Like other technology companies, Zoom has faced many challenges over the last year or so. And that continued today with its quarterly earnings report.
The company reported better-than-expected adjusted earnings per share ($1.07 vs. $0.84), while revenue of $1.10 billion met expectations. 👍
The economic reopening and increased competition from players like Microsoft have caused Zoom’s growth to plummet. Additionally, as the economy softens and companies look to cut costs, it’s facing a “heightened deal scrutiny for new business.” This means deals take longer to close than in the past.
Net income was down roughly $300 million YoY, and revenues grew just 5%. It now has 209,300 enterprise customers, up from 204,100 last quarter. But its online business, where customers subscribe directly through its website, fell 9%.
Lastly, the company reduced its revenue guidance primarily due to a strong U.S. Dollar. 💵
Overall, investors were not thrilled with the results. Selling pressure sent $ZM shares down another 7% after hours toward its year-to-date lows. 🔻
