Zoom’s sales growth slows even as enterprise business stays steady

ZOOM Video Communications reported its slowest quarterly sales growth on record and slightly reduced its full-year revenue forecast. Shares declined about 3 per cent in extended trading.

Revenue increased 5 per cent to US$1.1 billion, in line with analysts’ average estimate. For the full year, the company reduced its sales forecast to as much as US$4.38 billion from its August projection of as much as US$4.4 billion.

Still, Zoom produced profit that exceeded Wall Street estimates, and raised its full-year earnings forecast, a sign the software vendor’s enterprise business remains steady after a post-pandemic slowdown.

Zoom, which burst into public consciousness during the height of the pandemic, is fighting to reverse a slowdown in growth for its video communications service by expanding its tools for business. At its annual user conference earlier this month, it unveiled email and calendar services, which it hopes will keep more workers on the platform.

“We drove revenue above guidance with continued momentum in enterprise,” chief executive officer Eric Yuan said in the statement, highlighting better-than-expected profit. But the company continues to be affected by currency fluctuations and “heightened deal scrutiny for new business”, he said in remarks prepared for a conference call with analysts.

Fiscal third-quarter profit, excluding some items, was US$1.07 a share, the San Jose, California-based company said on Monday (Nov 21) in a statement. Analysts, on average, projected 83 US cents a share. Full-year earnings will be as much as US$3.94 a share, the company said, an increase from Zoom’s August forecast of as much as US$3.69 a share.

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Zoom renames chat product, adds features in push to compete with Teams, Slack

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Shares declined to a low of US$76.03 in extended trading after closing at US$80.26 in New York. The stock has dropped 56 per cent this year and is hovering near pre-pandemic levels. BLOOMBERG