(Reuters) – Zoom Video Communications Inc on Monday signaled demand for its video-conferencing service was slowing after a pandemic-driven boom last year, sending its shares tumbling 8% in after-market trading.
The company forecast current-quarter revenue between $1.015 billion and $1.020 billion, compared with the analysts’ average estimate of $1.013 billion, according to Refinitiv data.
The COVID-19 crisis turned Zoom into a household name in 2020 as people working and studying at home turned to its platform. But vaccinations are encouraging schools to reopen and more companies to bring employees back to offices.
Competition from legacy platforms such as Cisco’s Webex and Microsoft Teams has also dented the company’s efforts to win bigger contracts from businesses.
Zoom said it expected adjusted earnings of $1.07 to $1.08 per share in the current quarter, compared with expectations of $1.09 a share.
Its margins have taken a hit due to increased spending on its data centers and cloud computing services from vendors such as Amazon.com Inc as free users surge on the video conference provider’s platform.
It forecast annual revenue in the range of $4.01 billion to $4.02 billion for the fiscal year 2022, roughly in line with expectations.
The company posted a profit of $1.04 per share in the second quarter on revenue of $1.02 billion, both of which were higher than analysts’ estimates.
(Reporting by Eva Mathews in Bengaluru; Editing by Aditya Soni)
