What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-03-07 compared with 2021-03-18 · 86 added, 70 removed, 155 unchanged (50% of the section changed)

Our mission is to make video communications frictionless and secure.

We provide a video-first unified communications platform that delivers happiness and fundamentally changes how people interact.

We connect people through frictionless and secure video, phone, chat, and content sharing and enable face-to-face video experiences for thousands of people in a single meeting across disparate devices and locations.

Our cloud-native platform delivers reliable, high-quality video and voice that is easy to use, manage, and deploy;

Zoom enables users to connect to others, share ideas, make plans, and build toward a future limited only by their imagination.

Our frictionless communications platform started with video as its foundation, and we have set the standard for innovation ever since.

That is why Zoom is an intuitive, scalable, and secure choice for large enterprises, small businesses, and individuals alike.

We connect people through our core unified communications offering, which frictionlessly brings together video, phone, chat, and webinars, and enables meaningful experiences across disparate devices and locations.

Our Developer Platform enables customers, developers, and service providers to easily build apps and integrations on top of Zoom’s industry-leading video communications platform, with opportunities for global discovery and distribution.

Our virtual and hybrid event solutions allow users to seamlessly create and manage engaging events.

Our cloud-native platform delivers reliable, high-quality video and voice solutions that are easy to use, manage, and deploy;

provides an attractive return on investment;

is scalable and easily integrates with physical spaces and applications.

and is scalable and easily integrates with physical spaces and applications.

As businesses around the world navigate a period of significant work transformation, Zoom’s ability to enable meaningful connections whether teams are in the office, at home, on-the-go, or in other locations such as a retail or manufacturing setting, is a critical differentiator.

We believe that rich and reliable communications lead to interactions that build greater empathy and trust.

We strive to live up to the trust our customers place in us by delivering a communications solution that “just works.”

The cornerstone of our platform is Zoom Meetings, around which we provide a full suite of products and features designed to give users an easy, reliable, and innovative unified communications experience.

Users are comprised of both hosts who organize video meetings and the individual attendees who participate in those video meetings.

We strive to live up to the trust our customers place in us by delivering a communications solution that is secure, reliable, and “just works.”

A cornerstone of our platform is Zoom Meetings, around which we provide a full suite of products and features designed to give users an easy, reliable, and innovative unified communications experience.

Users comprise both hosts, who organize video meetings, and individual attendees, who participate in those video meetings.

In 2019, we launched Zoom Phone, a cloud-based PBX system, creating a unique unified communications platform.

Many customers also choose to implement Zoom Rooms, our software-based conference room system, which enables users to easily experience Zoom Meetings in their physical meeting spaces.

Our partner ecosystem, which includes App Marketplace and in-product apps, and developer platform help enterprises create elevated experiences with third-party applications to create customized workflows.

In February 2022, we announced Zoom Contact Center, an omnichannel contact center solution that is optimized for video and integrated right into the same Zoom experience.

The happiness we bring is recognized by customers.

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Industry analysts also recognize our market leadership:

Gartner has named Zoom a Leader in its Magic Quadrant for Meeting Solutions based on our “ability to execute” and “completeness of vision.” In 2020 we also became a Leader in the Gartner Magic Quadrant for UCaaS.

Frost & Sullivan recognized Zoom with its Global Connected Work Company of the Year award in 2020, as well as awards for Global Video Communications in The COVID-19 Crisis Enabling Technology Leadership, Asia-Pacific Cloud Video Collaboration Services Company of The Year, and Indian Cloud Video Enabling Technology Leadership.

Gartner has named Zoom a leader in its Magic Quadrant for Meeting Solutions for the sixth consecutive year, and a leader in the Magic Quadrant for UCaaS for a second year.

Frost & Sullivan recognized Zoom with its 2021 Global Webinars and Virtual Events Market Leadership Award.

In 2021, we were also recognized as a leader in IDC’s MarketScapes for UCaaS Service Providers (Small- and Medium-sized Businesses and Worldwide Enterprise) and for Worldwide Unified Communications and Collaboration, by Omdia Universe for Collaborative Meeting Services, and by Aragon Research Globes for Unified Communications and Collaboration and Video Conferencing.

