Zoom made an eye-popping market debut on Thursday, with an opening price of $65, well above its offering price of $36. The cloud enterprise video communication company began trading on the Nasdaq market under the ticker symbol "ZM" with an IPO of 20,869,565 shares. Its opening price gives it a valuation North of $10 billion -- well above its last private valuation of $1 billion.
The IPO sets high expectations for a newly-public company up against major enterprises like Microsoft and Cisco, as well as a number of other start-ups in the competitive collaboration space. Still, as a Silicon Valley unicorn that's both profitable and growing robustly, Zoom has managed to drum up major market excitement.
"While the price is fun to look at, we're thinking about it as a single point in time and a huge responsibility for our shareholders, for the team to deliver upon," Zoom CMO Janine Pelosi told ZDNet.
"I think we're going to continue to focus on what has gotten us to this point," she continued. "Our approach is substantially different versus legacy providers. Our platform provides face-to-face video and was built for that. Other legacy providers were built for screen sharing and audio, so their video doesn't work the same way as ours."
In its SEC filing, Zoom says it's generated "viral enthusiasm" with a communications platform that "just works" for large enterprises and small teams alike. As ZDNet's Larry Dignan notes, the cloud-based company has adopted pragmatic operations and a tried-and-true sales strategy with a smart vertical approach. It's also forging partnerships with companies like HP to grow its office space presence.
The San Jose, Calif. company, founded in 2011 by former Webex engineer Eric Yuan, has grown by more than 100 percent in the past two years and achieved profitability in the last year. For the year ended Jan. 31, Zoom reported net income of $7.58 million on revenue of $330.5 million, up from $151.5 million in fiscal 2018.
"Our scale, our growth, our profitability, the way we've been able to move up market... has all pointed to this being the right time" for an IPO, Pelosi said.
The strong IPO, Pelosi said, is a testament to the demand for solid unified communications (UC) platforms like Zoom offers.
"As we move into this UC market that we're serving, which video is definitely a part of, as well as things like webinar, our Zoom phone system that we recently launched, collaboration, chat -- all of that presents such a large market opportunity," she said. "When companies are doing well, it steps up everyone's game."