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Zoom Video Communications Inc. (ZM), the video conferencing company that turned into a verb during the pandemic, rose 5% in New York trading after beating revenue estimates.
Key Takeaways
- First quarter total revenue of $1.10 billion was slightly higher than expectations.
- Enterprise revenue of $630 million, was better than $620 million projected.
- Management predicted robust revenue for the full year but weak growth.
The company, which analysts had expected to say sales grew slower than ever in the first quarter, reported revenue of $1.11 billion, compared with analysts’ expectations of $1.08 billion. Zoom reported enterprise revenue of $630 million, above estimates, and raised its full-year revenue forecast to between $4.47 billion and $4.49 billion.
Zoom shares, up almost 3% on the day before the announcement, climbed anew afterwards to $71.41.
Despite the earnings beat, Zoom has struggled with a lack of customer growth since the end of work-at-home pandemic rules. While U.S. sales are still rising, they’re doing so at nowhere near the triple-digit growth of 2020.
Zoom faces competition from artificial intelligence offerings from the likes of Microsoft, which will integrate ChatGPT into its Teams messaging service. Although Zoom recently invested an undisclosed amount in a Chatbot from Anthropic, Microsoft spent $7 billion and Google is spending $11.5 billion on R&D in the quarter.