Zoom's Tepid Growth Forecast Takes Shine Off Billion-Dollar Quarter
Zoom posted its first billion-dollar revenue quarter but signaled a faster-than-expected easing in demand for its video-conferencing service after a pandemic-driven boom, sending its shares tumbling 11 percent.
The company on Monday forecast third-quarter revenue between $1.015 billion (roughly Rs. 7,415 crores) and $1.020 billion (roughly Rs. 7,450 crores), compared with the analysts’ average estimate of $1.013 billion (roughly Rs. 7,400 crores), according to Refinitiv data.
That indicates a rise of just about 31.2 percent from a year earlier, compared with multiple-fold growth rates in 2020 when the COVID-19 crisis had turned Zoom into a household name due to the rise of remote working and schooling.
“We had expected that (the slowdown) towards the end of the year, but it’s just happened a little bit more quickly than we expected,” Chief Financial Officer Kelly Steckelberg said on an earnings call.
Zoom has faced pressure this year as vaccinations encourage schools to reopen and more companies to bring employees back to offices.
Competition from legacy platforms such as Cisco’s Webex and Microsoft Teams has also dented its efforts to win bigger contracts from businesses.
