Zoom's earnings

Zoom Video Communications on Monday reported revenues and profits above market analysts' forecasts, but investors were disappointed by the slowdown in growth.

Shares of Zoom Video Communications (ZM) fell 10% after Monday's close, despite the company's generally positive financial report for the second quarter ended July 31. Zoom shares fell to a post-market low of $305.20 on Monday from $347.50 at the close of trading.

In 2020, Zoom Video's shares jumped almost five-fold; this year they are up just 3%.

Zoom's financial report for the second quarter

Earnings rose 48% to $1.36 per share, above market analysts' average forecasts of $1.16. Quarterly earnings reached $316.9m, up from $185.7m a year earlier. Sales revenues rose 54% to $1.02 billion, also above analysts' average estimate of $990.2 million, but this growth rate is three times lower than the previous quarter.

The main reason for the decline in Zoom stock on Monday was that the company gave a revenue forecast for the third quarter of fiscal 2022 in the range of $1.01 billion. 2022 in the range of $1.015bn to $1.020bn.

The earnings per share forecast for the current quarter says earnings are expected to fall to $1.07 $1.08 per share.

The company said it had 504,900 customers with more than 10 employees, up 36% from a year earlier, but analysts had expected a figure of 509,316 customers. Zoom attracted 87% more customers in the previous quarter compared to the previous quarter.

Nevertheless, the company's full-year forecast is higher than market expectations. Zoom Video's management expects that concerns about the COVID-19 Delta strain will hold back companies' plans to bring employees back into the office, in addition to the fact that working from home is becoming an increasingly popular phenomenon.

Zoom raised its annual earnings forecast from a range of $4.56 $4.61 per share to $4.75 4.79 (up from $3.34 in FY2021), above market analysts' forecasts of $4.67.

Zoom also raised its annual sales revenue forecast: from a range of $3.98 $3.99 billion to $4.005 $4.015 billion.