Futu news on April 23, unicorn cloud video conferencing software provider Zoom continued to rise strongly today, rising to 12% at one point, and the share price hit a new high. As of press time, Zoom rose more than 10% to $72.349.

It is worth noting that after just three days of listing, Zoom has risen by more than 100% and currently has a market capitalization of $18.2 billion.

Zoom is a SaaS company, also known as Software-as-a-service (Software as a Service), whose main business is to provide video conferencing services. Under the SaaS mode, the provider builds all the network infrastructure, software and hardware operation platforms needed for informatization for customers, and is responsible for a series of services such as pre-implementation and post-maintenance. Customers can use the information system through the Internet without purchasing software and hardware, building computer rooms and recruiting IT personnel.

According to the analysis of the US financial media Medium, the advantage of the SaaS model lies in its recurrent income and high profit margin. The main cost of this type of enterprise is the continuous development cost, because developers and engineers need to be paid high salaries in order to build, maintain, and upgrade the technology.

Zoom's prospectus shows that for the fiscal year ended January 31, 2019, the company had revenue of $331 million and a net profit of $7.58 million. By contrast, R & D spending is just $33 million. In other words, Zoom's R & D spending accounts for less than 10% of revenue, well below the industry average and even less than half of the median level of peer R & D spending.

Zoom's low R & D costs and net profit of $7.6 million in fiscal 2019 were largely due to the low wages of its employees.Zoom made it clear in the "risk factors" section of its prospectus: "our product development team is mainly in China, where labor costs are lower than in many other regions. If we move the product development team to other regions, we may have to bear higher operating expenses, which will adversely affect our operating margins and damage our business. "

In additionFounder of ZoomYuan Zheng's fortune soared to $4 billion.Yuan ZhengFounded in 2011, Yuan Zheng owns 22% of Zoom based on outstanding shares and options, the company disclosed in a regulatory filing in March. Excluding unexercised options, Yuan Zheng owns more than 53 million shares in Zoom.