Zoom Gets Big Accounts, Fewer Consumers; Stock Down
Zoom exited Q3 with 512,100 customer accounts with 10-plus employees each, up 18% year over year, said Chief Financial Officer Kelly Steckelberg on an analysts’ call Monday. Customers with more than 10 employees generated 66% of Q3 revenue, up sequentially…
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from 64% and 62% in Q3 last year, she said. These trends suggest that customers with more than 10 employees are expanding their use of the platform, adding more products and seats, she said. The company’s “net dollar expansion rate” for customers with more than 10 employees exceeded 130% for the 14th straight quarter, as existing customers “increased their spend with Zoom,” she said. “For Q4, we expect this metric to be modestly below the 130% mark.” Zoom’s online churn in Q3 “performed better than our expectations coming in at the beginning of the quarter,” said the CFO. “We were happy to see that it was more seasonality aligned rather than true potential departures, as people were making other choices or going back to meeting in person.” Q3 revenue of $1.05 billion was up 35% year over year. Quarter-on-quarter revenue growth is expected to be flat in Q4. "Our online business will be a headwind in the coming quarters as smaller customers and consumers adapt to the evolving environment," said Steckelberg. The stock closed down 15% Tuesday at $206.64.