We also received Aragon’s Innovation Award for Video Conferencing in both 2020 and 2021.

Zoom was also named to Fortune’s 2021 Future 50 list, which recognized innovative companies with high-growth potential who are creating meaningful value for their customers.

We have a unique model that combines viral enthusiasm for our platform with a multipronged go-to-market strategy for optimal efficiency.

Viral enthusiasm begins with our users as they experience our platform – it just works.

Viral enthusiasm begins with our users as they experience the simplicity and reliability of our platform – it “gets out of the way” so they can focus on what they need to get done together.

This enthusiasm continues as meeting participants become paid hosts and as businesses of all sizes become our customers.

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Our platform is designed to make it easy to host meetings.

By attracting free hosts to use our platform, we promote usage that allows hosts and their meeting attendees to experience the difference of Zoom.

By attracting free hosts to use our platform, we promote usage that allows hosts and their meeting attendees to experience the

Zoom difference.

We complement this lead-generation model with our multipronged go-to-market strategy that integrates the viral enthusiasm for our platform with optimal routes-to-market, including direct sales representatives, online channel, resellers, and strategic partners.

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• Expand within existing customers.

As organizations experience our video platform and become familiar with its benefits, more teams and departments within these organizations adopt Zoom.

As organizations experience our platform and become familiar with its benefits, more teams and departments within these organizations adopt Zoom.

Our platform may begin in a line of business and then organically expand across departments.

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• Innovate our platform continuously.

Our engineers aim to stay on the cutting edge of video communication and collaboration technologies.

We strive to deliver the best experience to our users by dedicating a portion of

engineering capacity to developing on-demand, customer-requested features that would be valuable across our customer base.

Our engineers aim to stay on the cutting edge of communication and collaboration technologies.

We strive to deliver the best experience to our users by dedicating a portion of engineering capacity to developing on-demand, customer-requested features that would be valuable across our customer base.

• Accelerate international expansion.

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We provide a unified communications platform that delivers happiness and fundamentally changes how people interact, connecting them through frictionless and secure video, phone, chat, and content sharing.

Our core products include Zoom Meetings, Zoom Phone, Zoom Chat, Zoom Rooms, Zoom Conference Room Connector, Zoom Video Webinars, Zoom Developer Platform, and Zoom App Marketplace.

Our core products include Zoom Meetings, Zoom Phone, Zoom Chat, Zoom Rooms, Zoom Hardware-as-a-Service, Zoom Conference Room Connector, Zoom Events, Zoom Webinar, Zoom Developer Platform, Zoom App Marketplace, and Zoom Contact Center.

Zoom Meetings

Zoom Meetings provide HD video, voice, chat, and content sharing across mobile devices, desktops, laptops, telephones, and conference room systems.

Our architecture can support up to one thousand video participants in a single meeting.

Our architecture can support up to 1,000 video participants in a single meeting.

Conversations can be one to one, one to many, or many to many.

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Our meetings are a flexible tool for on-the-go employees who rely on their mobile device or tablet throughout their business day.

An end-to-end encryption (“E2EE”) option is now available to free and paid Zoom customers globally who host meetings with up to 200 participants.

Zoom’s E2EE uses the same AES-256-GCM encryption that secures Zoom meetings by default, but with Zoom’s new E2EE, the meeting host generates encryption keys and uses public key cryptography to distribute these keys to the other meeting participants.

An end-to-end encryption (“E2EE”) option is available to free and paid Zoom customers globally who host meetings with up to 200 participants.

Zoom’s E2EE uses the same 256-bit AES GCM encryption that secures Zoom meetings by default, but with Zoom’s E2EE, the meeting host generates encryption keys and uses public key cryptography to distribute these keys to the other meeting participants.

Zoom Phone is an enterprise cloud phone system that provides powerful private branch exchange (“PBX”) features, such as secure call routing, call queuing, call detail reports, call recording, call quality monitoring, voicemail, switch to video, and much more.

