Zoom’s revenue slows down as it succumbs to stiff competition

0
Zoom X
Zoom X

Videoconference giant platform Zoom saw a slum in its shares to 17-month lows  this week after posting its slowest quarterly revenue growth amid stiff competition from rivals Cisco, Microsoft and Salesforce.com.

Even though Zoom saw a 35% jump in revenue to US$1.05 billion this week, that jump was abysmal compared with the astronomical 360% jump in revenue when the pandemic hit last year.

“With top-line growth still weighed down by weakening trends in the micro segment from pull-forward and temporary pandemic business, we look for a clear line of sight to the growth trough,” Reuters quoted brokerage firm Needham as saying.

Zoom’s addition of new customers with over 10 employees also grew at its slowest pace at 18%, below pre-pandemic levels when the company was not yet a household name.

The company’s growth at small and medium businesses might be saturating, while it has barely penetrated the large enterprise market, Third Bridge analyst Joe McCormack said.

However, developing it into a contact centre product will take longer after its $14.7-billion deal to buy call centre software provider Five9 fell through last month.

Shares of Zoom fell about 14% to $208.15 in early trading. The stock has nearly halved in value since hitting a peak of $114-billion last year as the pandemic raged.

“For now, investors will need some patience as we do not see any upcoming catalysts that would change the sentiment on the stock,” Evercore analysts wrote in a note.

Send your news stories to [email protected] and via WhatsApp on +233 244244807
Follow News Ghana on Google News

LEAVE A REPLY

Please enter your comment!
Please enter your name here