zoom enterprise customers surpass 200K in q1 2023

The video conferencing platform Zoom Video Communications reported today that it already serving more than 200,000 enterprise customers after experiencing a 9% year-on-year expansion in this relevant operating metric.

Enterprise customers accounted for 57% of Zoom’s total revenues during this quarter. Meanwhile, the California-based tech company also reported that the number of customers bringing in more than $100,000 in revenue during the past 12 months grew by 23% in the past year to 3,580. This group makes up for 29% of Zoom’s total revenues as of this quarter.

According to this quarterly report, despite the strong growth of the enterprise segment, Zoom managed to grow its revenues by just 3% after accounting for the impact of foreign exchange rates.

Growth in The Americas Saved the Day for Zoom This Quarter

The Chief Financial Officer of the company, Kelly Steckelberg, highlighted that the company’s latest reductions in its headcount may have temporarily distracted the sales team and that this may have had a mild impact on the firm’s financial performance during the period.

Back in February, Zoom departed 1,300 employees – around 15% of its global workforce – as the firm is right-sizing its organizational structure after going on a hiring spree during the pandemic.

Zoom managed to offset a 5% and 8% decline in the APAC and EMEA regions during this quarter by an 8% advance in its revenues in the Americas – the region that accounts for the majority of the firm’s top line.

Meanwhile, the firm managed to deliver positive bottom-line figures both on a GAAP and non-GAAP basis and reported free cash flow margins of 35.9%. Based on that reading alone and considering that revenue growth is relatively stalled while operating margins on a GAAP basis are a bit thin, Zoom can be considered a cash cow.

The price of Zoom stock jumped by 5% initially shortly after the release of this quarterly report. However, the excitement was a bit short-lived as shares ended just 1.2% higher at $72.25 apiece a few moments later.

Zoom Partners with Anthropic to Avoid Being Left Behind in the AI Race

zoom focuses on incorporating ai

Differentiating itself from its competitors at a point when many companies are turning to hybrid models or enforcing a full-blown “back to the office” movement, is the challenge that lies ahead for Zoom.

In this regard, Zoom’s Chief Executive Officer, Eric Yuan, highlighted the company’s initiatives to incorporate artificial intelligence into its platform, starting with the launch of Zoom IQ and its federated approach to the technology, which means that Zoom works with multiple models and providers to let customers pick the alternative they believe is best for them.

Zoom also recently inked a strategic partnership with Anthropic, the company behind Claude, a generative AI model that competes directly with OpenAI’s ChatGPT and that follows an approach called Constitutional AI to tackle and handle the ethical and moral riddles of the technology.

“We plan to begin by layering Claude into our Contact Center portfolio, which includes Zoom Contact Center, Zoom Virtual Agent, and now in-beta Zoom Workforce Engagement Management. With Claude guiding agents toward trustworthy resolutions and powering self-service for end-users, companies will be able to take customer relationships to the next level”, Yuan commented in the prepared remarks that accompanied the financial report.

Companies including Microsoft (MSFT) and Alphabet (GOOG) have been threatening to reduce Zoom’s dominance of the video conferencing market by introducing AI tools and other advanced features to their services.

In the case of Microsoft, which owns the popular solution called Teams, its ongoing partnership with OpenAI is giving the company an edge when it comes to the speed at which it can deploy enhancements to its product.

This may have prompted Zoom to take action rapidly to avoid being run over by the Redmond-based tech giant, which has a substantially ampler war chest to invest in fine-tuning its service.

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