The first notes as Zoom files become public with rapid growth and real profit


Today Zoom, a reputable videoconferencing company, has decided to become public. The San Jose firm had raised $ 145.5 million while it was private. She joins Lyft, Pinterest and many other highly regarded companies during her IPO this year.

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Over the past few quarters, Zoom has become known for its ubiquitous advertising in airports.

The growth of its turnover has been impressive in recent years, indicates its deposit, and unlike most companies that became public this year, Zoom has demonstrated its ability not to lose almost infinite capital. He even recorded a positive net profit.


The big numbers

Zoom's fiscal calendar ends on January 31 of each year. This is a common pattern among SaaS companies, offering sellers the opportunity to close their fourth quarter with greater strength than would be possible with the last month of the calendar year.

During its fiscal year ended January 31, 2017, Zoom achieved a turnover of $ 60.8 million, which resulted in exceptional results. The company grew more than 100% the following year, ending January 31, 2018, with revenues of $ 151.5 million and lower net losses of $ 3.8 million.

In its most recently completed fiscal year ended January 31, 2019, Zoom more than doubled to $ 330.5 million, generating net earnings of $ 7.6 million (before non-cash costs offset the positive result). at zero, but it's a nice).

So, Zoom is a growing business that loses very little money. In 2019, this makes it a true unicorn: something rare and precious. Eliminate stock-based compensation costs and the company looks even healthier.

In terms of margins, during its last financial year, Zoom achieved a gross margin of around 81.5%, a remarkable figure for a company that becomes public in Zoom format. In other words, revenues of more than $ 330 million this year generated a gross profit of nearly $ 270 million.

The company also generates cash. During its last fiscal year, operations generated more than $ 51 million for the company. Taking into account the $ 39.7 million spent on investing activities, Zoom still has positive free cash flow. Again, at its rate of growth, this is an impressive result.

It is unclear what Zoom will be worth in the IPO process; his $ 100 million stimulus figure on his S-1 is more than likely a thin space. But for its investors, the company arrives at the finish line in good health and at a time of strong growth.

Who owns what

The most recent series of the company was a $ 100 million D Series led by Sequoia Capital. Emergence Capital and Horizon Ventures are among other investors.1 Report which investors own what, according to S-1.

Sequoia Capital finished with 11.4% of the company, Emergence holds 12.5% ​​and Digital Mobile Ventures holds 9.8%.

Now let's move on to unique entities with some power. Eric S. Yuan, CEO and founder of Zoom, will own 22% of the company. Chinese billionaire Li Ka-shing has a declared stake of 6.1%, held through an affiliated fund called Bucantini Enterprises Limited. Current officers and directors own 36.7% of the company.

See our table below for visual breakdown.

A fun watch

During its last quarter, the three months ending January 31, 2019, Zoom achieved a business turnover of just under $ 106 million and a net profit of $ 5.7 million . It's the company's first quarter with over $ 100 million in sales, and it's the most profitable quarter in which the company has broken out.

This means that Zoom ends his life as a good private company. The question I can ask now is how investors will appreciate the company. And if all the companies that have lost money and worked well provide context, the pricing should be fun to watch.

More when Zoom gives up some initial indications regarding the price of the shares.


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