Zoom Raises Its Full-year Revenue, Profit Forecast
Zoom Video Communications Inc on Monday raised its full-year forecasts for revenue and profit even as growth winds down from a pandemic boom and business spending slows in a tough economy.
Shares of the company pared gains to trade 0.7 per cent higher post market hours, after having rallied nearly 5 per cent earlier.
Zoom became a household name during lockdowns, but growth has cooled off since then as offices reopen and competition heats up from deep-pocketed rivals including Microsoft Corp’s Teams, Cisco’s Webex and Salesforce’s Slack.
San Jose, California-based Zoom raised its annual revenue forecast to between USD 4.47 billion and USD 4.49 billion, representing growth of just about 2 per cent from last year. Its earlier forecast was for USD 4.44 billion to USD 4.46 billion.
Online revenue fell 8 per cent to USD 473.4 million for the quarter ended April 30. Zoom expects it to reach nearly USD 480 million in the second quarter and be relatively flat thereafter in fiscal 2024.
“I think the stock is paring gains on the implied guidance for enterprise, which suggests it will continue to decelerate to ~6 per cent growth,” said RBC analyst Rishi Jaluria.
Quarterly sales in its enterprise business rose 13 per cent to USD 632 million.
Zoom’s online customers range from individuals to small- and medium-sized businesses, while enterprise customers consist of bigger businesses.
The company now expects annual adjusted profit per share between USD 4.25 and USD 4.31, compared with an earlier estimate of USD 4.11 to USD 4.18.
First-quarter revenue beat Wall Street estimates, but recorded the slowest quarterly growth on record at 3 per cent.
On an adjusted basis, the company earned USD 1.16 per share in the first quarter, above estimates of 99 cents, according to Refinitiv IBES.