Zoom’s attempts to pivot from a pandemic tool to an everyday working essential have hit some major stumbling blocks.
Zoom’s shares slid more than 8 per cent overnight after the video conferencing software company cut its annual revenue forecast, sales forecast, and reported it is losing sales faster than anticipated.
Online sales to consumers and small businesses are expected to decline 7-8 per cent this year, Chief Financial Officer Kelly Steckelberg said on an earnings call.
Zoom reduced its annual sales forecast to about A$6.38 billion, down from its May projection of up to A$6.6 billion. This is due to the “broader economic environment” coupled with the stronger US dollar, according to the company.
Revenue will be about A$1.59 billion in the period ending in October, well below the A$1.68 billion expected by Wall Street. Profits will be 82c to 83c a share, down from expectations of 91 cents.
Second quarter sales increased just 7.6 per cent to A$1.6 billion, marking the company’s slowest year-on-year growth to date, and the first time they missed Wall Street estimates. Zoom has 204,100 enterprise customers, an increase of 18 per cent from a year earlier, but under estimates of 205,854 enterprise customers.
In order to stem the bleed, Zoom has attempted to focus on larger corporate clients with a new line of products.
“Our recently launched Zoom Contact Center and Zoom IQ for Sales products saw some great early wins while Zoom Phone delivered milestone results, hitting a record number of licenses sold in the quarter,” CEO Eric Yuan said of the company’s path forward.
