Eric Yuan, Founder and CEO of Zoom Video Communications Inc., speaks at the BoxWorks 2019 Conference at the Moscone Center in San Francisco, CA, USA on Thursday, October 3, 2019.
Michael Short | Bloomberg
zoom video communication Shares fell as much as 9% in extended trading on Monday after the video calling software maker lowered its full-year earnings and earnings forecasts.
Here’s how the company did it:
- Earnings: Analysts are expecting 94 cents per share, compared to an adjusted $1.05 per share, according to Refinitiv.
- Earnings: Analysts expected $1.12 billion, compared to $1.1 billion, according to Refinitiv.
Zoom’s second-quarter revenue grew 8% year-over-year, slowing from 12% growth last year. last quarteraccording to, statementThe second quarter ended on July 31st. Zoom’s net income fell to $45.7 million from $316.9 million in the same period last year due to increased spending on sales and marketing.
Zoom’s financial chief Kelly Steckelberg said in a statement that the strong dollar, performance of the company’s online business, and weighted sales towards the end of the quarter had a negative impact on earnings for the quarter. rice field.
In a Zoom meeting with analysts, Steckelberg said the company had “an initiative focused on facilitating new online subscriptions that showed early promise but wasn’t enough to overcome the macro dynamics of the quarter.” Carried out.
The company said it had about 204,100 enterprise customers at the end of the quarter. This is the business unit that Zoom’s direct sales team, resellers, or partners work with. That’s less than a 3% increase from his 198,900 three months ago. Enterprise customers provide 54% of total revenue. An online business customer is a Zoom customer who does not interact directly with a Zoom sales representative, reseller, or partner.
In terms of guidance, Zoom called for adjusted accounting third-quarter earnings of 82 cents per share to 83 cents per share on earnings of $1.095 billion to $1.1 billion. Analysts surveyed by Refinitiv had expected adjusted earnings of 91 cents per share and earnings of $1.15 billion.
Management lowered its guidance for the full fiscal year 2023 to adjusted earnings per share of $3.66 to $3.69 and earnings of $4.385 billion to $4.395 billion, a 7% increase in the middle of the earnings range. suggests the growth of An analyst surveyed by Refinitiv had expected adjusted earnings of $3.76 per share and earnings of $4.54 billion. Three months ago, the outlook was for adjusted earnings per share of $3.70 and $3.77 and earnings in the range of $4.53 billion to $4.55 billion. Economic conditions were the primary reason for management to revise its views.
“As the majority of revenue has returned to businesses and outpaced pandemic buying patterns, a more normalized revenue stream with linearity focused on the quarterly backend,” Steckelberg said in a Zoom conference call. We are back in the corporate sales cycle. This has led to higher than expected deferred revenue in the second quarter and we expect this customer behavior to continue, which is why we factored it into our outlook.”
The company expects online business to decline 7% to 8% for the full year. Mr. Steckelberg said Zoom changed its spending forecast for the second half of the year to prioritize areas with higher returns on investment, such as research and development and sales operations.
Zoom may be able to make more money with tighter pricing.
“I think we’re being a little too kind about how we market our products in terms of discounts, don’t we?” Greg Tomb, president and former president of Zoom Google said over the phone. “So I think we can be a little bit smarter about how we price and discount our products.”
This quarter, Zoom announced a new pricing structure. zoom one It said it had agreed to acquire a conversational artificial intelligence software start-up. SorbyCiti downgraded Zoom’s stock from hold equivalent last week, citing increased competition and economic pressure on small businesses and spending in less-needed categories.
Excluding after-hours activity, Zoom’s stock has fallen 47% so far this year, while the S&P 500 Index has fallen 13% over the same period.