Shares of Zoom in free-fall after the video conferencing company warned investors of a revenue slowdown. Zoom shares tumbled to 17-month lows on Tuesday after the video conferencing platform posted its slowest quarterly revenue growth in recent years.
Once the darlings of investors amid the 2020 pandemic when its stock was trading at $444.51, Zoom stock is now trading below $200 as of the time of writing. Zoom became popular during the pandemic as governments around the world placed millions of people on lockdown and forced them to stay in their homes. With nowhere else to go, millions turned to Zoom’s conference technology in order to keep up with school, work, or socializing.
Thanks to vaccines, people have now returned back to their normal lives. Tired of staring at the computer screen for hours, most people probably don’t want to have anything to do with Zoom again unless it’s unavoidable. The change has a big impact on Zoom’s bottom line and the company said its revenue is set to slow further.
However, the slow growth did not come as a surprise to the company. Zoom recognizes it must make sure its products remain relevant in the post-COVID world as people start to return to the office. In February, the company unveiled virtual receptionists for when people start going back to the office. The new tool lets people visiting offices check in with a receptionist without physical contact.
Overall, it’s not all bad news for the decade-old company. Zoom’s revenue increased 35% from a year earlier in the quarter, which ended October 31, slowing from 54% growth in the quarter before. For the fiscal fourth quarter, Zoom on $1.051 billion to $1.053 billion in revenue, which implies 19% growth.
In April 2020, Zoom grew by over 50 percent in just 3 weeks, topping 497,000 customers with more than 10 employees, up from 81,900 in January 2020. Zoom said user growth could slow or decline as more people get vaccines and return to work or school in person.
Zoom was founded in 2011 by Eric Yuan. Just like all immigrants looking for a better life, Yuan immigrated to the United States from China in the mid-90s because of the Internet. Yuan’s visa application was denied 8 times before he came to the U.S. Today, Yuan is worth over $12 billion.