Zoom Video Communications

Zoom Video Communications offers cloud-based video conferencing solutions. The company's software, in addition to video conferencing, includes online chat, collaboration tools and tools for organizing online meetings. The service earns on paid packages, it also has a free basic version. Zoom solutions are sold in Russia through partners. Among them - "SysSoft" (as of April 2019).

Performance indicators

2023

2022: Zoom's full-year revenue up 55%

Zoom Video Communications ended fiscal 2021 with 55 percent revenue growth of $4.1 billion. Net profit almost doubled to $490.6 million.

Zoom's revenue growth rate has decreased several times, and this is due to the fact that more and more of the world's population is being vaccinated against the coronavirus COVID-19. This allows employees to return to offices, and students and students to resume full-time education in schools and universities.

Also, as SiliconANGLE writes, Zoom's position weakens competition from platforms such as Cisco Webex and Microsoft Teams. In this regard, there is a decrease in revenue from enterprises with 10 employees or less. This category includes mainly representatives of small and medium-sized businesses. By the end of January 2022, Zoom had 509,800 customers among companies employing more than 10 people, up 9% from a year earlier. The number of customers who spend more than $100,000 on Zoom services over the year increased by 66% and reached 2,725 by the end of fiscal 2022.

About 66.9% of Zoom's revenue comes from countries and Northern. South America The shares EMEA (,,) and Europe Middle East Africa Asia-Pacific were 18.6% and 14.4%, respectively.

On the day of the financial statements, Zoom shares fell in price by 1% despite the fact that the company's results were above market expectations. Since the beginning of 2022, the rate of quotations of the developer of the video conferencing service has fallen by 33% and decreased by almost 80% from the peak values ​ ​ registered in October 2020.

Zoom CEO Eric Yuan said the company sees new opportunities for business development and is going to increase investment.^[1]

History

2024: Dismissal of 2% of employees

On February 1, 2024, the American company Zoom Video Communications, which provides conference services using cloud computing, announced its intention to reorganize. During this process, approximately 150 employees will be laid off, which is less than 2% of the total headcount as of this date.

Zoom's popularity has grown sharply amid the COVID-19 pandemic, when users around the world needed funds to organize effective interaction in the context of distance learning and remote work. However, after the lifting of severe restrictions, company employees began to return to offices, and the demand for Zoom began to decline. The emerging macroeconomic environment also had a negative impact on business.

Zoom announced its intention to reorganize

Zoom tried to strengthen its market position by moving beyond its video conferencing service. The company focused on developing a suite of business applications, such as contact center software and corporate messenger. At the same time, the audience of the Zoom Phone service (a fully functional cloud telephony system for organizations of all sizes) reached 7 million users. However, these projects did not significantly accelerate growth, and Zoom decided to make organizational changes.

We regularly evaluate our teams to ensure compliance with the strategy being implemented. As part of these efforts, we are reviewing headcount, which will preserve the ability to hire employees in critical areas in the future, Zoom said.

Throughout 2024, Zoom will continue to increase the number of specialists in areas such as artificial intelligence, sales and engineering.^[2]

2023

Fine of 110 million rubles for the absence of a branch in Russia

On October 17, 2023, Zoom Video Communications was first issued a revolving fine for refusing to work in Russia without opening a branch. The World Court of the Tagansky District of Moscow found the company guilty under Part 2 of Art. 13.49 of the Administrative Code of the Russian Federation (failure to fulfill the obligations provided for by the legislation on the activities of foreign persons in the information and telecommunication network "Internet" on the territory of the Russian Federation) and fined it 115 million rubles, which corresponds to 10% of the platform's revenue on the Russian market for 2022.

The protocol on Zoom was drawn up under an article that assumes responsibility for the work of foreign companies in Russia without a form for feedback on its website, without registering a personal account on the website Roskomnadzor and without a branch or Russian legal entity. For companies, the punishment provides for a fine of 1/15 to 1/10 of annual revenue.

According to TASS, citing court documents, the protocol against Zoom was drawn up in Roskomnadzor on September 23, 2023. The reason is that Zoom Video Communications Inc is located in the United States, but operates in Russia. At the same time, the company did not open a branch or representative office in Russian territory. Thus, she violated the law "On the activities of foreign persons on the territory of the Russian Federation."