Available stand alone, or as an optional add-on to Zoom Meetings, Zoom Phone is a core component of our modern video-first UCaaS strategy that enables customers to replace their existing PBX solution and consolidate all of their business communications and collaboration requirements onto Zoom.

Available stand-alone, or as an optional add-on to Zoom Meetings, Zoom Phone is a core component of our modern UCaaS strategy that enables customers to replace their existing PBX solution and consolidate all of their business communications and collaboration requirements onto Zoom.

Zoom Phone provides inbound and outbound calling via its support for native connectivity to the public switched telephone network (“PSTN”).

In the fiscal year ended January 31, 2021, Zoom Phone provided native PSTN connectivity in 44 countries and territories including Australia, Canada, Ireland, New Zealand, Puerto Rico, United Kingdom (“U.K.”), and the United States (“U.S.”).

Zoom Phone also supports Premise Peering and Cloud Peering, which provide enterprise customers with the flexibility of keeping their current PSTN service providers by redirecting existing third-party voice circuits to the Zoom Phone cloud.

In the fiscal year ended January 31, 2022, Zoom Phone provided native PSTN connectivity in more than 45 countries and territories.

Zoom Phone also supports Premise Peering and Cloud Peering, which provide customers with the flexibility to keep their current PSTN service providers by redirecting existing third-party voice circuits to the Zoom Phone cloud.

Hybrid connectivity is also supported, allowing customers to mix native Zoom Phone calling plans and third-party voice circuits.

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Zoom Chat, which is included in the Zoom client for meeting and phone customers, enables organizations and teams to communicate and collaborate in groups, channels, or 1-1s and to stay connected by instantly sharing messages, images, audio files, and other content across desktop, laptop, tablet, and mobile devices.

With Zoom Chat users can easily invite people outside a user’s organization to a chat conversation, and users can quickly switch from a chat to a phone call or video meeting

during a conversation.

With Zoom Chat, users can easily invite people outside their organization to a chat conversation, and users can quickly switch from a chat to a phone call or video meeting during a conversation.

Zoom Chat also features content storage for users who want discoverability and the ability to review their conversations or shared files.

There are dozens of Zoom Chat compatible applications available in the Zoom App Marketplace that provide notifications and improved workflow for other enterprise systems.

Zoom Rooms is our software-based conference room system that transforms every room–from executive offices, huddle rooms, training rooms, to broadcast studios–into a collaboration space that is easy to use, simple to deploy, and effortless to manage.

Zoom Rooms is our software-based conference room system that transforms every room – from executive offices, huddle rooms, training rooms, to broadcast studios – into a collaboration space that is easy to use, simple to deploy, and low-effort to manage.

Designed to increase workforce collaboration across in-room and virtual participants, Zoom Rooms bring one-click to join meetings, wireless multi-sharing, interactive whiteboarding, and intuitive room controls for a frictionless and secure Zoom Meeting experience.

Zoom Rooms can leverage purpose-built hardware, such as Zoom Rooms Appliances, for a turnkey deployment, or customize room builds with Zoom’s open hardware ecosystem and professional audio/visual equipment, enabling organizations to build video conference rooms for any use case.

Zoom Rooms can leverage purpose-built hardware, such as Zoom Rooms Appliances, for a turnkey deployment, or users can customize room builds with Zoom’s open hardware ecosystem and professional audio/visual equipment, enabling organizations to build video-enabled spaces for any use case.

Zoom Rooms Scheduling Display helps meet the needs of the agile office by delivering simple, on-the-fly room booking and room utilization management through a calendaring system.

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Included as part of Zoom Rooms, role-based admins can easily manage unlimited Digital Signage content and displays through the Zoom Admin Portal and remotely control the content displayed across screens for corporate communications, internal marketing, branding, and more.

Zoom for Home is a personal home office solution designed to help remote workers connect and be more productive.

The leading providers of Zoom for Home compatible devices include Amazon, DTEN, Facebook, Google, Neat, Poly, and others.

