Zoom cuts annual revenue forecast as video-conferencing service demand wanes

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.

Zoom Video Communications Inc on Monday lowered its annual revenue forecast amid waning demand for the video conferencing platform as pandemic restrictions ease and competition amps up.

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.

Zoom now expects annual revenue to be between $4.37 billion and $4.38 billion, compared with an earlier outlook of $4.39 billion and $4.40 billion.

The company, however, raised its annual adjusted profit per share to between $3.91 and $3.94, compared with $3.66 to $3.69 forecast earlier.

Revenue for the third quarter ended Oct. 31 rose 5% to $1.1 billion.

"In the third quarter, we drove revenue above guidance with continued momentum in Enterprise," said chief executive Eric Yuan.

On an adjusted basis, the company earned $1.07 per share during the quarter, compared with estimates of 84 cents per share, according to Refinitiv data.