Zoom issues disappoint revenue forecasts as growth continues to slow

Video Conferencing Platform Zoom made a disappointing forecast as part of the 2022 Q4 financial results last nightas some workers began returning to the office and customers were slow to invest in video technology.

While quarterly revenue grew 21% year-over-year to $1.07 billion, this represents a deceleration from the 35% growth in the previous quarter.

The company reported full-year revenue of $4.1 billion in 2022, up 55% from the same period last year, before forecasting total revenue to grow from $4.53 billion to $4.53 billion. $55 billion in the next fiscal year, below analyst expectations of $4.71 billion. . As a result, the stock fell as much as 13%.

Zoom shifts focus to business

When the global lockdown went into effect in March 2020, Zoom saw its customer numbers explode as employers turned to virtual conferencing software to help with the transition to work. work at home goes well. The company’s market capitalization peaked in October 2020 at around $159 billion, but the company has lost more than three-quarters of its value.

Zoom’s customer base is also down. At the end of January 2022, the company said it had 509,800 smaller customers with more than 10 employees, a number down from 512,100 in October.

However, it plans to stop reporting that number as of this quarter, with Zoom’s chief financial officer, Kelly Steckelberg, stating on a call with analysts that Zoom doesn’t think it’s the right metric. suitable for future use.

Instead, Zoom will disclose the number of business customers and net dollar expansion rates between those customers. On those metrics, Zoom says it now has 191,000 business customers, up 35% from a year earlier. The net dollar expansion rate is 130%.

Zoom has been catch out in the past when disclosing the number of users on its platform. In April 2020, it denied a claim that it had 300 million daily active users, after being accused of misleading the public.

Although most of the strictest lockdown regulations have been lifted in recent months, Zoom’s CEO, Eric Yuan, sought to take a positive stance on yesterday’s announcement.

On the same call with the analyst, Yuan pointed to the mix and business process as two key pillars of Zoom’s future strategy. “Over the next few years, we are working very hard to transform our business from a meeting organizer into a platform company,” he said.

Zoom also announced that it has appoint ServiceNow CEO Bill McDermott as independent director of the board, effective March 1.

Copyright © 2022 IDG Communications, Inc.

https://www.computerworld.com/article/3651678/zoom-posts-disappointing-revenue-forecast-as-growth-continues-to-slow.html#tk.rss_all Zoom issues disappoint revenue forecasts as growth continues to slow

Fry Electronics Team

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