Zoom Video Communications Inc.’s results showed that its transition from an essential COVID-era tool to an enterprise business platform is going to take longer than expected. The shares plunged to a closing price last seen in January 2020 before the company began its meteoric rise.
Zoom has responded by intensifying its focus on larger enterprise clients and pitching an expanded line of products such as software for customer contact centers. In June, the company unveiled a new service bundle -- Zoom One -- to highlight offerings like internet-connected phones and physical conference rooms. Analysts are generally positive on these secondary offerings, particularly Zoom Phone, but believe they will take time to pay off.
The company also reduced its annual sales forecast to about US$4.4 billion from its May projection of as much as US$4.55 billion. About US$115 million of the cut is due to the “broader economic environment” and US$35 million is due to the stronger US dollar, Steckelberg said during the call.