As far as I could see, there were only a few negatives in the quarter, gross margins (free users, increased public cloud usage). Customer growth dropped off in percentage terms, Sales and marketing expense increased significantly.
But these points are splitting hairs. It was another excellent quarter. As far as I could see, the only thing that is unclear is what TexasTitan pointed out. What happens Post-COVID?
You either believe:
- The world returns to pre-COVID, everyone back in the office, video conferencing drops, ZM churn rockets up.
- The world shifts to a ‘hybrid’ work-from-home model, where some people are in the office, others are working from home, cafes, etc.
If you believe 1, you should probably ditch ZM. If you believe 2… you should consider their other products, the ZM Phone, OnZoom, ZoomRooms, Chat etc. Will companies standardise on ZM as their communications platform?
TexasTitan was right IMO, there weren’t a lot of details on the call. The positives that stood out to me were:
- Lower than expected churn.
- Using Q2 churn forecast for Q3 (Q3 was lower than expected), for their Q4 guidance.
- Government was their strongest growth vertical.
I expect they’ll beat guidance in Q4 as well. But there wasn’t a lot in the results that suggested that ZM wasn’t doing really (really) well.
cheers
Greg