By Tiyashi Datta
(Reuters) -Zoom Video Communications Inc on Monday raised its full-year forecasts for revenue and profit even as growth winds down from a pandemic boom and business spending slows in a tough economy.
Shares of the company pared gains to trade 0.7% higher post market hours, after having rallied nearly 5% earlier.
Zoom became a household name during lockdowns, but growth has cooled off since then as offices reopen and competition heats up from deep-pocketed rivals including Microsoft Corp’s Teams, Cisco’s Webex and Salesforce’s Slack.
San Jose, California-based Zoom raised its annual revenue forecast to between $4.47 billion and $4.49 billion, representing growth of just about 2% from last year. Its earlier forecast was for $4.44 billion to $4.46 billion.
Online revenue fell 8% to $473.4 million for the quarter ended April 30. Zoom expects it to reach nearly $480 million in the second quarter and be relatively flat thereafter in fiscal 2024.
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“I think the stock is paring gains on the implied guidance for enterprise, which suggests it will continue to decelerate to ~6% growth,” said RBC analyst Rishi Jaluria.
Quarterly sales in its enterprise business rose 13% to $632 million.
Zoom’s online customers range from individuals to small- and medium-sized businesses, while enterprise customers consist of bigger businesses.
The company now expects annual adjusted profit per share between $4.25 and $4.31, compared with an earlier estimate of $4.11 to $4.18.
First-quarter revenue beat Wall Street estimates, but recorded the slowest quarterly growth on record at 3%.
On an adjusted basis, the company earned $1.16 per share in the first quarter, above estimates of 99 cents, according to Refinitiv IBES.
(Reporting by Tiyashi Datta in Bengaluru; Editing by Devika Syamnath)