By October 2023, the Russian Federation has a law obliging foreign Internet companies with a daily audience of more than 500,000 users to open their authorized representative offices in Russia, create an electronic feedback form with Russian users, create a personal account on the Roskomnadzor website and install a recommended attendance counter on their information resources. According to the case file, from February 1, 2021 to August 2023, more than 400 thousand users in Russia use Zoom per day, this structure receives money from Russian individuals and organizations.^[3]

A fine of 15 million rubles for refusing to localize the data of Russians

On October 12, 2023, the World Court of the Tagansky District of Moscow fined Zoom 15 million rubles for the fact that the video conferencing service refused to localize the data of Russian users in the Russian Federation. found guilty under Part 9 of Art. 13.11 of the Administrative Code of the Russian Federation (repeated failure by the operator to store personal data in databases on the territory of the Russian Federation). The maximum fine for legal entities under this article is 18 million rubles. Zoom representatives and defenders did not appear in court, Interfax notes.

The Law "On Personal Data" obliges Russian and foreign companies to store personal information of Russians only on the territory of the Russian Federation. Zoom Video Communications is an American company.

On October 17, 2023, a magistrate will consider the protocol against Zoom for violating the "landing" law. It obliges foreign IT companies with an audience of more than 500 thousand people a day to open representative offices in Russia, register a personal account on the site Roskomnadzor and post an electronic feedback form. The penalty for refusal is from 1/15 to 1/10 of the company's revenue, but not less than 6 million rubles.

The fact that Zoom in Russia faces a negotiable fine for non-compliance with the landing law attracted the attention of the Russian public and forced to talk about this platform for video conferencing personally, since during the pandemic this service has become quite noticeable for many residents of the country, - said Artem Kiryanov, Deputy Chairman of the State Duma Committee on Economic Policy.

At the same time, he stressed that if Zoom wants to remain in the Russian economic space, it needs to comply with the country's legislation.

It must be understood that today Zoom can be replaced by a huge number of Russian applications that provide video conferencing capabilities and provide the appropriate level of encryption and confidentiality, "said Artem Kiryanov.[4]

Reduction of 15% of the state

On February 7, 2023, Zoom announced a reorganization, during which the number of employees on the company's staff will be reduced by 15%. This decision, as noted, is dictated by the uncertainties of the global economy.

The changes in the company's structure were announced by Eric S. Yuan, CEO and founder of Zoom Video Communications. According to him, during the COVID-19 pandemic, the company actively hired employees to meet the rapidly growing demand for remote communications. Within two years (as of the end of 2022), Zoom's staff increased approximately threefold. However, in this situation, as noted, the company is forced to revise the organizational structure.

We worked tirelessly and made Zoom better for users. But we also made mistakes. As CEO and founder of Zoom, I am responsible for these flaws. We made a difficult but necessary decision to reduce our team by 15% and say goodbye to about 1,300 hardworking and talented colleagues, Yuan said.

The layoffs will affect various Zoom divisions. Reduced employees will receive wages and health insurance payments for 16 weeks, as well as relying bonuses. In addition, support will be provided for employment in a new place: it includes individual training, seminars, etc. Eric S. Yuan will cut his salary by 98% and waive his annual bonus. Zoom executive team members will cut base salaries by 20% and lose corporate bonuses for fiscal year 2023. The reorganization is expected to help Zoom strengthen its business in the long term. Despite the reduction in headcount, the company will continue to invest in key strategic areas.^[5]

2022

Decision of Roskomnadzor on the application of coercion measures

Roskomnadzor On August 19, 2022 Telegram , he announced his decision to apply coercion measures against TikTok Pte. Telegram Messenger Ltd., , Inc., Zoom Video Communications, Inc.,. and Discord, Inc, Pinterest Inc. in the form of informing search engines Internet users about the violation by companies of the requirements of Russian the law. More. here

Execution of the law on "landing" in Russia

Roskomnadzor announced a change in the status of compliance by foreign IT companies with the requirements of Russian legislation. This became known on February 22, 2022.

Foreign companies Meta Platforms, Inc. and Zoom Video Communications, Inc. have begun to fulfill the requirements established by Federal Law No. 236-FZ. Read more here.

2021

Purchase of Liminal Virtual Event Software Developer

On December 27, 2021, Zoom announced the purchase of software developer for virtual events Liminal. This company creates special tools for the Zoom platform. Read more here.