Zoom Hardware-as-a-Service

Our Zoom Hardware-as-a-Service offering allows customers to access the latest and greatest video communication technology from third party equipment providers.

Customers can deploy a world-class communications experience with a variety of subscription options for phone and meeting room hardware.

Customers can also scale video conference rooms and phones with hardware options and hardware refreshes at an affordable, fixed monthly price.

Zoom Conference Room Connector

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With the cost-savings, organizations can reinvest in video-enabling more rooms and continue to leverage their existing SIP/H.323 endpoints with a consistent, cloud-based experience across all their rooms.

Zoom Video Webinars

Zoom Video Webinars support interactive video presentations to large audiences from almost anywhere in the world and from many devices.

Zoom Events provides businesses with a virtual event management solution powered by the Zoom platform.

Zoom Events enables users to manage and host all types of internal and external virtual events, from small interactive sessions to multi-day and multi-track events like conferences or consumer events.

This includes the ability to create a “hub” where all of a business’ events can be listed with corresponding information about each experience.

It also enables event hosts to provide ticketing and registration for attendees, and the ability to track these activities.

OnZoom is a prosumer-focused virtual event platform and marketplace for Zoom users to create, host, and monetize online events.

OnZoom is an extension of Zoom’s unified communications platform with robust monetization (ticketing and fundraising) and simpler event management capabilities.

OnZoom is currently offered as a public beta for United States (“U.S.”) users to host and attend online events.

Zoom Webinars

Zoom Webinars support interactive video presentations to large audiences from almost anywhere in the world and from many devices.

Zoom Webinars scale up to 50,000 people, including up to 100 interactive video panelists.

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Zoom Developer Platform and Zoom App Marketplace

Zoom Developer Platform allows developers to integrate our video, phone, chat, and content sharing into other applications, as well as manage Zoom accounts from any system, with full access to their usage and network metrics data.

With our SDKs, APIs and webhooks, Zoom, third-party developers, and partners build applications that integrate our platform with other cloud services.

Our customers can also develop highly customizable private applications that integrate Zoom into their systems.

Our rich toolbox of extensible APIs, cross-platform SDKs, and MobileRTC powered an average of more than 1.6 billion API engagements per month for calendar year 2020.

Our App Marketplace brings together these integrations built by Zoom and third-party developers, making it easy for developers to publish their apps and for customers to enhance their Zoom experience with new functionalities.

We fully vet apps in our marketplace for security and user experience.

Zoom App Marketplace features apps and bots with services such as Salesforce, Microsoft Teams, and Google, as well as deep product integrations with Dropbox, Box, Atlassian, and Marketo.

OnZoom and Zoom Apps

We recently announced two additions to the Zoom platform:

OnZoom and Zoom Apps.

OnZoom is a new platform for Zoom users to create, host, and monetize online events.

OnZoom is an extension of Zoom’s unified communications platform with robust monetization (ticketing and fundraising) and simpler event management capabilities.

OnZoom is currently offered as a public beta for U.S.

users to host and attend online events.

Zoom Apps are a new app type coming soon to the Zoom App

These in-product integrations will be accessible directly from Zoom Meetings and the Zoom Desktop client and are designed to facilitate collaboration and engagement during meetings.

Zoom Hardware-as-a-Service

Our Zoom Hardware-as-a-Service offering allows customers to access the latest and greatest video communication technology.

Customers can deploy a world-class communications experience with a variety of subscription options for phone and meeting room hardware.

Zoom customers will be able to scale video conference rooms and phones with hardware options and hardware refreshes at an affordable, fixed monthly price.

The Zoom Developer Platform enables developers, platform integrators, service providers, and customers to easily build apps and integrations that use Zoom’s video-based communications solutions across video, phone, chat, or integrate Zoom’s core technology into their products and services, with opportunities for co-marketing, discovery and distribution.

Our developer platform also allows Zoom customers to administer their accounts including managing app requests and provisioning, as well as optimizing account usage with access to dashboards and comprehensive usage metrics.

With our SDKs, APIs, webhooks and extensive developer resources, Zoom, third-party developers, and partners build applications that integrate our platform with other globally in-demand applications, platforms, websites, and services.

