Zoom Stocks Plunge As Sales Growth Slows

Shares of Zoom Video Communications sank in post-trading after it warned investors that sales growth could slow as pandemic eases. 

The software company sharply plummeted 6.80% or 16.48 points to $225.80 per share. It also trailed its Monday low of 3.59% or 9.02 points to $242.28 per share. 

Accordingly, Zoom explained in its latest earnings call that the demand for its video-conferencing application declines along with the pullback in the Covid-19 pandemic.

In its third-quarter fiscal year 2022, revenue edged lower 35.00% year-over-year to $1.05 billion from the 54.00% growth last quarter. 

On a positive note, it surpassed the market estimate of $1.02 billion. 

Correspondingly, Zoom also acquired 2,507 new customers contributing more than $100,000 in total revenue. 

To retain its users, the company launched an Events platform where businesses can hold large-scale conferences. 

In addition, it also offered cloud-calling service Zoom Phone, and in-office meetings feature Rooms.

At the same time, its earnings per share climbed 12.10% to $1.11 per share. It also came in higher than the analysts’ forecast of $1.09. 

Consequently, its net income gained 71.00% to $340.30 million from the prior figure of $198.40 million last year. 

Moreover, its forecasted current-quarter revenue and earnings exceeded the expectations. 

Zoom projected its earnings with a 19.00% jump to $1.06 to $1.07 per share, higher than the analyst estimate of $1.05. 

The tech business also looked forward to revenue of $1.05 billion, while experts anticipated $1.02 billion in revenue.

Furthermore, it also adjusted its full-year revenue estimate to around $4.08 billion from about $4.01 billion earlier. 

During the quarter, Zoom cancelled its acquisition of software provider Five9. Following the announcement, it explained that its cloud contact center would launch next year.

US Futures Skid as Zoom Tumbles

Meanwhile, US index futures declined on Tuesday trading as Zoom tumbled. 

The Dow futures plunged 0.10% or 34 points to $35,537.00 per share. 

Similarly, the Nasdaq futures lost 0.26% to 42.25 points to $16,340.50 per share. 

Also, contracts in the S&P shed 0.15% or 7.00 points to $4,672.75 per share. 

Then, Wall Street mixed as they closed on Monday. The Dow Jones Industrial Average index advanced 0.05% or 17.27 points to $35,619.25 per share. 

Conversely, the benchmark S&P 500 curtailed 0.32% or 15.02 points to $4,682.94 per share. 

Likewise, the Nasdaq Composite index fell 1.26% or 202.68 points to $15,854.76 per share.