Zoom Reports Earnings and Gives Dismal Outlook for Q1 and the Full Year

Virtual conference technology company Zoom reported its fourth quarter financial report this week, revealing that revenue growth has slowed down as employees begin to return to the office.

For the fourth quarter Zoom reported earnings per share of $1.29 adjusted. This is compared to $1.06 per share that was expected by analysts, per Refinitiv. Revenue at $1.07 billion was better than the $1.05 billion that was expected by analysts, according to Refinitiv.

Revenue had increased 21% from the year-earlier period ended on Jan. 31. That’s a deceleration from 35% growth in the prior quarter, according to a statement.

Zoom said it had 509,800 customers with over 10 employees at the end of January, down from 512,100 in October. It plans to stop reporting that number as of this quarter. The company will disclose the number of enterprise customers and the net dollar expansion rate among those clients, reflecting how much they’re increasing their spending.

The video-chat company said it now has 191,000 enterprise customers, up 35% from a year earlier. The net dollar expansion rate is 130%.

“What’s happened over time as we see this tremendous growth in online as a channel, it started to kind of overlap there, which is why we don’t think it’s really the appropriate metric to use any longer going forward,” said Kelly Steckelberg, Zoom’s finance chief, on a video call with analysts.

Looking to the current fiscal year, the company sees $4.53 billion to $4.55 billion in revenue, implying 10.7% growth. Analysts polled by Refinitiv had been looking for a bigger figure: $4.71 billion.

Sales in the current quarter will be $1.07 billion to $1.075 billion, representing growth of about 12%. Analysts polled by Refinitiv had expected $1.1 billion in revenue.

Since its stock peaked in October of 2020, Zoom has lost over three-quarters of its value

Shares initially sank as much as 13% in extended trading on Monday before rebounding.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.