Our customers also have access to tools and resources to develop private applications that integrate Zoom and Zoom technology into their workflows and systems.

Our App Marketplace brings together integrations built by Zoom and third-party developers, making it easy for developers to publish their apps and for customers to enhance their Zoom experience with new functionalities.

The App Marketplace features third-party integrations of Zoom into best of breed apps, Zoom Apps (third-party apps integrated into the Zoom experience) and SDK apps (apps built by ISV program partners using our Meeting SDK).

Key integrations include Google Workspace, Calendly, Slack, Microsoft Teams, Salesforce, Otter.ai, Hubspot, Asana, Kahoot!

Zoom Apps combine users' favorite apps with the power of video communications by allowing users to access them directly in Zoom Meetings.

Users can enrich their Zoom experience with a variety of apps that cover many use cases — including whiteboarding, project management, note-taking, gaming, and more.

Zoom Contact Center

In February 2022, we introduced Zoom Contact Center which combines contact center functionality with our Zoom unified communications solutions.

Zoom Contact Center is currently available in the U.S.

and Canada with additional international availability planned for later this year.

Our Technology and Infrastructure

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We have customers of all sizes, from individuals to global Fortune 50 organizations.

Our current customer base spans numerous industry categories, including education, entertainment/media, enterprise infrastructure, finance, government, health care, manufacturing, non-profit/not for profit and social impact, retail/consumer products, and software/internet.

Our current customer base spans numerous industry categories, including education, entertainment/media, enterprise infrastructure, finance, government, health

care, manufacturing, nonprofit/not for profit and social impact, retail/consumer products, and software/internet.

No individual customer represented more than 10% of our total revenue in the fiscal year ended January 31, 2022.

As of January 31, 2021, we had approximately 467,100 customers with more than 10 employees.

Our sales model combines our viral demand generation and our free Zoom Meeting plan with a sales approach optimized for the size of each customer opportunity.

Our direct sales force includes our field sales representatives as well as our inside sales team, and it is organized by customer employee count and vertical.

Our sales model combines our viral demand generation and our free Zoom Meetings plan with a sales approach optimized for the size of each customer opportunity.

Our direct sales force includes our field sales representatives as well as our inside sales team, and it is organized by customer employee count, region, and vertical.

Our channel team coordinates the activities of resellers and strategic partners to build a strong ecosystem that broadens our reach.

Our online channel supports high-volume, high-velocity, self-service sales.

Our marketing team’s primary objective is to create preference for our brand by leveraging our viral growth, enhancing brand perception, and engaging our users with virtual events, social media, and customer advisory councils.

We complement our viral growth with targeted online and out-of-home advertising.

We shifted our events strategy from in-person to online during the pandemic, including hosting Zoomtopia, our annual user conference, to over 150,000 unique virtual attendees.

We shifted our events strategy from in-person to online during the pandemic, including hosting Zoomtopia, our annual user conference, virtually to tens of thousands of attendees.

Research and Development

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The markets in which we operate are highly competitive.

We face competition from legacy web-based meeting services providers, including Cisco Webex and LogMeIn GoToMeeting, and bundled productivity solution providers with video functionality, including Google G Suite and Microsoft Teams, as well as UCaaS and legacy PBX providers, including 8x8.

Avaya, and RingCentral.

We face competition from legacy web-based meeting services providers, including Cisco Webex and GoTo, bundled productivity solution providers with video functionality, including Google Workspace and Microsoft Teams, and UCaaS and legacy PBX providers, including 8x8, Avaya, and RingCentral, as well as consumer-facing platforms that can support small- or medium-sized businesses, including Amazon, Apple, and Facebook.

Additionally, as we build out Zoom Contact Center, we may face additional competition, including from Five9, Inc., Genesys and NICE inContact.

We believe we compete favorably based on the following competitive factors:

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We take steps to ensure compliance with the terms of the licenses governing such licensed technology.

We believe our business is not materially dependent on any individual patent, trademark, copyright, trade secret, license, or other intellectual property right.

