Videoconferencing company posts its slowest quarterly growth rate but raises profit outlook for year!
Zoom Video Communications sales continued to slow as work life returns to normal and the demand for the company’s videoconferencing services winds down.
Zoom reported that sales rose 12% in its first quarter, the slowest growth rate on record, and that the top line is expected to rise less than 10% in the current period.
While it maintained its sales view for the year, Zoom just tweeted that has been selected as top rated app for video conferencing and best classroom app
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— Zoom (@Zoom) May 24, 2022
Zoom raised its profit outlook,
and the declining sales growth rate comes after the pandemic-induced surge in business that Zoom experienced as offices shut and remote work ramped up.
Now that more offices are resuming in-person workdays, the need for the popular videoconferencing service is slowly waning.
Chief Executive Eric Yuan said that,
‘Zoom is pivoting to some products that promote hybrid-work setups, as more workers are splitting time between working in the office and at home’
For the quarter ended April 30, Zoom posted earnings of $113.6 million, (or 37 cents a share) compared with $227.4 million, (or 74 cents a share) a year earlier.
- Sales came in at $1.07 billion, matching the Wall Street consensus.
While for the current quarter, Zoom’s revenue forecast of as much as $1.12 billion, according to FactSet.
The company is now forecasting adjusted per-share earnings of $3.70 to $3.77 for the year, up from a prior view of $3.45 to $3.51 a share.
Once a pandemic darling Zoom,
has fallen from its peak during the height of the coronavirus pandemic. Its shares have declined in recent weeks, part of a broader selloff that has been prompted by a flurry of concerns over a potential recession, elevated inflation, the continuing war in Ukraine and pandemic-related lockdowns in China.
Zoom has been looking for ways to augment its growth. While companies transitioned to a remote or hybrid format for most of the pandemic, the future remains unclear on how Corps will continue their working habits.
*Airbnb indicated that it will allow their staff to work from home indefinitely, and many other Companies are looking into the possibility