Mekong, a very valid point. Perhaps they try to kill 2 birds with 1 stone - managing their “China” exposure (reputational issue) and managing their costs structure which definitely will surge due to many millions of free users. I guess we need to wait earnings report in order to see if our long thesis holds or bears were correct with all the arguments about not paying users (rising costs), no moat, security flaws, reputational “China” risks etc. Unless someone on this board can already infer rise in costs and revenues and relationship between both.
Another point - here in Europe there is a small buzz for Zoom competitor recently listed in Norway - Pepix. Some people I know who kind of missed buying ZM cheaper recently bought into Pepix. The stock was listed just few days ago. Current market cap is around USD 1b. They kind of focusing on security and market themselves as the provider used by US military and German Government.
Here are several links to basic information about the company and IPO
Company founded - 2011
Employees in 18 countries - 225
Partners in 75 countries - 300
Customers - 3600
Countries with users - 190
Net customer retention rate 113%
Here is company’s presentation https://mb.cision.com/Main/19292/3112135/1247834.pdf
Here is annual report https://mb.cision.com/Main/19292/3100865/1239250.pdf
They claim to have best in class Saas Metrics
ARR CAGR 2013A – 2019A 79%
customers per YE2019 3,400+
net revenue retention 2019A 99%
EBITDA margin 2019A 21%
gross–margin 2019A 95%
LTV:CAC ratio 2019A 5.8x
What I’m personally positively surprised is that their Gross Margin is 95% and EBITDA 21%. This perhaps confirms that this business in general is very profitable? This could rebuke one of the Zoom short arguments that ZM’s high GM is because of Chinese developers and it would go down with development being relocated to the West. If Pexip has developers only in Western countries and GM 95%, ZM should be able to maintain high GM with US/European developers.
Anyway, Pexip is probably worth deeper dive in my eyes.