Zoom’s sales growth is slowing as the retreat from the high pandemic continues

Zoom Video Communications Inc. sales growth. weakened in the fourth quarter, indicating that demand for the company’s videoconferencing application is no longer rooted in daily life as more conditions from the Covid-19 pandemic begin to decline.

The company is based in San Jose, Calif. said its sales rose to $ 1.07 billion for the three months ended Jan. 31, compared to $ 882.5 million last year. Analysts expect $ 1.05 billion in sales for the quarter.

At 21%, year-over-year sales gain was the slowest the company recorded, according to data from FactSet. In the October quarter, sales rose approximately 35% year-over-year.

Zoom estimates total revenue of between $ 1.07 billion and $ 1.08 billion in the first quarter of the 2023 fiscal year, lower than analysts ’expectations of $ 1.1 billion. The high end of its guidance will mean sales growth of approximately 12%.

For the year, the company said it expects revenue to range from $ 4.53 billion to $ 4.55 billion, up approximately 11% for the recently concluded fiscal 2022.

In a call to analysts, chief finance officer Kelly Steckelberg said the guidance calls for its sales to large companies — its business to business — to grow 20% year-on-year, while the online business — self-service customers — that has been almost flat for years.

Ms. said. Steckelberg said the company views the enterprise market as more driven by current customers and new services such as its recently launched contact-center capabilities.

Zoom shares less than 2% in trading after hours. The stock closed at $ 132.60 on Monday, up 5.8%. It’s down almost 65% over the past 12 months.

Once a pandemic darling, Zoom fell from its peak when coronavirus treatments were virtually unavailable and most of the world operated on platforms like Zoom while people remained indoors. Questions about Zoom’s future prospects are likely to increase as Covid-19 conditions improve and competitors continue to fight for market share.

Microsoft Corp. said. in July that its Teams application, which combines videoconferencing and other collaboration features, reached record levels, with nearly 250 million monthly active users. Microsoft also aims to bring Teams to every Window user as part of its next -generation operating system currently being launched.

Meta Platforms Inc., formerly called Facebook, is also included because it aims to create other remote-collaboration workspace opportunities through virtual worlds known as metaverse.

Zoom is looking for ways to increase its growth. The nearly $ 15 billion acquisition attempt by contact center company Five9 Inc. in September was blocked by selling shareholders.

In November, Zoom said it would begin showing ads in its applications for users of free basic services. Its cloud-based phone business Zoom Phone is another area the company is exploring to find new growth.

The company said it has 2,725 customers who have contributed more than $ 100,000 in the past 12 months, a 66% increase from the previous year. Zoom said it has approximately 509,800 customers with more than 10 employees, up about 9% from the previous quarter of the year.

Zoom posted $ 490.5 million in net income attributable to common stockholders for the fourth financial quarter, up from $ 260.4 million last year. Fixed earnings of $ 1.29 per share were ahead of analysts ’expectations of $ 1.07.

The company said it appointed Bill McDermott to its board, effective Tuesday. Mr. McDermott, the president, CEO and director of software company ServiceNow, replaces Bart Swanson. Additionally, the board authorized a stock repurchase program of up to $ 1 billion of Zoom’s remainder.

This story was published from the wire agency feed without changing the text

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