Zoom Changes Name to Emphasise AI Offerings, Gives Sales Forecast

Zoom has seen a 59 percent increase in monthly active users of its AI assistant.

By Brody Ford, Bloomberg News | Updated: 26 November 2024 15:35 IST

Zoom Changes Name to Emphasise AI Offerings, Gives Sales Forecast

Photo Credit: Zoom

Zoom said it had 3,995 Enterprise customers who contributed more than $100,000 over the past year

Highlights

In the fiscal third quarter, sales increased 3.6% to $1.18 billion
Enterprise revenue increased 5.8% to $699 million
Zoom said it’s adding $1.2 billion to its existing share buyback program

Zoom Video Communications gave a sales forecast for the current quarter that failed to impress investors who were expecting a bigger boost from the company's expanded suite of products.

Revenue will be about $1.18 billion (roughly Rs. 15,170 crore) in the period ending in January, Zoom said Monday in a statement. Profit, excluding some items, will be $1.29 to $1.30 (roughly Rs. 110) a share. Analysts, on average, projected adjusted earnings of $1.28 a share on sales of $1.17 billion (roughly Rs. 9,860 crore), according to data compiled by Bloomberg.

The shares declined about 4.5 percent in extended trading after closing at $89.03 (roughly Rs. 7,503 crore) in New York. While Zoom's outlook met estimates, the stock had gained about 48 percent since the company's last earnings report in August on optimism about the new products.

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The software maker known for videoconferencing has expanded its suite of tools to offer phone systems, a contact center application and Artificial Intelligence (AI) assistants. In October, Zoom named former Microsoft executive Michelle Chang as chief financial officer to replace Kelly Steckelberg, who left to join design startup Canva.

Zoom has seen a 59 percent increase in monthly active users of its AI assistant since the prior quarter, the company said in a presentation to supplement its earnings statement. It also topped 1,250 customers of its contact center application.

While there were “no major issues” with the results, a steep gain for the shares headed into Monday's earnings means the results may not attract new investors, wrote Tyler Radke, an analyst at Citigroup.

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Separately, the company announced it has dropped “video” from its official name and would now be known as Zoom Communications Inc. “Our new name more accurately reflects our expanding scope and plans for long-term growth,” Chief Executive Officer Eric Yuan wrote in a post announcing the change.

In the fiscal third quarter, sales increased 3.6 percent to $1.18 billion (roughly Rs. 9,946 crore), compared with analysts' average estimate of $1.16 billion (roughly Rs. 9,777 crore), according to data compiled by Bloomberg. Profit, excluding some items, was $1.38 (roughly Rs. 116.32) a share in the period ended October 31.

Enterprise revenue increased 5.8 percent to $699 million (roughly Rs. 5,891 crore). Zoom said it had 3,995 customers who contributed more than $100,000 (roughly Rs. 84.2 lakh) over the past year.

An ongoing loss of consumers and small businesses from Zoom has concerned investors, particularly since these customers are typically higher-margin than corporate clients. Average monthly churn in this segment was 2.7 percent in the quarter, which was better than analysts' estimates. Sales in the segment was little changed at $479 million (4,037 crore). That was Zoom's lowest-ever online churn, Chang said, according to remarks prepared for the company's earnings conference call.

Zoom said it's adding $1.2 billion (roughly Rs. 10,114 crore) to its existing share buyback program, raising the total repurchase authorisation to $2 billion (roughly Rs. 16,857 crore).

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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