Zoom shares drop after it reports slowing momentum as Covid demand eases
Zoom’s third-quarter revenue growth rate slowed to 35 per cent as demand for its video-conferencing tools eased from the pandemic-fuelled heights last year, sending its shares down about 6 per cent.
Revenue was at $1.05bn (£786m) in the quarter, after rising 54 per cent in the previous quarter and surging 360 per cent a year earlier.
Zoom reported an adjusted profit of $1.11 per share, beating Wall Street’s estimates of $1.09 per share, according to Refinitiv data.
Investment bankers and analysts have warned that Zoom faces several hurdles in sustaining growth after its $14.7bn (£11bn) bid to buy call center software firm Five9 Inc fell through, reported Reuters.
The company also forecast current-quarter revenue and earnings above expectations, and raised its full-year revenue estimate to around $4.08bn from about $4.01bn earlier.
Shares of Zoom Video Communications Inc slumped to 17-month lows on Tuesday after the tech firm posted its slowest quarterly revenue growth.
The video conferencing company has faced fierce competition from tech veterans including Cisco, Microsoft and Salesforce.
While Zoom posted third-quarter revenue that beat revenue expectations at £$1.05bn, revenue grew 35 per cent compared to 360 per cent in the year prior.
Zoom faces a challenge of retaining customers as they return to offices and schools now lockdown restrictions have lifted in many countries and millions of customers have been vaccinated.
Shares dropped 18 per cent. The stock has nearly halved in value since it hit a peak of $114bn last year during the pandemic.