Friday, December 1, 2023

Zoom’s sales growth hits an all-time low

With growth and annual sales getting harder and harder to reach, it looks like Zoom’s heyday is perhaps coming to an end. The conferencing app appears to come down from its meteoric rise. It now has to compete with more serious apps.

Recently extended trading has seen stock price drop by 7%, and the company’s revenue increase of 8% is the lowest it has ever. Some users are going back to face-to-face meetings. Others are switching to competing programs like Microsoft Teams, Google Meet, WhatsApp, Discord, and others.

Zoom’s chief financial officer, Kelly Steckelberg, recently told investors that the company expects sales to drop by 7 to 8 percent in the next fiscal year.

Eric Yuan, a former executive of Cisco, started Zoom. In 2020, when the epidemic hit, people became locked in their homes and the business grew by 300 percent. Along with TikTok, Facebook, and WhatsApp, it quickly became one of the year’s most profitable apps.

During the company’s fiscal fourth quarter, operating expenses reached $704 million. Which is a 51% increase from the same time last year. The revenue estimates for the year are about $4.39 and $4.40 billion and are less than the $4.53 to $4.55 billion predicted the year before.

As a result of these changes, Zoom has lowered its annual adjusted profit per share estimate from $3.70 to $3.77 to $3.66 to $3.69.

The Managing Director of Software at RBC Capital Markets, Rishi Jaluria, says:

Zoom is still a “show me” story. The company claims to have high growth and potential, but investors have never bought in yet.

Video conferencing leader Zoom is getting more and more competition from newcomers like Google Hangouts and Facebook Live.

Read more: Minister: Pakistan wants to Boost $15 Billion in IT Exports

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