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 (NASDAQ:MSFT)'s Teams, Cisco (NASDAQ:CSCO)'s Webex and Salesforce (NYSE:CRM)'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.
"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.