Payment to users of $85 million due to data exchange with Facebook and hacker attacks

At the end of July 2021, Zoom promised to pay $85 million and improve security practices to resolve a lawsuit over violations of users' privacy rights.

Back in March 2020, users who signed up for a paid subscription filed a lawsuit against the company. They said Zoom passed their personal data to Facebook, Google and LinkedIn, which violated their right to privacy. The lawsuit also alleged that the company allowed hackers to disrupt Zoom meetings as part of a practice called "buzzing." This is the name of cases when outsiders seize control of Zoom meetings and demonstrate pornography, use racist language or publish other disturbing content.

Zoom agreed to adopt new security measures, including alerting users that meeting organizers or other attendees are using third-party apps during meetings. In addition, the company pledged to conduct special training for employees on privacy and data processing.

Persons who file a class action will be entitled to a refund of 15% of the cost of a paid Zoom subscription or to receive $15-25. In general, Zoom received about $1.3 million in profit for paid customer subscriptions. The plaintiffs are asking to recover $85 million in compensation from the company and more than $21 million in legal fees. Zoom's offer of compensation must still be approved by the court, which will be held in October.

While the company has agreed to pay compensation, it denies breaking the law. In a statement, a Zoom spokesperson noted:

The privacy and security of our users are the top priorities for Zoom, and we take the trust in us seriously.[6]

Purchase of a cloud platform developer for call centers for $14.7 billion

In July 2021, Zoom Video Communications announced the purchase of Five9 for $14.7 billion, which significantly exceeds the market capitalization of the cloud service provider at the end of exchange trading preceding the announcement of the sale of the company ($11.9 billion). The deal is scheduled to close in the first half of 2022. Read more here.

Purchase of the developer of the speech translation system in real time Kites

At the end of June 2021, it became known that the Zoom video conferencing platform acquired a German company called Kites (short for Karlsruhe Information Technology Solutions), which develops software for translation and transcription of speech in real time. Read more here.

Zoom backed down and allowed the Russian authorities and state-owned companies to use his connection. But under the new rules

The American video conferencing service Zoom, which at the end of March 2021 banned the Russian public sector from using its services, changed its decision. As it became known to CNews, domestic authorities and state-owned companies will still be able to use it, but on certain conditions^[7].

Companies and public sector structures will be able to use Zoom, but for this they will have to buy accounts in this service directly, without the need to contact distributors in Russia. A Zoom spokesman told CNews that the service "still strives to serve customers in the Russian market and in the countries of the Commonwealth of Independent States (CIS) "" We are in the process of developing our approach in the region, and in the meantime new and existing customers in both the public and private sectors can submit a request to acquire Zoom accounts (accounts) directly through our website, "he added.

According to CNews, before the introduction of these changes, Russian legal entities had to purchase licenses through Zoom partners in Russia or their resellers. The purchase of licenses through the service website was available only for individuals.

Ban on sales to state institutions and state-owned companies in Russia and the CIS

The American company Zoom Video Communications sent a letter to its Russian partners in April 2021, in which it warned of the withdrawal from March 31, 2021 of authorization to sell its video conferencing service to organizations with state participation in Russia, CNews reports .

Authorized Zoom partners for the sale of licenses are RightConf (WrightConf), Rokada (Rokada LLC), as well as the international corporation Unify Square.

As you know, the free version of the service is designed for private users and small enterprises. This version allows you to conduct an unlimited number of one-on-one conferences, as for group conferences, their duration is limited to 40 minutes.

In the paid version of Zoom Pro, there is no limit on the duration of the video conference, and up to 100 participants can also be connected. Along with the license, access to 1 GB of cloud storage for MP4 video recording is provided.

Public authorities rarely acquired a license to use Zoom. But organizations with state participation use the service much more often. In particular, the license was bought by Sheremetyevo Airport, Gazprom and VTB structures, cultural institutions, as well as higher educational institutions.

Additional placement of shares for $2 billion

In January 2021, Zoom Video Communications held a secondary stock offering, as a result of which the company managed to raise $2 billion instead of the expected $1.75 billion. The developer of video conferencing services will receive a little less than the indicated amount, since it does not take into account deductions, commissions and various expenses.

As part of the additional issue, 5.8 million shares were sold at a price of $340 apiece, which is 4.7% less than the exchange closing quotation rate the day before the transaction. J.P. Morgan acted as the sole bookrunner of the proposal. The bank was granted a 30-day option to purchase additional securities in the amount of 735,294 pieces.

