Zoom benefited from the change in the world of work during the corona pandemic for a long time. But now more and more people are returning to the office and the stock threatens to crash.
The video conferencing service Zoom has generated quarterly sales of more than one billion dollars for the first time, but expects less growth in the future. After the corona pandemic accelerated the change in the world of work and triggered a strong trend towards home offices, more and more employees are now returning to the offices. This clouded the business outlook for Zoom significantly, as the company admitted in its quarterly report published on the Monday after the US market closed.
Zoom expects growth to collapse in the next quarter
“We reached our first quarter with sales of more than one billion dollars and delivered strong profitability,” announced Zoom CEO Eric Yuan. But investors were less interested in the figures for the past quarter, which were more than expected by experts, than in the forecast for the current quarter. Here Zoom was cautious and prepared its investors for significantly weaker business growth than during the boom at the beginning of the pandemic. That didn’t go down well on the market.
After the trading hours, the share fell at around twelve percent in the red. Business was still running smoothly: In the three months to the end of July, Zoom claims that the bottom line is $ 316.9 million (EUR 268.6 million), which is over 70 percent more than in the same period of the previous year. Revenues grew 54 percent to $ 1.02 billion. But while most other companies can only dream of such strong growth rates, Zoom had grown much more strongly in the previous quarters.
Problems: Strong competition and the end of the home office time
In addition, the company assumes that the number of customers will continue to decline. For the current quarter, Zoom said “only” a 30 percent increase in revenues compared to the same period last year – here some analysts had calculated more. In the most recent quarter, there were already weak points in business development and signs that the zoom boom after the Corona crisis could fade permanently. For example, the company gained fewer lucrative major customers than assumed.
Zoom is also facing increasing competition, rivals such as Slack, but also large corporations such as Microsoft or Cisco are also vying intensely for home office users. However, Zoom has long been preparing for the time after the pandemic, when the importance of video conferencing in everyday work could decrease significantly. To broaden the business, the company made its largest takeover to date in July with the nearly $ 15 billion acquisition of call center specialist Five9.
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Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
