Zoom Video Communications Inc (NASDAQ:ZM) has reported its slowest quarterly revenue growth on record and reduced its annual profit and revenue forecasts as demand for the video-conferencing platform cooled further from coronavirus (COVID-19) pandemic highs amid stiff competition.
The company said it now forecasts annual revenue of between $4.39 billion and $4.40 billion, compared with its earlier outlook of $4.53 billion to $4.55 billion.
Zoom added that it now expects annual adjusted profit per share of between $3.66 and $3.69, compared with earlier forecasts of $3.70 to $3.77 per share.
The company's revenue in its fiscal quarter ended July 31, 2021, grew by 8% year-on-year, slowing from 12% growth in the prior quarter. Zoom’s second-quarter net income fell to $45.7 million, down from $316.9 million in the year-ago quarter as the company increased spending on sales and marketing.
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Zoom posted second-quarter revenue of $1.10 billion, albeit slightly better than the $1.12 billion forecast by analysts, while adjusted earnings were $1.05 per share versus the 94 cents per share expected by analysts. The firm saw its operating expenses grow by 51% to $704 million in the three months to end-July.
A strong US dollar, performance in the company’s online business and sales that got weighted toward the end of the quarter negatively impacted revenue in the quarter, Kelly Steckelberg, Zoom’s finance chief, said in the company's earnings statement.
Zoom said it expects its online business to be down 7% to 8% in the full fiscal year, compared with its forecast for no growth in that part of the business earlier
Founded by a former Cisco executive, Zoom posted triple-digit revenue growth at the peak of the pandemic as those made to work from home took to video-conferencing to communicate.
Zoom stock fell 2.5% in after-hours trading in New York to $97.45. Excluding the after-hours move, Zoom shares have fallen 47% so far this year.
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