According to The Wall Street Journal, citing Zoom CFO Kelly Steckelberg, the company intends to use the funds raised to expand sales and marketing, as well as to build data centers. Zoom previously announced intentions to strengthen research and development in Singapore and India.

Steckelberg did not rule out spending part of the investment on the purchase of companies. Zoom intends to disclose more detailed data on financial plans in the reporting, the publication of which is scheduled for March 1, 2021.

MarketWatch notes that investors' high interest in Zoom shares is largely due to the COVID-19 coronavirus pandemic, which has led to an explosive demand for tools for remote communication, work and study. It is these services that Zoom offers.

For 12 months, by the beginning of 2021, Zoom shares gave birth by about 380%. By January 20, the company's market capitalization is $114.6 billion, according to data from the Nasdaq exchange. Bloomberg notes that Zoom shares have become a barometer of the pandemic economy: they rise in price when countries impose restrictions due to COVID-19, and become cheaper on vaccine news.^[8]

2020

Revenue growth by 326%, to $2.65 billion

According to the results of work in 2020, Zoom Video Communications earned $2.65 billion in revenue, which is 326% more than in 2019. Net profit during this time rose from $21.7 million to $671.5 million.

The financial rise of the company was facilitated by the COVID-19 coronavirus pandemic, in which there was a surge in demand for video conferencing services.

Although the pandemic has created difficult business conditions, it has made Zoom "one of the most popular apps of the year," CEO Eric Yuan said at a conference on the publication of financial statements.

By the end of 2020, the number of organizations and companies registered on the Zoom platform with a staff of 10 people increased by 470% and exceeded 467.1 thousand. During the 12-month reporting period, 1,644 customers brought income to the company of more than $100 thousand, which is 156% more than a year earlier. Over the past three months of the year, the number of such customers has grown by 355, which is a record for Zoom.

Companies with a staff of 10 or more accounted for 63% of Zoom's revenue, and smaller customers - 37%, respectively. The number of users of the cloud telephone service Zoom Phone in 2020 increased by 269% and reached 10,700. Among them are 18 client companies that use the platform in the work of more than 10 thousand of their employees.

As of December 31, 2020, Zoom has accumulated about $4.24 billion in cash and cash equivalents. Free cash flow for the year increased from $113.8 million to $1.39 billion.

On the day of the publication of the financial results of 2020, Zoom shares rose by almost 10% by the close of the exchange, and in electronic trading their rate soared by another 8%. As a result, the company's market capitalization amounted to about $120 billion.^[9]

In the top 50 largest Internet sites in the world

Accusation of cheating users and poor protection of their data

The US Federal Trade Commission (FTC) has accused Zoom of deceiving users and poorly protecting their data. This became known on November 9, 2020.

The FTC requires Zoom Video Communications to implement a different security system as part of the proposed settlement because the encryption of Zoom services did not ensure the required user privacy.

Users attacked the company when it turned out that its service does not provide encryption throughout the communication channel. The FTC said Monday that the company's "misleading" statements created a false sense of security among users.

According to the FTC, the company also tricked users who stored records of calls in the cloud, contrary to the promise to encrypt them immediately after the end of the session. The commission claims that some records were stored without encryption on Zoom servers for up to 60 days.

The FTC's claim indicated that Zoom misled users with its claim that it has provided "end-to-end 256-bit encryption" to protect communication since 2016. In reality, the FTC points out, Zoom had cryptographic keys that could allow it to access user sessions.

In the settlement reached, Zoom pledged to implement a comprehensive security system and prevent distortion of privacy and security information; other specific measures to protect the user base have also been spelled^[10], the^[11] FTC^[12].

Zoom has become more expensive than IBM

In early September 2020, Zoom's market capitalization turned out to be higher than IBM's - $129.1 billion against $109.9 billion, respectively. Shares in the developer of the video conferencing service soared after the release of financial results thanks to the fact that the company's revenues rose strongly and exceeded Wall Street expectations.

So, by the time the exchange closed on September 1, the Zoom quotation rate reached $457.69, an increase of 41% compared to the previous day. For comparison: at the time of the IPO, the value indicator was measured at $62.

According to Bloomberg, the company showed the second largest growth among participants in the Nasdaq index in the second quarter of 2020, second only to the biotech firm Moderna, which is developing a vaccine against coronavirus.

