Zoom warns investors that the app's huge boom in popularity is making it more expensive for the company to do business
Zoom has experienced a huge increase in usage over the past few weeks — consumers and businesses alike are turning to the red-hot video chat app to stay connected amid the spread of coronavirus.
However, the increased usage puts more pressure on Zoom to keep up the quality of its product and forces the company to invest in growing its infrastructure, according to a new company filing. "We expect our cost of revenue to increase for the foreseeable future, both in absolute dollars and as a percentage of total revenue, as we expand our data center capacity and third party cloud hosting due to increased usage stemming from the recent outbreak of the COVID-19 virus," Zoom writes in the filing.
"Any unfavorable publicity or perception of our platform, including any delays or interruptions in service due to capacity constraints stemming from increased usage due to the recent outbreak of the COVID-19 virus, or of the providers of communication and collaboration technologies generally could adversely affect our reputation and our ability to attract and retain hosts," Zoom writes.
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