Zoom tempers annual profit, revenue outlook as demand falters

Zoom Video Communications on Monday (Aug 22) cut its annual profit and revenue forecast, as the video-conferencing platform invests in its products to sustain demand while grappling with intensifying competition.

Analysts have raised concerns about Zoom’s prospects as the pandemic recedes and competitors such as Microsoft’s Teams, Cisco’s WebEx and Google’s Meet fight for video-conferencing market share.

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

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

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

Zoom, which saw demand spike for its tools during the height of the pandemic, also reported its slowest revenue growth on record at 8 per cent to US$1.1 billion in the second quarter ended Jul 31. Reuters