Interest in Zoom services is associated with the COVID-19 pandemic, in which many companies switched to remote work and the need arose to maintain communication between employees, while avoiding personal contacts. At the same time, the name of Zoom itself turned into a synonym for the word "video conferencing" - just as Google used to become a verb meaning "to search for something in a search engine."

According to The Wall Street Journal, the coronavirus outbreak almost overnight turned Zoom from a niche application for companies into a tool that many Americans began to use to stay in touch with colleagues, family and friends.

On September 1, 2020, the fortune of Zoom founder Eric Yuan increased by $6.6 billion (to $22 billion) in a few hours due to the rise in the company's quotes. Yuan's financial successes fell short of the records of Jeff Bezos and Elon Musk. The founder of Amazon increased his wealth by $13 billion in one day in July 2020, and the head of Tesla enriched by almost $8 billion in 24 hours in August.^[13]

Buying blockchain company Keybase

On May 7, 2020, Zoom Video Communications announced the acquisition of blockchain startup Keybase at a price that the companies did not disclose. Using the technologies of the purchased startup, Zoom plans to introduce end-to-end encryption of all meetings on paid accounts. Read more here.

Zoom transmits traffic to servers in China

In early May 2020, Zoom Video Communications founder and CEO Eric Yuan commented on information that his company deliberately redirects Zoom user traffic through servers in China so that Chinese authorities can intercept it.

According to Citizen Lab experts, the interpretation of the term "end-to-end encryption" used by Zoom developers differs from the generally accepted one. During a test communication between Canada and the United States, it turned out that the encryption keys used by the service are sent to servers in Beijing.

Like many multinational companies, Zoom operates and has employees in China. And like many multinational technology companies, our offices in China are run by subsidiaries of the parent company, which is located in the United States. Our engineers work in these subsidiaries. We don't hide it. On the contrary, we every now and then indicate this information in our official reports, which we send to government agencies. The way we operate in China is much like how other American companies operate here, "Yuan said in a post he posted on the Zoom blog.

Zoom uses 17 data centers located in different parts of the world, he said. One of them is in China. This data center is managed by a leading Australian company and, in addition, it is located in the geozone, Yuan continues. The design of the data center ensures that data on video conferencing of users who are outside of China remains outside of China. The company uses it primarily to satisfy Fortune 500 customers who operate or have customers in China and want to use the Zoom platform to connect with them, the head emphasized.

I have been an American citizen since July 2007. I've lived in America since 1997. Zoom is an American company founded and located in California, registered in Delaware and listing on the stock exchange. Nasdaq We have an international business: 21 offices are located around the world, including,, Great Britain, and Australia Japan France other countries. More than half of our employees are in the U.S., "he added.[14]

The head of the company Eric Yuan for the first time entered the ranking of billionaires Forbes

The founder and executive director of Zoom Video Communications Eric Yuan (Eric Yuan) in early April 2020 for the first time entered the ranking of billionaires of Forbes magazine. Read more here.

2019: Going public

On April 18, 2019, Zoom Video Communications became a public company, listing its shares on the Nasdaq exchange under the ticker symbol ZM. The manufacturer of VKS solutions set the IPO price at $36, although a few days earlier he spoke of a range of $33-35. During trading, the quotation rate reached $66, and by the time the exchange closed, it stopped at $62.

According to the results of the first exchange session for Zoom, the company's market capitalization amounted to $14.4 billion, while in January 2017 the software manufacturer was estimated at $1 billion. As a result, the cost of Zoom more than 49 times exceeded its annual revenue, and the ratio of capitalization to sales turned out to be the largest among American technology companies with a capitalization of $500 million, the MarketWatch edition notes with reference to analysts FactSet. Previously, the status of the most highly valued IT company in the United States was Zscaler, which cost 30 times more than annual revenue.

As part of the IPO, Zoom put up 20.9 million shares for sale. Underwriters have the option to further sell 3.1 million securities to cover overspending.

Zoom CEO Eric Yuan, in a conversation with Fortune, admitted that he has "no idea" why the company's shares rose 72% on the first day of their trading.^[15]

2017-2019

In fiscal 2019, Zoom's revenue amounted to $330.5 million, in 2018 - $151.5 million, in 2017 - $60.8 million. Thus, sales grew by more than 100% each year.

Notes