(Reuters) -Zoom Video Communications Inc on Monday cut its annual profit and revenue forecasts as demand for the video-conferencing platform cools off from pandemic highs, sending its shares down over 7% in extended trading.
Analysts have raised concerns about the company’s prospects as competing platforms such as Microsoft’s Teams, Cisco’s WebEx and Google’s Meet fight for video-conferencing market share.
Zoom has an uphill task onboarding large clients, which contribute more than $100,000 in revenue, to sustain its pandemic-levels of growth at a time when companies are struggling with decades-high inflation.
The company forecast revenue between $4.39 billion and $4.40 billion, compared with its earlier outlook of $4.53 billion to $4.55 billion.
San-Francisco-based Zoom now expects annual adjusted profit per share between $3.66 and $3.69, compared with $3.70 to $3.77 forecast earlier.
Founded by former Cisco manager Eric Yuan, Zoom reported its slowest revenue growth on record, up 8% at $1.1 billion in the second quarter, snapping an estimate-beating streak since it went public.
Finance chief Kelly Steckelberg said revenue was hurt by a stronger dollar, performance of the online business and reduced sales towards the closing half of the quarter.
The company’s adjusted earnings per share of $1.05 topped market expectations, even as its quarterly operating expenses grew 51% to $704 million as it invests in products to sustain demand.
(Reporting by Eva Mathews in Bengaluru;Editing by Vinay Dwivedi)
