Zoom tempers annual profit, revenue outlook as demand falters

Small toy figures are seen in front of the Zoom logo in this illustration picture taken March 15, 2021. REUTERS/Dado Ruvic/Illustration

Aug 22 (Reuters) – Zoom Video Communications Inc (ZM.O) on Monday cut its annual profit and revenue forecasts as demand for the video-conferencing platform cools off from pandemic highs, sending its shares down over 7% in extended trading.

Analysts have raised concerns about the company's prospects as competing platforms such as Microsoft's Teams, Cisco's WebEx and Google's Meet fight for video-conferencing market share.

Zoom has an uphill task onboarding large clients, which contribute more than $100,000 in revenue, to sustain its pandemic-levels of growth at a time when companies are struggling with decades-high inflation.

The company forecast revenue between $4.39 billion and $4.40 billion, compared with its earlier outlook of $4.53 billion to $4.55 billion.

San-Francisco-based Zoom now expects annual adjusted profit per share between $3.66 and $3.69, compared with $3.70 to $3.77 forecast earlier.

Founded by former Cisco manager Eric Yuan, Zoom reported its slowest revenue growth on record, up 8% at $1.1 billion in the second quarter, snapping an estimate-beating streak since it went public.

Finance chief Kelly Steckelberg said revenue was hurt by a stronger dollar, performance of the online business and reduced sales towards the closing half of the quarter.

The company's adjusted earnings per share of $1.05 topped market expectations, even as its quarterly operating expenses grew 51% to $704 million as it invests in products to sustain demand.

Reporting by Eva Mathews in Bengaluru;
Editing by Vinay Dwivedi

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Source:www.reuters.com