Home Industry Technology Zoom slumps as video-conferencing company cuts sales forecast Fiscal second-quarter sales increased 7.6 per cent to $1.1bn by Bloomberg August 23, 2022 Zoom Video Communications projected sales and profit for the current quarter that fell short of Wall Street’s estimates, suggesting tightening corporate budgets and increased competition are weighing on the enterprise software maker. The shares fell in extended trading. Revenue will be as much as $1.1bn in the period ending in October, the San Jose, California-based company said Monday in a statement. Analysts, on average, expected $1.16bn, or growth of about 10 per cent from a year earlier, according to data compiled by Bloomberg. Profit, excluding some items, will be 82 cents to 83 cents a share, compared with analysts’ average estimate of 91 cents. For the full year, Zoom reduced its sales forecast to as much as $4.4bn from its May projection of as much as $4.55bn. Zoom’s breakneck growth during the pandemic has cooled considerably as offices reopen and competition intensifies from Microsoft Corp.’s Teams video communications platform. Zoom has responded by intensifying its focus on larger enterprise clients and pitching an expanded line of products such as software for customer contact centers. In June, the company unveiled a new service bundle – Zoom One – to highlight offerings like internet-connected phones and physical conference rooms. Analysts are generally positive on these secondary offerings, particularly Zoom Phone, but believe they will take time to pay off. Shares declined to a low of $87 in extended trading after closing at $97.44 in New York. The stock has dropped 47 per cent this year, and has missed out on the big rally in technology stocks since mid-June. Fiscal second-quarter sales increased 7.6 per cent to $1.1bn, Zoom’s slowest year-over-year growth on record. Analysts, on average, estimated $1.12bn – making it the first quarter that the company has missed revenue estimates. Zoom’s post-Covid growth has been constrained even more as companies, particularly small- and medium-sized businesses, tighten their information technology budgets in the face of an uncertain economy, Tyler Radke, a Citigroup analyst, wrote in a note before the results were released. Microsoft’s Teams is also making a bigger dent in Zoom’s business, he added. In the period ended July 31, the company said it had 204,100 enterprise customers, an increase of 18 per cent from a year earlier. The growth was lower than a 24 per cent increase in the previous quarter. Analysts, on average, projected Zoom would report 205,854 enterprise customers. Tags Businesses customers Economy Revenue Zoom 0 Comments You might also like Egypt’s central bank leaves overnight interest rates steady Egypt counts on foreign funds to buy gas as power crisis worsens Bahrain to impose 15% minimum tax on large multinationals Egypt’s net foreign assets positive for third straight month in July