Zoom Video’s Longtime CFO Resigns

Brief description of the dive:

• Zoom Video Communications Chief Financial Officer Kelly Steckelberg will step down from her role as CFO after seven years in the role, the company announced Wednesday as part of its fiscal 2025 second-quarter earnings report.
• Steckelberg will remain as CFO until the videoconferencing provider reports results for the fiscal quarter ended Oct. 31, according to a securities filing. Zoom has hired an executive search firm to find Steckelberg’s successor.
• Steckelberg played an “integral” role at Zoom, “leading our 2019 IPO and continuing to drive momentum as our customer base rapidly expanded during the pandemic,” Zoom founder and CEO Eric Yuan said Wednesday during the company’s second-quarter financial results conference call. “Under her strong financial leadership, Zoom has maintained a consistent record of profitability and cash flow growth.”

Diving Insight:

The San Jose, California-based company tapped its CFO’s financial expertise during its 2019 initial public offering, during which Steckelberg reorganized the company’s operations to better support sales and focused on cash flow and profitability, Steckelberg told CFO Dive in a 2019 interview.

Zoom’s stock price rose rapidly in the days following its IPO, with the company reaching a market cap of nearly $17.7 billion in three days — making it the most valuable tech company to go public this quarter, as CFO Dive previously reported. Its cautious approach to growth also led to it being named CFO Dive’s 2020 CFO of the Year.

Steckelberg, who joined Zoom in 2017 after serving as CEO of online dating platform Zoosk, also made the list of the highest-paid CFOs in recent years. Her compensation increased significantly in 2023, making her the second-highest-paid CFO of the year, behind only former Walmart CFO John Rainey, The Wall Street Journal reported.

The majority of her $36.7 million compensation for 2023 came from a stock award valued at $36.3 million, according to Zoom’s proxy statement for fiscal 2023.

According to his 2024 proxy statement, Steckelberg received total compensation of approximately $13.3 million, consisting of a base salary of $361,385, a stock award of $12.9 million, incentive compensation of $25,949 and other compensation of $5,858.

Following Steckelberg’s departure from Zoom, the CFO will be entitled to receive accrued compensation through the date she leaves the company in October, according to a transition agreement filed with the Securities and Exchange Commission. Steckelberg’s equity awards will also continue to be due throughout the transition period until her departure, according to the agreement.

Despite the news of the departure of its longtime CFO, Zoom shares rose 11% after better-than-expected earnings results, and the company raised its full-year revenue guidance to a range of $4.630 billion to $4.640 billion. The stock is currently up about 12%, according to Nasdaq.

The videoconferencing platform reported total revenue of $1.1 billion in the most recent quarter ended July 31, up 2.1% year-over-year, according to financial results.

The Company also increased its cash flow from operating activities during the quarter by 33.7% year-over-year to $449.3 million, while net income increased to approximately $216 million during the quarter compared to $181 million during the same period last year.

Zoom declined to comment beyond remarks made during Wednesday’s financial results conference call.