Zoom Video Communications Inc. has raised its full-year revenue and profit forecasts, despite a slowdown in growth following the pandemic boom and a challenging economic environment, as per a Reuters report. Although shares of the company initially rallied nearly 5 percent before trading, they pared gains to a 0.7 percent increase after-market hours.
Zoom, which gained widespread recognition during the COVID-19 lockdowns, has faced cooling growth as offices reopen and faces stiff competition from well-established rivals like Microsoft Corp's Teams, Cisco's Webex, and Salesforce's Slack.
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The San Jose-based company revised its annual revenue forecast to a range of $4.47 billion to $4.49 billion, reflecting a growth rate of approximately 2 percent compared to last year. This adjustment comes after its previous forecast of $4.44 billion to $4.46 billion.
For the quarter ending April 30, online revenue declined by 8 percent to $473.4 million. Zoom anticipates that it will reach nearly $480 million in the second quarter and remain relatively stable throughout fiscal 2024.
Rishi Jaluria, an analyst at RBC, told Reuters that the stock's gains were limited due to the implied guidance for enterprise growth, suggesting a deceleration to around 6 percent.
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However, the company's enterprise business saw a 13 percent increase in quarterly sales, amounting to $632 million. Zoom serves a wide range of customers, including individuals, small- and medium-sized businesses, as well as larger enterprise clients.
Zoom now expects its annual adjusted profit per share to fall within the range of $4.25 to $4.31, compared to the earlier estimate of $4.11 to $4.18.
While Zoom's first-quarter revenue surpassed Wall Street estimates, it recorded the slowest quarterly growth on record at 3 percent. On an adjusted basis, the company reported earnings of $1.16 per share for the first quarter, exceeding Refinitiv IBES estimates of 99 cents, the report noted.
(With wire inputs)
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