Zoom raises full-year forecast for revenue and profit despite slowing growth

Zoom Video Communications Inc on Monday raised its full-year forecasts for revenue and profit, even as a pandemic buoyed growth and slowed business spending in a tough economy.

Shares of the company pared gains to trade 0.7% higher post market hours, after rumbling nearly 5% earlier.

Zoom became a household name during the lockdown, but growth has since cooled as offices reopened and competition has heated up from deep-pocketed rivals including Microsoft Corp’s Teams, Cisco’s Webex and Salesforce’s Slack.

San Jose, California-based Zoom raised its annual revenue forecast to between $4.47 billion and $4.49 billion, representing growth of about 2% from last year. Its earlier estimate was $4.44 billion to $4.46 billion.

Online revenue fell 8% to $473.4 million for the quarter ended April 30. Zoom expects that to reach about $480 million in the second quarter and then be relatively flat in fiscal 2024.

RBC analyst Rishi Jaluria said, “I think the stock is narrowing gains on the implied guidance for Enterprise, which suggests it will continue to post growth of ~6%.”

Quarterly sales in its enterprise business rose 13% to $632 million.

Zoom’s online customers range from individuals to small and medium-sized businesses, while enterprise customers include large businesses.

The company now expects annual adjusted profit per share of between $4.25 and $4.31, compared with the earlier estimate of $4.11 to $4.18.

First-quarter revenue beat Wall Street estimates but posted its slowest quarterly growth of 3%.

On an adjusted basis, the company earned $1.16 per share in the first quarter, above estimates of 99 cents, according to Refinitiv IBES.

(This story has not been edited by News18 staff and is published from a syndicated news agency feed – reuters,