Eric Yuan, CEO, Zoom Video Communications
Zoom Shares fell more than 5% in extended trading on Monday after the video chat company released a weaker-than-expected revenue forecast for its full fiscal year.
Here’s how the company did it:
- Earnings: $1.07 per share, adjusted, versus 84 cents per share as expected by analysts, according to Refinitiv.
- Revenue: $1.10 billion, versus $1.10 billion as expected by analysts, according to Refinitiv.
Two years ago, around this time, Zoom’s challenge was to keep up with demand, as pandemic usage drove revenue up by more than 300% in 2020.
Since then, Zoom’s struggle has adapted to a non-pandemic reality. The stock has lost more than 85% of its value since its peak in October 2020, including a drop of more than 50% this year.
Revenue for the latest quarter, which ended Oct. 31, was up 5% from a year earlier, according to a statement. In the previous quarter, sales increased by 8%. Net income fell to $48.4 million from $340.3 million in the year-ago quarter.
After the stock soared in 2020, Zoom faced the twin problems of a reopening economy and increased competition, especially from Microsoft, which was pumping money into its Teams video and collaboration service. More and more business and personal meetings are happening in real life, and those that happen online aren’t necessarily on Zoom.
The company is seeing “a thorough review of agreements for new business,” Zoom CEO Eric Yuan said during Zoom’s earnings call.
Zoom continues to add large enterprise customers. At the end of the quarter, Zoom had 209,300 enterprise customers, up from 204,100 a quarter earlier. The company said its online business — including customers who subscribe directly through its website — was down 9%.
Zoom lowered its revenue forecast, mainly due to the strengthening US dollar.
The company forecasts sales for this fiscal year of $4.37 billion to $4.38 billion, down slightly from its August forecast and below analysts’ average estimate of $4.4 billion. dollars. Adjusted earnings will be $3.91 per share to $3.94 per share, higher than estimates and higher than the company’s previous guidance.
Zoom’s forecast implies revenue growth of 5% in the fiscal fourth quarter.
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