Zoom's weak forecast fuels fear of post-pandemic letdown

Zoom Video Communications gave a sales forecast that fell short of some analysts’ estimates, raising concerns the company will have difficulty maintaining rapid revenue growth as workers turn away from remote meetings. Shares fell about 9% in extended trading.

Revenue will be about $1.02 billion in the quarter ending in October, and $4.01 billion in the fiscal year, the San Jose, California-based company said Monday in a statement. Analysts had expected quarterly revenue of as much as $1.06 billion and annual sales of as much as $4.08 billion, according to data compiled by Bloomberg.

Zoom’s video-conferencing platform became a ubiquitous tool for work and school throughout the pandemic. With many schools restarting in person, offices reopening in some parts of the world and competition increasing from companies like Microsoft Corp. and Alphabet Inc.’s Google, investors are concerned the days of Zoom’s robust growth are over.

CEO Eric Yuan is looking for ways to keep up the pace. The company last month agreed to acquire Five9 Inc. for $14.7 billion to expand in the market for call center software, and Zoom has added premium products such as a cloud-based phone system.

In the fiscal second quarter, sales jumped 54% to $1.02 billion, compared with analysts’ average estimate of $990.2 million. Profit, excluding some items, was $1.36 a share. Analysts projected $1.16.

The company didn’t add as many large customers as analysts expected. Zoom said it had 504,900 clients with more than 10 employees, a gain of 36% from a year earlier. Analysts estimated 509,316. Zoom gained 87% more of those customers, year over year, in the previous quarter.

Shares declined to a low of $314 in extended trading after closing at $347.50. While the stock jumped almost fivefold in 2020, it has risen just 3% so far this year.