Zoom (ZM) revenues Q4 2022

Eric Yuan, founder and CEO of Zoom Video Communications, stood in front of the opening bell during the company’s initial public offering at the Nasdaq MarketSite in New York on April 18, 2019.

Victor J. Blue | Bloomberg | Getty Images

Zoom shares fell as much as 13% in extended trading on Monday after the maker of the video-calling software released a full-year guide that was lower than analysts predicted.

Here’s what the company did:

  • Earnings: $ 1.29 per share, adjusted, compared to $ 1.06 per share as expected by analysts, according to Refinitiv.
  • Revenue: $ 1.07 billion, compared to $ 1.05 billion as analysts expected, according to Refinitiv.

Zoom’s revenue rose 21% from a year earlier in the period that ended Jan. 31. That’s a deceleration from 35% growth in the previous quarter, according to a statement.

Net income rose 88% in the quarter to $ 490.5 million while gross margin widened to 76% from 74.2% in the previous period.

However, in the first quarter and for the entire year, Zoom forecast earnings that were lower than analysts ’expectations. Sales in the current quarter will be $ 1.07 billion to $ 1.075 billion, representing growth of approximately 12%. Analysts polled by Refinitiv expect $ 1.1 billion in revenue.

For the current financial year, the company sees $ 4.53 billion to $ 4.55 billion in revenue, indicating 10.7% growth. Analysts polled by Refinitiv are looking for $ 4.71 billion in revenue.

Zoom’s business began in the early months of the pandemic as businesses, universities and consumers adjusted to home life and communications via video. The company’s market cap increased in October 2020 to approximately $ 159 billion. At the time, it was almost as valuable as Cisco, whose market cap reached approximately $ 170 billion. Zoom is led by its founder, Eric Yuan, an early creator of Webex, acquired by Cisco in 2007. Since its stock hit, Zoom has lost more than three-quarters of its value, while Cisco has gained of about 40%. The companies are now separate with a market cap of approximately $ 190 billion.

Zoom said Bill McDermott, CEO of service-desk software maker ServiceNow and former CEO of enterprise software developer SAP, will replace investor Bart Swanson on the Zoom board.

Before moving after hours, Zoom shares were down nearly 29% for the year, poorly performing the S&P 500 index, which was down nearly 9% over the same period.

Executives will discuss the results with analysts in a Zoom call beginning 5 pm ET.

—CNBC’s Ari Levy contributed to this report.

This is breaking news. Please come back for updates.

WATCH: The results for Zoom should have implications for broader software stocks, says Citi’s Radke


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