Reuters reports that Zoom Video Communications Inc’s (ZM.O) third-quarter sales growth rate dropped to 35% as demand for its video-conferencing tools fell from pandemic-fueled highs last year, sending the company’s shares down around 6% on Monday.
Zoom reported $1.05 billion in revenue for the fiscal quarter ending Oct. 31, up 54 percent from the previous quarter and 360 percent from the previous year.
The stock, a pandemic winner, plummeted to $227.5 in extended trade after losing almost 28% this year.
Furthermore, intense competition from Cisco’s (CSCO.O) Webex conferencing technology and Microsoft’s (MSFT.O) Teams has made it difficult for Zoom to win over commercial clients.
To keep its users, the firm introduced a number of additional products, including the Events platform, which allows organisations to conduct large-scale conferences, the cloud-calling service Zoom Phone, and Zoom Rooms for in-office meetings.
“Their Rooms and Phone businesses are 5% penetrated or less, implying lots of additional headroom for expansion even within their present capabilities,” said Joe McCormack, senior analyst at Third Bridge.
After its $14.7 billion proposal to buy call centre software business Five9 Inc (FIVN.O) fell through, investment bankers and analysts cautioned Zoom that it faces multiple challenges in sustaining development. more info
Nonetheless, according to Refinitiv data, Zoom posted an adjusted profit of $1.11 per share, topping Wall Street’s forecast of $1.09 per share.
The business also forecasted higher-than-expected current-quarter revenue and profitability, and boosted its full-year revenue prediction to roughly $4.08 billion from $4.01 billion before.
