Zoom, the category-king video conferencing system, had its moments last year at the peak of the pandemic. It saved businesses and markets. The company just reported a quarterly revenue in excess of 1 billion. That number is a milestone for the company as that was the first time it broke the billion mark. Call it a mark for a great celebration!
But if you look deeper, that revenue is coming from double plays, which though fine, does not explain the challenge on the one oasis which has powered the evolution of Zoom. And that is a problem for the company going forward.
The problem is evident here: Zoom’s Alexa ranking has dropped from 15 to 17 and that means it has lost millions of traffic. That is indirectly revenue lost by the company: “while the 54% increase in revenue does not match the company’s growth from a year-earlier, when its “services … made it ubiquitous during the pandemic,” Zoom said it’s seeing signs of demand easing as smaller companies start to meet back in person, rather than over screens”. That is why Zoom has lost more than 16% of its value in the last five days.
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“Zoom Video Communications Inc.’s quarterly revenue surpassed $1 billion for the first time in the company’s history, though the strong demand for its videoconferencing services that made it ubiquitous during the pandemic is showing signs of easing as regular activities resume.
“The roughly 54% increase in revenue, while slightly better than Wall Street expected, couldn’t match the huge growth that Zoom had in the year-earlier period, when revenue surged fourfold compared with the prior year as companies leaned more heavily into remote working.
“While the company forecast revenue of more than $1 billion again in the current quarter, its adjusted earnings guidance came in lower than expected. And company officials said small businesses and consumers were starting to spend less as opportunities for in-person meetings and gatherings expand. Zoom officials said some metrics supercharged by the pandemic had begun to normalize as customers returned to “more thoughtful, measured buying-patterns.”
“Zoom shares fell 12% in after-hours trading, after closing up 2% on Monday.
“Research firm International Data Corp. projects that collaboration applications will become a roughly $51 billion market by 2025, nearly double 2020 levels.”
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