Gains in this closely watched measure have been narrowing -- last quarter, Zoom also missed predictions for big clients, which increased 36% for that period. The quarter before that, Zoom’s number of large customers jumped 87%, and in last year’s third quarter, still in the height of Covid-19 lockdowns, the increase was 485%.
Zoom’s third-quarter revenue and profit exceeded projections, and it gave an upbeat sales forecast for the current period.
Yet questions about post-pandemic growth have dogged the stock, which has dropped almost 30% this year. Investors have been closely monitoring Zoom to see whether its online meeting platform, which became a ubiquitous tool throughout the pandemic, remains widely used with many in-person activities resuming and as the company faces rising competition from companies like Microsoft Corp and Alphabet Inc’s Google.
The decline this year in Zoom’s shares caused a planned US$14.7 billion merger agreement with call-centre software vendor Five9 Inc. to fall through in September, cutting off another avenue for growth for Zoom.
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The stock initially soared as much as 9% on the forecast Monday afternoon, then fluctuated between gains and losses before turning more steeply negative. The shares had closed the New York trading day at US$242.28. While the stock surged almost fivefold in 2020, it has fallen 28% this year.
In the third quarter, which ended in October, sales rose 35% to US$1.05 billion, compared with analysts’ average estimate of US$1.02 billion, Zoom said. Profit, excluding some items, was US$1.11 a share, also beating projections. Net income was US$340.3 million, or US$1.11 per share, compared with $198.4 million, or 66 US cents, a year earlier.
Revenue will be about US$1.05 billion in the current period, the company said. Analysts on average had expected fiscal fourth-quarter revenue of US$1.02 billion.
Photo: Bloomberg
