Zoom Video Communications, Inc. (NASDAQ: ZM) Q1 2021 Earnings Conference Call Highlights Summary
CEO Eric Yuan
Let me share some metrics that illustrate the demand we experienced in this past quarter. Customers with more than 10 employees grew 354% year-over-year, as we deployed millions of licenses for new customers in the quarter. One new banking customer deployed approximately 175,000 new Zoom enterprise licenses in the quarter. Usage by customers in the Global 2000 grew over 200% sequentially. We peaked at over 300 million daily meeting participants, free and paid, joining Zoom meetings in April 2020, up from 10 million in December 2019. Currently, we continue to see elevated levels of participants even as governments around the world have begun to ease stay-in-place restrictions.
We had an approximately twentyfold increase in our metric of annualized meeting minutes run rate, which jumped from 100 billion at the end of January 2020 to over 2 trillion meeting minutes based on April 2020’s run rate. Scaling capacity to meet this incredible increase in traffic and use cases while providing uninterrupted, reliable and high-quality services to our customers have been a tremendous undertaking for our team. And we could not have done it without relying on our partners. When the pandemic crisis started, our own data centers could not scale fast enough to handle the unprecedented traffic. Fortunately, some of the top public cloud providers were there to help.
Immediately during the crisis, our long-time partner AWS and its CEO Andy Jassy enabled us to meet this rapidly increasing demand. As our demand increased and we had limited visibility into the growth, AWS was able to respond quickly by provisioning the majority of the new servers we needed, so sometimes adding several thousands a day for several days in a row.
In April, our customer Oracle also showed a great support to help us. Not only did Larry Ellison record a great video to encourage our team to do the right things for the world, but also offered Oracle cloud support. We also provisioned a number of servers in the Oracle cloud as the demand for Zoom continued to increase. We are so grateful for their partnership and their responsiveness to provide capacity during this time.
While the COVID-19 pandemic has expanded our market opportunities, it also brought us many challenges. Prior to the pandemic, Zoom was primarily built for and used by large enterprises and institutions. During the crisis, with good intentions, we opened our platform to unprecedented numbers of first-time users without fully considering the challenges it would bring to those who did not have full IT support, or established protocols for security and privacy like our enterprise customers. As a result, we have experienced negative price related to meeting disruption, security and privacy issues.
Since these issues emerged, we have transparently and quickly addressed specific security and privacy issues, including: enacted a 90 day plan initiative on security and privacy with a weekly webinar for customers to ask me anything, acquired Keybase team to add engineering expertise to build an end-to-end encrypted meeting mode, also released Zoom 5.0 cloud with new security features and enhancements to give customers unparalleled control over their meetings and data. The new release also includes support for AES 256-bit GCM encryption and ability to report platform misuse to Zoom’s Trust& Safety Team.
During this period of unprecedented usage growth and negative PR, as a CEO of Zoom, I was also facing tremendous pressure. And I reached out to the high-tech community and received great support from fellow CEOs, and many of them are my mentors. And I can’t thank them enough for their advice. I’m also deeply grateful to see the strong support from our valued enterprise customers, such as CEOs from Atlassian, Equinix, HubSpot, Okta, PagerDuty, Poly, SurveyMonkey and many others, both through public statements and video testimonials.
With that, our users trust us to deliver the best and most secure video-first communications platform. I believe our result will continue to make us a stronger company for our customers and in the global community.
Now let me discuss a few of our happy customers. We are thrilled to welcome Arm Technology to the Zoom family. Arm Technology is at the heart of a computing and data revolution that is transforming the way people live and businesses operate. In Q1, Arm chose to deploy approximately 8,000 Zoom Meeting licenses, 800 Zoom Rooms and 9,000 Zoom Phones to deliver a one-touch experience to their employees globally.
We are also happy to welcome Baker McKenzie. One of Baker McKenzie’s distinguished strengths is their use of cutting-edge technologies to help clients overcome the challenges of competing in today’s economic world. We feel privileged to be the video communications platform of choice for the number one law firm brand in the world. Thank you, Arm and Baker McKenzie.
On a final note, we welcomed Lieutenant General H.R. McMaster to serve as an independent director on Zoom’s Board of Directors, Velchamy Sankarlingam as President of Engineering and Product, and Damien Hooper-Campbell as Chief Diversity Officer. Bringing their expertise to Zoom will be instrumental as we navigate rapid growth, transformation and scale.