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The Numbers Behind Zoom's Remarkable Growth

By Brian Withers – Oct 10, 2021 at 10:19AM

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Each one as amazing as the next...

Zoom's (ZM -0.28%) growth over the past few years has been simply stunning. For example, its sales over a three-year span grew more than 10 times! 

In this Backstage Pass video, which aired Sept. 28, 2021, Motley Fool contributor Brian Withers breaks down some numbers.

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Brian Withers: The first thing Kelly Steckelberg did was talk about the future. She got Marc Andreessen quote here, who's been a long time in the tech industry as well as now runs a venture capital firm. He's recently quoted that "The best jobs really can be performed anywhere, and companies are physically divorcing physical location from economic opportunity gives us a real shot expanding the number of good jobs in the world for quality of life."

Pretty interesting.

There was a Zoom meeting over here, or there is a number of different press articles that have come out. Whether it could've been a Zoom meeting and companies rethinking travel to potentially people on the spectrum, Zoom is a better way for them to be part of meetings, which is an interesting article here. Then obviously, this working from home, giving employees greater independence. Zoom platform is focused on advancing the way we connect regardless of location.

One of the things [the] CFO talked about is Zoom isn't just a business tool.

You can see on the right-hand side whether it's calling grandma, visiting doctors, or being part of yoga, or teacher conference ... certainly you can be involved with Zoom for any different number of use cases as part of your day.

Here [are] some cool metrics over the last few years, you can see their estimate for this fiscal year is topping four billion in revenue, which is really just mind-blowing considering that four years ago, it was [laughs] 331 million. More than a tenfold increase in a three-year span is just absolutely amazing.

You can see this dollar-based net expansion rate and we talked at length. If you read the footnote here, this is net retention. You take your customers that were here a year ago, see how much they're spending now, whether there's still with you, whether they're spending more, whether they've left, and you count that ratio. Being, I think it's the 13th consecutive quarter at 130 percent just says that Zoom has a way to grow and we'll show you that in another slide.

Nice operating margins, nice free cash flow, 44.5 percent, that's just tremendous. Then they got a boatload of cash.

Brian Withers owns shares of Zoom Video Communications. The Motley Fool owns shares of and recommends Zoom Video Communications. The Motley Fool has a disclosure policy.

Stocks Mentioned

Zoom Video Communications Stock Quote
Zoom Video Communications
ZM
$72.16 (-0.28%) $0.20

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