Zoom’s tepid growth forecast takes shine off billion-dollar quarter

Zoom Video Communications Inc posted its first billion-dollar revenue quarter but signaled a faster-than-expected easing in demand for its video-conferencing service after a pandemic-driven boom, sending its shares tumbling 11%.

The company on Monday forecast third-quarter revenue between $1.015 billion and $1.020 billion, compared with the analysts’ average estimate of $1.013 billion, according to Refinitiv data.

That indicates a rise of just about 31.2% from a year earlier, compared with multiple-fold growth rates in 2020 when the COVID-19 crisis had turned Zoom into a household name due to the rise of remote working and schooling.

“We had expected that (the slowdown) towards the end of the year, but it’s just happened a little bit more quickly than we expected,” Chief Financial Officer Kelly Steckelberg said on an earnings call.