When the Covid-19 pandemic hit the world and forced millions of people around the world to sit at home while being connected to others virtually, video-conferencing platforms, including Zoom, witnessed a massive increase in user numbers.
One of the favourites during the initial months of the pandemic, Zoom on May 23 reported the slowest quarterly revenue growth since the company went public.
As reported, in the first quarter, revenue increased by 12% to $1.07 billion, the slowest growth rate.
This happened because the demand for video-conferencing tools is now reducing as many people are now returning to office.
The company, Zoom Video Communications Inc, increased its full-year adjusted profit forecast, betting on strong demand from large businesses in a hybrid work environment, sending shares up 15% in extended trading.
Its revenue from high-paying enterprise customers increased by 31% in the first quarter, accounting for 52% of overall revenue, according to the company.
Chief Financial Officer Kelly Steckelberg reportedly said in a post-earnings call with analysts that the company was expecting revenue from enterprise customers to grow as a percentage of total revenue over time.
In the quarter ending April 30, the company’s adjusted operating margin increased by 37.2% as efforts to grow its enterprise products to customer service contact centres, cloud calling and analytics companies paid off.
Zoom expects adjusted profit per share to be between $3.70 and $3.77 for the full year, compared to $3.45 and $3.51 previously.
However, demand for the company’s platform has declined in recent quarters as Covid-19 lockdowns have relaxed and competition from Microsoft Teams, Cisco WebEx, and Google Meet has increased.
According to a report from early 2020, daily downloads of the Zoom app had surged 30 times year over year, and the app had been the top free app for iPhones in the United States since March 18.
Zoom had then said its daily users increased to 200 million in March 2020, up from 10 million in December 2019.
Zoom has lost 85% of its value since hitting a high in 2020.
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