By Alice Seeley
As many companies are finally recovering from the COVID-19 pandemic and employees are returning to the office, video conference platform Zoom is struggling to adapt. This week, a day after the company reported that its quarterly earnings were below expectations, Zoom’s stock fell over 15% to under $82 per share.
Zoom’s chief financial officer, Kelly Steckelberg, stated weighted sales, the strong U.S. dollar, and performance in the company’s online business negatively impacted the company’s revenue.
“We have moved beyond the pandemic buying patterns,” said Steckelberg. “And as we believe this customer behavior will persist, we have factored it into our outlook.”
The quarterly report also revealed that the company’s revenue grew at an annual rate of 8%
this quarter, down from 12% in the first quarter. Last year, the net income was almost $317 million.
Following the slow quarter, Zoom lowered its projections for the full 2023 fiscal year, primarily blaming economic conditions that have caused experts to revise their views. Citi analysts downgraded the stock and said the company’s condition was worse than expected. Citi analyst Tyler Radke cut his rating of Zoom to a rare “sell.”
An analyst at Mizuho Securities USA, Siti Panigrahi, expects the rest of the fiscal year to be “a transition year as Zoom invests to build a durable, post-pandemic growth profile.”
The company is trying to create more revenue by releasing new products such as the Zoom Phone voice service, which lets customers make phone calls over the internet, and a lower-priced Zoom Rooms conferencing platform.