Zoom’s customers:
End Apr 2019: 58,500
End Jul 2019: 66,300
End Oct 2019: 74,100
End Jan 2020: 81,900
So…customers added each Q
Apr 2019: ?
Jul 2019: 7,800
Oct 2019: 7,800
Jan 2020: 7,800
Kinda weird. Also, how many do you think they’ll add this Q?
Bear
Kinda weird. Also, how many do you think they’ll add this Q?
Wow. That is kinda weird.
I think they’ll add 24,504 customers this quarter.
I took the “normal” number and multiplied by Pi.
Some might say I used “circular reasoning.”
A.J.
Really sorry for the above
Some might say I used “circular reasoning.”
Hahaha
Also, these are customers with more than 10 employees so to me that makes it even more weird they add exactly 7800 each quarter. Obviously I don’t think they are faking numbers or anything (they’d make it increasing, right?) but it is truly baffling how this could happen 3 quarters in a row. But I guess if it were just two quarters I wouldn’t think much of it, so maybe it’s not as weird as it seems.
Plus maybe the actual numbers were like 7764, 7799, and 7814. That seems a lot less strange (for some reason).
Either way, it’s nearly impossible to predict how many new customers (with at least 10 employees) they’ll have this quarter, in my opinion. Could be 50,000…maybe 100,000. Who knows?
It’s also impossible to tell how much of their revenue is driven by these customers. I’m sure it’s a lot, maybe 90%, and if so the ones they’ve added lately are worth around $20,000/year on average. So adding 50,000 would mean increasing their run rate by a billion dollars.
You could actually see revenue jump from $188m last quarter to over $400m this quarter. That would be a sight to behold.
But if these customers aren’t as lucrative it could be much, much less revenue. Their average customer produces just $9,000/year, so at that rate obviously they would “only” have more like $300m this quarter (which would still be incredible, but not as jaw-dropping).
But again, I have no idea if they’ll really add 50,000 (or more).
Bear
There is no doubt ZM have added a huge number of new customers (all sizes) but I really doubt many will be paying customers. I expect only a small increase in their revenue growth rate. Every conferencing vendor is helping customers during this terrible pandemic by offering their platforms for free, typically 90 days, why would a company pay for ZM’s conferencing soln.
ZM and every other conferencing vendors opportunity will be to maintain and convert these new customers to paying customers. This opportunity could be a while away.
There have been a lot of reports that Zoom users have grown 20x in March (200M DAU vs 10M in Dec.)
https://www.fool.com/investing/2020/04/02/zoom-daily-active-…
I doubt we are going to get a substantial lift in rev. because of this 20x rise in users. Zoom charges either $180/host/y or $240/host/y depending whether you have a Pro or Business/Enterprise plan. Let us just go with $220/host/y. They made $623M/y. This equates to 2.8 M hosts who are distributed over 81,900 customers. 2.8 M hosts but only 10M DAU till December last year. This makes sense because ZM like most video conferencing is not so used on a daily basis. In our small company we have always paid for 5 go to meeting accounts (1/department). But they were not used daily till the end of last year. But now there is more usage even though we are not paying a dime more! My sense is this explains one portion of the increase in user growth. Another portion of user traffic is due to those who use Zoom to meet family and friends. This set of users will never pay. 40 min free account is quite adequate for them. The last set is your yoga, dance, religious groups, schools etc. These will pay. But they are not going to be your $9000/y customer. Based on the earlier calculation, till Dec last year we were averaging 4 users/host (10/2.8). This new set of customers will be going at 40 users/host. So, in March if we had 190M more users and only a third of them were due to this paying group that is about 63M users which equates to 1.6M new hosts (at 40 users/host). That equates to $350M for 2020. Before Covid-19 we were expecting about 1.05B for 2020. So, now have 1.4B which is about 125% growth. But once this passes about half of these accounts are likely to close so there will be headwinds for 2021.
Thanks Bear, eagle eyes. what’s the source of that customer data?
might it be from projections that were never corrected for actuals?