Leading video conferencing software company Zoom Video Communications reported worse than expected fiscal second-quarter revenue Monday. $ZM also lowered guidance which sent the shares sharply lower by more than 8% in after-hours trading. For perspective prior to Monday’s earning’s report, Zoom shares had lost about 85% of their value since peaking in October 2020. The stock has fallen since the stay-at-home market reverted, the aborted Five9 transaction and the collapse of the manic tech bubble.
Zoom Video Communications Inc NASDAQ: ZM Reported Earnings After Close Monday
- Earnings: $1.05 per share, adjusted, vs. 94 cents per share as expected by analysts, according to Refinitiv.
- Revenue: $1.10 billion, vs. $1.12 billion as expected by analysts, according to Refinitiv.
Zoom reported fiscal second-quarter earnings ended on July 31 grew 8% year over year, slowing from 12% growth in the prior quarter. Zoom’s net income fell to $45.7 million in the quarter from $316.9 million in the year-ago quarter as the company increased spending on sales and marketing.
The strong U.S. 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 statement.
ZM said at the end of the quarter it had around 204,100 enterprise customers, up less than 3% from 198,900 three months earlier. Enterprise customers deliver 54% of total revenue. Online business customers are Zoom customers that don’t work directly with Zoom salespeople, resellers or partners.
Zoom had five straight quarters of triple-digit revenue growth during the pandemic, Zoom is now reckoning with dramatically slower expansion and a market correction that’s hammered stay-at-home stocks the most.
Zoom Video Communications Inc NASDAQ: ZM
“We have implemented initiatives focused on driving new online subscriptions, which have shown early promise but were not enough to overcome the macro dynamics in the quarter,” Steckelberg said on a Zoom call with analysts.
Zoom called for adjusted fiscal third quarter earnings of 82 cents per share to 83 cents per share on $1.095 billion to $1.100 billion in revenue. Analysts polled by Refinitiv had been looking for 91 cents in adjusted earnings per share and $1.15 billion in revenue.
Zoom has a “frictionless communications platform is the only one that started with video as its foundation, and we have set the standard for innovation ever since. That is why we are an intuitive, scalable, and secure choice for individuals, small businesses, and large enterprises alike.”
Founded in 2011, Zoom is publicly traded (NASDAQ: ZM) and headquartered in San Jose, California. Visit zoom.com and follow @zoom.
From The TradersCommunity News Desk