As companies cut down on the use of videoconferencing for work and drive workers to return to the office five days a week, Zoom Communications has pushed down it revenue expectation for this year.
Reuters reports that Zoom forecast revenue for the full year and the first quarter below Wall Street estimates, as the company navigates an environment where employers are gradually moving away from hybrid work models.
The company’s shares were down 2% to US$79.40 in extended trading on Monday.
Zoom had seen rapid growth in users and subscribers during the Covid-19 pandemic-induced lockdowns, but doubts have been raised over the sustainability of the current demand for videoconferencing.
For instance, in January, US President Donald Trump ordered federal workers to return to the office five days a week. Big firms such as JPMorgan Chase, Amazon and AT&T have also asked employees to return to office five days a week.
Across the globe, people are increasing returning to pre-pandemic work formats.
But Zoom CEO Eric Yuan said he has no concerns about companies bringing employees back to the office on a post-earnings call.
The company’s “overall growth remains sluggish compared to peers, and five years after becoming a household name, it still feels more defined by its pandemic-era surge than a compelling vision for the future”, said Jeremy Goldman, senior director of briefings at Emarketer.
Zoom expects fiscal 2026 revenue between $4.79-billion and $4.8-billion, compared with the average analyst estimate of $4.81-billion, according to data compiled by LSEG.
The integration of AI into its tools “was supposed to be Zoom’s lifeline, but so far it’s more of an expensive experiment than a gamechanger”, Goldman added.
The company will launch an upgraded version of its AI companion in April, to automate workplace tasks through custom agents.
Zoom, which also faces stiff competition from Microsoft’s collaboration software Teams, forecast first-quarter revenue in the range of $1.16-billion to $1.17-billion, below estimates of $1.18-billion. Revenue for the fourth quarter ended 31 January was $1.18-billion, in line with estimates.
On an adjusted basis, Zoom earned $1.41/share, compared with estimates of $1.30.
