Zoom just started reporting this metric for both Enterprise and > 10 employees customers, as in the past it would provide only one value for its Net Dollar Expansion Rate. It includes any upsell or expansion from a customer. The TTM Net Dollar expansion Rate is a measure that shows how much more does a customer spends on the Zoom platform as compared to 12 months ago.
After the huge pull-forward following the pandemic, Zoom made clear that it will allocate most of its resources on the enterprise segment, which is expected to become an increasingly higher percentage of total revenue over time. This category grew modestly in the last quarters, coming in with only a 4% growth quarter over quarter. The company doesn’t disclose a churn rate, but instead it chose to focus on the Enterprise customers (customers that have been engaged by Zoom’s direct sales team). Customers growthĬustomers > 10 employees decreased for the first time at the end of 2021 compared to Q3 2021. We know that 67% of Zoom’s revenue comes from US at the end of 2021, so I’m trying to see if there are any signs that the US video-conferencing market might be exhausted. KPIsīesides the high NPS score (in September 2021 Zoom revealed a NPS score of 70+, which is great), good revenue visibility or high % of insider ownership (20%), I’m trying to focus on some operational KPIs that can paint a good picture for the company for both present and future growth prospects.
So, let’s see what makes investors (myself included) not buy the stock of this great performing company. The company grew its net margin from 4% to 36% and sits now on a pile of around $1.5 billion in free cash flow. However, the company’s execution has been diametrically opposed to its recent stock performance. It grew around 430% and then managed to lose it all. Zoom ( NASDAQ: ZM) was one of the best performing stocks during 2020.
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