for $330 mil compared to what zs, ayx and the rest are doing), 80% gross margin, they are not taking bad deals to grow this quick!

I think everything has been said about this one unless someone could put a concrete, convincing explanation as to why this videoconference company is worth investing in.

Right now it excites me as much as a fast growing keyboard manufacturer.


Dreamer, it looks like zoom is creating a more conclusive collaboration suite.…

So they have phone and chat as well but still seem focused on video.

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Full disclosure of a trip within my head included below:

Knowing and observing what I have regarding this board and the market-moving impact it can have, I have refrained from posting much about Zoom so far and had considered making a concerted effort not to talk about it until after establishing a position, as it is an IPO that I am considerably interested in after having briefly seen the numbers and heard a few users pseudo gush about it. I had even almost sent Austin a message to share these thoughts that I have had.

Seeing the length of this thread and having heard the gushing by Aaron Bush and Ron Gross on Motley Fool Money, my “self-imposed quiet period” strategy/plan seems to be at the point of being worthless and ineffectual.

All that said, it is to-be-determined whether I will initiate a starter position or maybe a more-than-starter-sized position on Day 1 of this IPO or not. Perhaps I should put in a request with my broker for some shares to at least test out that process?

would likely buy some shares at the IPO list price right now if I had that ability


So Dreamer would you consider this “collaboration” space a growing or developing field? Being the simple person I am I only see it as chat boxes, phones and videoconferencing.

not an expert in this field by any means…but it is where a lot of hot companies play, like SMAR and TEAM and PLAN.

How do I share info/video/thoughts/audio/files/emails/ppts/pdfs in any manner, at any time, with anyone in my company or external contacts, as appropriate? Is the data shared able to be manipulated by those I share it with. Can we utilize augmented reality with it (what if we are overlaying a prototype shopping mall image over a vacant land our group is considering purchasing.

It feels like the security space…so many point solutions under the general umbrella of “security” but very few companies try or are able to successfully span many/most of the various segments within security. (Cisco and Palo and Fortinet all try)

And we have seen several threads touting that Enterprises will try out and/or use multiple solutions…this doesn’t have to be a winner-takes-all game, because it likely can’t be.

My thought it to worry less about where Zoom tech stands in comparison to others, but rather the industry it is in is hot and their numbers are good right now. A Saul approach is just to not sweat the tech and follow the numbers until the story changes.



Yup company is dominating right now and has been. That’s all that matters.

Company I just joined uses Zoom. Literally 5X or more better than Skype and Teams Video.

Not even close


The bear arguments here resemble early bear arguments for Facebook. No moat, competition, etc

The bull arguments resemble early bull arguments for Facebook. People love it. Look at the numbers.

Zoom is killing it. People love it. This is how products become industry standard. The market is not just enterprise, but also smb, non profit, healthcare, education…

I drive a Mazda. I need to buy Zoom because I love zoom zoom.


Literally 5X or more better than Skype and Teams Video.

Not even close

Austin, shhhhhhhhh