Zoom Sales Growth Continued to Decline

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Zoom Sales Growth Continued to Decline
26 May 2022
6 min read

News Synopsis

Zoom Video Communications Inc's revenue continued to decline as work-life returned to normal and demand for its video conferencing services eased. Based in San Jose, California, the company announced on Monday that first-quarter sales were expected to grow at a record low of 12% and sales are expected to grow by less than 10% this quarter.

Zoom has raised its earnings guidance while maintaining its sales view for the year. The company's share price, which fell more than 51% this year, rose 14% in after-hours trading but lost much of that bounce.

The decline in revenue growth is due to the pandemic-related business surge that Zoom experienced when offices were closed and remote work increased. Today, as more offices resume work from the office, the need for popular video conferencing services is diminishing.

Zoom has been looking for ways to boost its growth. Chief Executive Eric Yuan said the company is working on the evolution from a conferencing company to a multi-product platform. The company's cloud-based phone business, Zoom Phone, and the recently launched contact center are part of the company's growth strategy.

Some efforts have failed. Zoom's September attempt to acquire about $15 billion in contact center company Five9 Inc. was thwarted by the sale of shareholders.

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