Video conferencing platform Zoom released a disappointing prediction as part of the 2022 fourth quarter 2022 financial results last night, as some workers began to return to the office and customers slowed their investment in video technology.
While quarterly revenue rose 21% year-on-year to $ 1.07 billion, this represents a deceleration from 35% growth in the previous quarter.
The company reported full-year revenues of $ 4.1 billion in 2022, up 55% year-on-year, before predicting total revenue to grow between $ 4.53 billion and $ 4.55 billion in the next fiscal year. , which was lower than analyst expectations of $ 4.71 billion. Shares dropped as much as 13% as a result.
Zoom has shifted its focus to enterprise
When the global lockouts took effect in March 2020, Zoom saw its customer numbers explode as employers turned to virtual conference software to smooth the transition to working at home. The company’s market cap rose in October 2020 to approximately $ 159 billion, but the company lost more than three-quarters of its value.
Zoom’s customer base has also dropped. By the end of January 2022, the company said it had 509,800 smaller customers with more than 10 employees, a figure down from 512,100 in October.
However, it plans to stop reporting that number this quarter, with Zoom’s chief financial officer, Kelly Steckelberg, stating in a call to analysts that Zoom thinks it’s not the appropriate metric to be used going forward.
Instead, Zoom will disclose the number of enterprise customers and the net dollar expansion rate to those clients. Regarding those metrics, Zoom said it already has 191,000 enterprise customers, up 35% from last year. The net dollar expansion rate is 130%.
Zoom was caught in the past when it revealed the number of users on its platform. In April 2020, it returned a claim that it had 300 million daily active users, after it was accused of public deception.
Despite most of the strict lockdown orders being lifted in recent months, Zoom CEO Eric Yuan sought to put a positive spin on yesterday’s announcement.
In the same analyst call, Yuan pointed to hybrid work and business workflow as the two main pillars of Zoom’s future strategy. “Over the next few years, we’re working hard to transform our business from an assembly company to a platform company,” he said.
Zoom also announced that it has appointed ServiceNow CEO Bill McDermott as an independent board director, effective March 1st.
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