We believe our business is not materially dependent on any individual patent, trademark, copyright, trade secret, license, or

other intellectual property right.

For information on the risks associated with our intellectual property, see “Item 1A - Risk Factors.”

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Of these employees, 4,009 are in the United States and 2,778 are in our international locations.

None of our employees are represented by a labor union or covered by collective bargaining agreements, and we have not experienced any work stoppages.

None of our U.S.

employees are represented by a labor union.

Employees in one of our non-U.S.

subsidiaries have the benefit of a collective bargaining agreement and are represented by a workers’ council.

We have not experienced interruptions of operations or any work stoppages due to labor disagreements.

Our Culture of Happiness

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workforce (who and how we hire), workplace (how it feels to work at Zoom), marketplace (how we include our customers) and community (how we help to make the world more equitable).

In June, we hired our first Chief Diversity Officer, Damien Hooper-Campbell, to lead our DEI function globally.

We have taken steps to diversify our candidate outreach through engagements with AfroTech, Merritt College, AnitaB.org, and a five-year strategic partnership with Claflin University.

In our workplace, we launched our Zoom Talks initiative to create ongoing spaces for our employees to learn more about each other's unique backgrounds.

We also launched our inaugural Employee Resource Group (“ERG”) program with a focus on Black, Latinx, Women's, Veterans and LGBTQ+ communities.

In our workplace, our Zoom Talks initiative creates ongoing spaces for our employees to learn more about one another’s unique backgrounds.

We have a number of Employee Resource Groups (“ERGs”) with a focus on Black, Latinx, Women, Asian and Pacific Islander, Veteran, and LGBTQ+ communities.

Our ERGs offer our employees support and community building opportunities, and help to foster an inclusive environment and diverse workplace.

Our DEI Team continues to partner with teams leading our product design and marketing to invest in making our products even more inclusive and accessible to the diverse set of communities we serve.

Finally, in an effort to both further our education internally and provide others outside of Zoom with an opportunity to learn, we created the nine-part learning series, “Race in the Workplace”, in partnership with TIME and renowned expert, Dr.

Shaun Harper.

Compensation and Benefits

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We have also provided a work-from-home reimbursement policy to assist employees in that transition.

Our Facilities

Our corporate headquarters is located in San Jose, California, where we lease approximately 103,000 square feet of commercial space pursuant to operating leases that expire in the fiscal year ending January 31, 2030.

In addition, we maintain additional offices in the United States and internationally in Asia-Pacific (“APAC”) and Europe, Middle East, and Africa (“EMEA”).

We believe that our facilities are suitable to meet our current needs.

Over the past year, we conducted a comprehensive employee survey with regular follow-ups and engaged in peer research to make thoughtful decisions on how to move forward in an evolving world of work.

Two priorities were immediately clear:

keeping our employees safe and supporting them through a meaningful employee experience.

We believe that the future of work at Zoom will be based on enabling a flexible working environment for our employees.

We have created three "workstyles" for our employees (in-person, remote and hybrid) and will be allowing most employees to choose their own workstyle.

Corporate Information

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We announce material information to the public through a variety of means, including filings with the SEC, press releases, public conference calls, our website (www.zoom.com) and the investor relations section of our website (investors.zoom.us).

We use these channels, as well as social media, including our blog (blog.zoom.us), our Twitter account (@zoom_us), our LinkedIn page (linkedin.com/company/zoom-video-communications), and our Facebook page (facebook.com/zoomvideocommunications), to communicate with investors and the public about our Company, our products

and services, and other matters.

We use these channels, as well as social media, including our blog (blog.zoom.us), our Twitter account (@zoom_us), our LinkedIn page (linkedin.com/company/zoom-video-communications), our Instagram page (instagram.com/zoom), our TikTok page (tiktok.com/@zoom), and our Facebook page (facebook.com/zoomvideocommunications), to communicate with investors and the public about our Company, our products and services, and other matters.

Therefore, we encourage investors, the media, and others interested in our Company to review the information we make public in these locations, as such information could be deemed to be material information.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business