Zoom Video Communications IPO: What You Need To Know

If you’re on the lookout for a new communications play, a rival to Skype and Alphabet Inc GOOGL GOOG's Google Meet zooms to the market Thursday.

The IPO

Zoom Video Communications, Inc. will issue nearly 20.87 million shares on the Nasdaq under ticker ZM, according to the firm’s S-1 filing. Priced between $33 and $35, the offering represents 84.5 percent of outstanding shares and is expected to bring in about $768 million. (Editor's note: Dow Jones reported Wednesday Zoom priced its IPO at $36 per share.)

The lead underwriters include Morgan Stanley, JPMorgan, Goldman Sachs and Credit Suisse.

The company qualifies as an emerging growth company under the U.S. JOBS Act, which exempts management from certain SEC disclosure requirements.

The Company

Founded in 2011, the video and audio platform facilitates webinars, conferencing, content sharing and chat for remote organizations. The product suite of Zoom Meetings, Zoom Rooms and Zoom Phone integrates with third-party applications and runs on a cloud platform through a proprietary multimedia router.

Zoom’s marketing strategy includes a direct sales force and strategic partners, but the company said it also relies on organic introductions to new clients through existing clients hosting meetings. Last year, 55 percent of the firm’s $100,000 clients began with free discovery.

Based on estimated demand for unified communications and collaboration, Zoom Video sees a market opportunity beyond $43.1 billion in 2022.

The Finances

In the fiscal year ending Jan. 31, 2019, Zoom recorded $330.52 million in revenue, resulting in net income of $7.58 million. That represents significant growth from the previous year’s revenue of $151.48 million and net loss of $3.82 million.

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