This content is not available in your region

Zoom shares tumble as revenue growth slows

Zoom shares tumble as revenue growth slows
Zoom shares tumble as revenue growth slows   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Akash Sriram</p> <p> – Shares of Zoom Video Communications Inc slumped to 17-month lows on Tuesday after the video conferencing platform posted its slowest quarterly revenue growth amid stiff competition from deep-pocketed rivals Cisco, Microsoft and Salesforce.</p> <p>The company on Tuesday posted a better than expected third-quarter revenue of $1.05 billion, although that came at a 35% jump compared with an astronomical 360% in the pandemic-hit year earlier. </p> <p>“With topline 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,” said brokerage Needham.</p> <p>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.</p> <p>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.</p> <p>However, developing it into a contact center product will take longer after its $14.7 billion deal to buy call-center software provider Five9 fell through last month. </p> <p>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.</p> <p>“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.</p> <p/> </div>