Market Commentary

Zoom Video Fails to Sustain Gains Despite Solid Results

Raza Akram · 1 minute read

Shares of Zoom Video Communications (ZM:US) are trading in a volatile manner after the online video company reported Q4 results.

Zoom reported earnings per share of $1.22 on revenue of $1.12 billion, beating the average analyst estimate for a profit of $0.81 per share on sales of $1.10 billion. The company’s revenue increased 4% year-over-year, marking a massive slowdown from the robust revenue growth reported in 2022. 

While the macroeconomic situation continues to negatively impact our overall growth, we have maintained a healthy balance sheet and operating cash flow generation of approximately $1.29 billion,” said Zoom founder and CEO, Eric S. Yuan.

More worryingly, Zoom expects this trend to continue. It guided to revenues from $4.435 to $4.455 billion for this year, which translates into a 1.1% growth at the midpoint of the guidance range. On the other hand, analysts were looking for $4.6 billion in full-year revenues. On a more positive note, Zoom said it expects full-year profit to be $4.11-4.18 per share, easily ahead of the consensus at $3.66.

The report comes after Zoom previously said it plans to slash 1,300 jobs, or 15% of its workforce.

Congressman Ro Khanna actively traded Zoom Video shares in 2022 while his colleague Rep. Marie Newman reported a $15,000 - $50,000 sale of Zoom shares at the beginning of the last year.