Shares of Zoom (ZM) - Get Report zipped higher Monday amid a report the fast-growing video conferencing company is considering plans to roll out encryption services for paying customers and some institutions like schools.
Zoom's stock price rose 2.43% to $183.85 a share in pre-market trading Monday as Reuters reported details of the encryption plan the company is hammering out amid a wave of "Zoombombing" by hackers and pranksters that have disrupted meetings and led some institutions to ban its use.
"Zoom’s approach to end-to-end encryption is very much a work in progress -- everything from our draft cryptographic design, which was just published last week, to our continued discussions around which customers it would apply to," a Zoom spokesperson told TheStreet.
The news comes a day before Zoom is set to unveil its quarterly earnings on Tuesday, with analysts expecting a strong report amid a video-conferencing boom driven by the coronavirus lockdown.
Zoom security consultant Alex Stamos confirmed to Reuters details of the discussion, with the video conferencing company having briefed civil-liberties advocates and activists battling child-sex abuse on a call on Thursday.
While encryption would protect user privacy and freeze out hackers, it could also make it harder to track illegal activity, an issue some in Congress have raised concerns about.
Zoom CEO Eric Yuan is currently looking at different arguments around the issue, with the "current plan" focusing on "paid customers plus enterprise accounts where the company knows who they are," Stamos, a former top security official at Facebook, told the news service.
"At the same time Zoom is trying to improve security, they are significantly upgrading their trust and safety," Stamos said.
Analysts are expecting Zoom to report a big jump in revenue when it reports its first quarter earnings on Tuesday, with estimates in the $199 million to $201 million range, up from $188.3 million in the fourth quarter.