Published - May 23nd, 2023 @ 10:15 AM (GMT+2 )
Zoom (NASDAQ: ZM) boosts yearly revenue and profit forecasts despite pandemic growth slowdown.
Zoom Video Communications Inc (NASDAQ: ZM), the well-known video conferencing platform, on Monday, boosted its full-year revenue and profit projections. This update comes amidst a slowdown in the pandemic-fueled growth and a challenging economic environment resulting in diminished business expenditure.
Zoom shares trimmed their gains in after-hours trading, inching 0.7% higher, having previously surged almost 5%.
Known for its ubiquity during the lockdown period, Zoom's growth trajectory has witnessed a downtrend as economies reopen and businesses resume physical operations. Increased competition from formidable players like Microsoft's Teams, Cisco's Webex, and Salesforce's Slack also adds to the headwinds.
Zoom's revised revenue forecast indicates around 2% growth, after an 8% dip in online revenue last quarter.
The San Jose-based tech giant revised its annual revenue projection to $4.47 billion to $4.49 billion, marking a modest growth of approximately 2% compared to the previous year. The previous forecast was pinned between $4.44 billion to $4.46 billion.
For the quarter ending on April 30, Zoom's online revenue took an 8% dip, settling at $473.4 million. For Q2 and the rest of the fiscal 2024, Zoom anticipates this figure to hover around $480 million.
Rishi Jaluria, an analyst at RBC, opines that the muted response to the stock could be attributed to the less than impressive guidance for enterprise growth, which is predicted to decelerate to around 6%.
Zoom's enterprise business sales experienced a 13% increase, hitting $632 million in the most recent quarter. Zoom's clientele is diversified, catering to individuals, small and medium businesses, and giant corporations.
Zoom projects annual profit per share of $4.25-$4.31, up from the previous $4.11-$4.18, despite slowest-ever quarterly growth of 3%.
Zoom now predicts an adjusted annual profit per share in the range of $4.25 to $4.31, an uptick from the prior estimate of $4.11 to $4.18.
The company's Q1 revenue surpassed Wall Street predictions despite showcasing the slowest quarterly growth rate ever at 3%. On an adjusted basis, Zoom's earnings per share for Q1 stood at $1.16, exceeding the expected 99 cents, as per Refinitiv IBES.
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