By Dhirendra Tripathi
Investing.com – Zoom Video Communications, Inc. (NASDAQ 🙂 stock traded 4.6% lower in premarket Tuesday after video conferencing companies posted a disappointing outlook.
The company was the most visible winner in the pandemic -induced demand for services that helped people and corporations connect. As offices, schools and colleges reopen, and people return to work, the demand for services is gradually declining. To add to the challenges, the competition is also intensifying with more features in their applications.
The fact that rivals like Microsoft Teams (NASDAQ 🙂 and Google Meet (NASDAQ 🙂 are more integrated into their respective broader ecosystems also poses a challenge to Zoom’s growth.
The company beat estimates for, but the current quarter projection of $ 1.07 billion in sales fell. For the full year, Zoom expects revenue of $ 4.55 billion at the top end, which is also lower than Wall Street’s estimate of $ 4.75 billion, according to Bloomberg. On the lower side, revenue is seen at $ 4.53 billion.
Revenue in the fourth quarter rose 21% to $ 1.07 billion, the slowest growth in any quarter since it went public in 2019.
At the end of Jan. 31, Zoom had 509,800 customers with more than 10 employees, an increase of approximately 9% year-on-year. The adjusted profit per share is $ 1.29.
The company will also buy shares worth up to $ 1 billion, it said. The program will run until February 2024. It has appointed ServiceNow (NYSE 🙂 CEO Bill McDermott to the board. He will replace outgoing member and early investor Bart Swanson.