Zoom Video Communications on Monday lowered its annual revenue forecast, as the video-conferencing platform expects a hit from declining online business.
Zoom chief financial officer Kelly Steckelberg said during a post-earnings call that the company’s online business would decline nearly 8 percent during the year.
After recording blistering growth during the pandemic, Zoom, which competes with WeChat Work, Microsoft Teams, Cisco WebEx and Slack, is facing a slowdown as red-hot inflation is dampening the spending power of customers.
The easing of pandemic-related restrictions across the world is also weighing on its business as people started spending less time online.
Shares of the San Jose, California-based company, which have fallen nearly 56 percent this year, were down 5 percent in trading after the bell.
Zoom now expects annual revenue to be between US$4.37 billion (A$6.6 billion) and US$4.38 billion, compared with an earlier outlook of US$4.39 billion and US$4.40 billion.
“Guidance suggests further weakness in both enterprise and online. It is tough to disaggregate how much of this is macro, especially given slowing down in hiring or layoffs in tech, and how much is competition,” said RBC analyst Rishi Jaluria.
“The focus for Zoom remains on its ability to expand to become a larger platform,” he added.
Revenue for the third quarter ended October 31 rose 5 percent to $1.1 billion, on the back of a 20 percent increase from high-paying enterprise customers, the company said.