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Zoom Video Communications (NASDAQ: ZM) reported fiscal first-quarter 2020 results last Thursday that thrilled the market, which sent shares soaring more than 28% in the two-day period following the release. While shares pulled back 7% on Tuesday, they're still up 19.4% since earnings were announced and up a whopping 164% from their April initial public offering price of $36.
In the Silicon Valley-based video conferencing specialist's first earnings report as a public company, revenue rocketed 103% year over year to $122 million. GAAP earnings per share came in at breakeven, compared with a loss of $0.02 per share in the year-ago period, and adjusted EPS was $0.03, up from $0.00.
Below are four key things from Zoom Video's Q1 earnings call that investors should know. (My first call article covered what CEO Eric Yuan said about the company's total addressable market (TAM), its sales strategy for the new Zoom Phone, and company culture.)
Image source: Zoom Video Communications.
1. International expansion is a growth driver
From CFO Kelly Steckelberg's remarks:
Geographic expansion is another driver of our strong revenue growth as we continue to enjoy high demand and growth globally. Revenue in Q1 from the Americas was up 98% year over year and was approximately 80% of revenue. Our APAC [Asia Pacific] and EMEA [Europe, the Middle East, and Africa] revenue combined grew 127% year over year.
It's a big world -- and with the Americas region accounting for 80% of Zoom's total revenue in the first quarter, it's apparent that the international growth potential is particularly massive. The company is making significant investments to expand its global footprint.
2. Winning larger customers is a growth driver
Due to its focus on enterprise (larger) customers, Zoom grew its customer count in this category faster than its overall customer base in the first quarter. From Steckelberg's remarks:
We had over 58,500 customers with more than 10 employees, up nearly 86% year over year. ... The combination of our land and expand strategy, along with our growing enterprise focus resulted in 405 customers with more than $100,000 in revenue over the last 12 months, up 120% year over year.
In the quarter, Zoom's new enterprise customers included electronic-signature pioneer DocuSign and Fair Isaac Corporation (FICO), a predictive analytics company best known for its credit scores, while enterprise customers that expanded their relationships with Zoom included networking systems and software provider Ciena and video game maker Take-Two Interactive.