Sales fall short of estimates due to slower growth
Zoom Video Communications Inc. forecasted sales for the current quarter that fell short of Wall Street expectations, adding to the burden on the software supplier to demonstrate that it can keep growing after the pandemic surge.
Sales in the first quarter of 2022 will be roughly $1.07 billion, compared to an average expectation of $1.1 billion by analysts. Zoom estimates sales of $4.55 billion for the full year, which is also below Wall Street’s forecast of $4.75 billion.
The company has approved a share buyback plan for up to $1 billion
Zoom is struggling to continue the rapid growth it had during the epidemic, when its video conferencing platform was a critical tool for businesses to communicate and link their scattered workforces.
Investors are wary of Zoom’s future prospects as more employees return to their offices, citing the stock’s 75 percent decrease from its October 2020 high to Monday’s price of $132.60 per share in New York.
Zoom has started a $1 billion share repurchase program that will last until February 2024. To grow its business and assuage investor worries, the company has broadened its product range, selling new landlines and internet-enabled technology to assist businesses improve the quality of their meetings.
Despite its accomplishments in broadening its product offering, Zoom continues to face severe competition from Microsoft Corp. Analysts, on the other hand, believe that the market potential is vast enough for both firms to thrive.
“We want to increase our go-to-market activities and grow our platform to further empower clients with emerging cloud technologies,” said Zoom CEO Eric Yuan.