Zoom Video Communications Inc’s third-quarter revenue growth rate slowed to 35 percent as demand for its video-conferencing tools eased from the pandemic-fuelled heights last year, sending its shares down about 6 percent on Monday.
Revenue was at $1.05 billion in the quarter ended October 31, Zoom said, after rising 54 percent in the previous quarter and surging 360 percent a year earlier.
The stock, a pandemic winner, fell to $227.5 in extended trading, after having lost about 28 percent this year.
Moreover, stiff competition posed by Cisco’s conferencing tool Webex and Microsoft’s Teams has made it challenging for Zoom to win over enterprise customers.
To retain its users, the company launched a variety of new offerings such as Events platform, where businesses can host large-scale conferences, cloud-calling service Zoom Phone and in-office meetings feature Zoom Rooms.
“Their Rooms and Phone businesses are 5 percent penetrated or below and that seems to imply plenty of remaining runway for growth even within their existing capabilities only,” said Joe McCormack, senior analyst at Third Bridge said.
Investment bankers and analysts have warned that Zoom faces several hurdles in sustaining growth after its $14.7 billion bid to buy call centre software firm Five9 fell through.
Still, Zoom reported an adjusted profit of $1.11 per share, beating Wall Street’s estimates $1.09 per share, according to Refinitiv data.
The company also forecast current-quarter revenue and earnings above expectations, and raised its full-year revenue estimate to around $4.08 billion from about $4.01 billion earlier.
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