Zoom‘s revenue forecast has almost doubled as consumers and business users alike continue to rely on the videoconference platform during coronavirus lockdowns. However, the share price actually dropped as there was some bad news in the mix…
Reuters reports:
Zoom Video Communications Inc nearly doubled its expectations for annual sales on Tuesday, driven by a surge in users as more people work from home and connect with friends online during coronavirus lockdowns […]
The company raised its full-year revenue forecast to a range of $1.78 billion to $1.80 billion from $905 million to $915 million. Analysts on average expected revenue of $935.2 million for the fiscal year ending January 2021.
But Zoom’s revenue forecast didn’t satisfy investors, who were expecting even higher numbers and were disappointed by some bad news.
Zoom’s costs also rose sharply, and executives said gross margins would likely remain below Zoom’s historical norms in the coming quarters, sending shares of the San Jose, California-based down 3.5% to $200.75 in after-market trading […]
There were also possible signs the Zoom boom may be slowing as economies reopen. Chief Financial Officer Kelly Steckelberg said the April peak usage of 300 million daily meeting participants declined slightly in May.
The videoconferencing company also gave an unconvincing explanation for its decision to limit end-to-end encryption to paying subscribers. Usage by free users will still be encrypted, but not end-to-end, meaning Zoom has the key and would be able to access meetings.
The Next Web reports that Zoom claims this is to prevent illegal use of the platform.
Zoom CEO Eric Yuan today said […] that the firm wants to keep this feature away from free users to work with law enforcement in case of the app’s misuse.
‘Free users, for sure, we don’t want to give that [end-to-end encryption]. Because we also want to work it together with FBI and local law enforcement, in case some people use Zoom for bad purpose.’
The statement is clearly nonsense since anyone wanting to use it for criminal purposes could get access to end-to-end encryption through a paid account.
The company has been gradually boosting its security features following earlier discoveries of vulnerabilities and false claims.
Update: Zoom has now sent us the following statement in which it claims that paid accounts mean it can identify account owners.
Zoom’s AES 256 GCM encryption is turned on for all Zoom users – free and paid. Zoom does not proactively monitor meeting content, and we do not share information with law enforcement except in circumstances like child sex abuse. We do not have backdoors where participants can enter meetings without being visible to others. None of this will change.
Zoom’s end-to-end encryption plan balances the privacy of its users with the safety of vulnerable groups, including children and potential victims of hate crimes. We plan to provide end-to-end encryption to users for whom we can verify identity, thereby limiting harm to these vulnerable groups. Free users sign up with an email address, which does not provide enough information to verify identity.
The current decision by Zoom’s management is to offer end-to-end encryption to business and enterprise tiers. We are determining the best path forward for providing end-to-end encryption to our Pro users.
Zoom has engaged with child safety advocates, civil liberties organizations, encryption experts, and law enforcement to incorporate their feedback into our plan. Finding the perfect balance is challenging. We always strive to do the right thing.
This claim still makes no sense, however, since the company would have no access to end-to-end encrypted content, so the position remains that anyone wanting to use the platform for criminal purposes would be free to do so.
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