Video conferencing platform Zoom released a disappointing forecast as part of its Last night, the financial results for the fourth quarter of 2022as some workers begin to return to the office and customers slow down their investments in video technology.
While quarterly revenue grew 21% year-on-year to $1.07 billion, that represents a deceleration from 35% growth in the prior quarter.
The company reported annual revenue of $4.1 billion in 2022, up 55% year-over-year, before forecasting total revenue to reach between $4.53 billion and 4. $55 billion in the next fiscal year, which was below analysts’ expectations of $4.71 billion. . Shares fell 13% as a result.
Zoom focuses on business
When global lockdowns came into effect in March 2020, Zoom saw its customer numbers explode as employers turned to virtual conferencing software to ease the transition to working from home. The company’s market capitalization peaked in October 2020 at around $159 billion, but the company has since lost more than three-quarters of its value.
Zoom’s customer base is also on the decline. At the end of January 2022, the company said it had 509,800 small customers with more than 10 employees, down from 512,100 in October.
However, it plans to stop reporting that number starting this quarter, with Zoom CFO Kelly Steckelberg saying on a call with analysts that Zoom doesn’t believe that’s the appropriate metric to use at the time. to come up.
Instead, Zoom will disclose the number of enterprise customers and the net dollar expansion rate among those customers. Regarding those metrics, Zoom said it now has 191,000 enterprise customers, up 35% from a year earlier. The dollar’s net expansion rate is 130%.
Zoom has been caught off guard in the past when disclosing the number of users on its platform. In April 2020, it backtracked on a claim that it had 300 million daily active users, after being accused of misleading the public.
Although most of the stricter lockdown mandates have been lifted in recent months, Zoom CEO Eric Yuan sought to put a positive spin on yesterday’s announcement.
On the same analyst call, Yuan said hybrid working and business workflow were the two key pillars of Zoom’s future strategy. “Over the next few years, we will work very hard to transform our business from a meeting company to a platform company,” he said.
Zoom also announced that it has appointed Bill McDermott, CEO of ServiceNow, as an independent director of the board, effective March 1.
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