StockOpine's avatar
$40.8m follower assets
$ZM SBC as a % of revenue
$ZM SBC as a % of revenue is increasing due to additional RSUs granted to existing employees. Those employees were initially granted RSUs when the stock was in the $300-$400s.

Is this the case for other software companies as well?

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Arthur Svidzinski's avatar
Wow, that skyrocket really fast!
StockOpine's avatar
@asvid indeed. But this was driven by the nosedive in the price of $ZM shares and the need to award more units to keep employees happy.
Arthur Svidzinski's avatar
@stockopine Ok, but it´s still a lot of dilution to handle
StockOpine's avatar
@asvid absolutely! While it seems reasonable to issue additional RSUs now in order to retain talent, on the hindsight it seems odd to grant employees RSUs when the stock is at all-time highs. This is true especially when you had the cash to pay them, like in the case of $ZM.
Fat Baby Funds's avatar
Revenue had grown substantially during this time as well!
StockOpine's avatar
@fatbaby absolutely! $ZM growth was outstanding over the last few years.
Dissecting the Markets's avatar
When using a company's stock based compensation as a % of revenue, does this signify additional dilution?
StockOpine's avatar
@dissectmarkets effectively yes. Think of it in two ways. You can either pay employees a salary or give them RSUs. Either way reduces the amount left for existing shareholders.
StockOpine's avatar
@stockopine RSU may not have a direct cash flow impact at the time of grant but in the future a value is ‘taken away’ from existing shareholders.
Arthur Svidzinski's avatar
@stockopine That´s a new way of raising capital from employees :)
Joshua Simka's avatar
I would imagine the chart for $SNOW looks pretty similar?