In spite of lower expectations, Zoom Video Communications (ZM) announced revenue and earnings for the October quarter that were higher than expected. However, ZM stock projection fell short of Wall Street’s expectations, which caused shares to decline.
Results for the third quarter were released by the corporation on Monday after the market closed. Zoom’s third fiscal quarter earnings, which were reduced to $1.07 per share, were down 3% from the same period last year. Up 5% to $1.102 billion, revenue.
For the seventh consecutive quarter, sales growth slowed as the business adapted to the change in product demand following the coronavirus emergency.
For the quarter ending October 31, analysts for Zoom stock predicted earnings of 83 cents per share on revenues of $1.094 billion.
Zoom Video revised its fiscal 2023 projection downward in August.
Zoom stated that it expected earnings for the current quarter, which ends in January, to be between 75 and 78 cents, down from projections of 81 cents. In contrast to projections of $1.115 billion, the company stated it anticipates sales in the range of $1.095 billion to $1.105 billion.
According to a study by Credit Suisse analyst Fred Lee, “Overall top-line performance were in line and operational margins above guidance, although the highly watched Online segment (consumer and small business) remained tough in Q3 despite better attrition.” “Volatility surrounding online results will probably give rise to additional worry.
The software company in San Jose, California, reported having 3,286 customers who each contribute more than $100,000 annually, an increase of 31 from the previous year.
Zoom Video had $5.2 billion in cash on its balance sheet at the end of October, which was encouraging. It now has the means to make purchases.
In 2022, Zoom stock has decreased by 55%. While the demand for its videoconferencing software was initially sparked by the coronavirus pandemic, investors now anticipate increased customer churn among small-business clients as the economy returns to normal and more in-person meetings and events start up again.
