Zoom has cut its annual profit and revenue forecast as demand for the video conferencing platform cools down.
The company forecast annual revenue between $4.39 billion and $4.40 billion, compared with its earlier outlook of $4.53 billion to $4.55 billion. Zoom now expects adjusted annual earnings per share of between $3.66 and $3.69 compared with $3.70 to $3.77 predicted.
Chief Financial Officer Kelly Steckelberg told analysts that the company’s online business is likely to decline seven per cent to eight per cent in fiscal 2023. Already in the reported quarter, the company’s operating expenses grew 51 per cent to $704 million in the three months to July.
Zoom posted revenue of $1.1 billion for the quarter ended July 2022, missing analyst estimates by 1.51 per cent.
Zoom saw triple-digit revenue growth at the peak of the pandemic in 2020 as people continued to work from home and use their platform for communication.
However, the company faces the difficult task of getting cash-rich customers on board to sustain its growth and has also seen a huge jump in costs as it continues to spend significant sums to attract customers who have been reigning in spending amid high inflation.