Zoom raises its full-year revenue and profit forecasts despite the slowdown in growth
On Monday, Zoom Video Communications Inc raised its full-year revenue and earnings forecasts, even though growth is slowing as a result of the pandemic boom and business spending is slowing in a tough economy.
The company’s shares were 0.7% higher in after-market hours, after rising nearly 5% earlier.
Zoom became a household name during the shutdown, but growth has since cooled as offices reopen and competition heats up from deep-seated rivals such as Microsoft Corp’s Teams, Cisco’s Webex and Salesforce’s Slack.
San Jose, Calif.-based Zoom raised its annual revenue forecast to between $4.47 billion and $4.49 billion, up only about 2 percent from last year. Its previous forecast was $4.44 billion to $4.46 billion.
Online revenue fell 8% to $473.4 million in the quarter ended April 30. Zoom expects that to rise to nearly $480 million in the second quarter and then be relatively flat in 2024.
“I think the stock is undercutting the companies’ implied guidance, which suggests its growth will further slow to around 6%,” said RBC analyst Rishi Jaluria.
Its corporate quarterly sales rose 13 percent to $632 million.
Zoom’s online customers range from individuals to small and medium-sized businesses, while corporate customers are larger companies.
The company now expects adjusted earnings per share in the range of $4.25 to $4.31, down from a previous estimate of $4.11 to $4.18.
First-quarter revenue beat Wall Street estimates, but posted the slowest quarterly growth on record at 3%.
On an adjusted basis, the company earned $1.16 per share in the first quarter, topping estimates of 99 cents, according to Refinitiv IBES.
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