March 28, 2023

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The latest reports surrounding the share prices for Zoom show that the company is experiencing a significant drop. The data shows that on Monday, August 30, trading the share prices for Zoom experienced a plunge. The share prices for Zoom reportedly experienced a 12% drop on August 30 trading.

The drop in Zoom’s share prices was observed despite the video-calling software sharing above-expectation revenues for the recent quarter of the fiscal year. The company reported that the earnings Zoom has shared are higher than what the analysts had estimated in the first place.

Despite exceeding the revenue expectations, Zoom is now demonstrating a slower growth rate compared to the previous quarters of the fiscal year. This is the reason why a significant drop has been observed in the share prices for the company.

When it comes to generating earnings and revenue, the analysts had predicted that the company would achieve earnings worth $1.16 per share. However, the actual earnings Zoom succeeded in achieving were $1.36 per share.

As for revenue for the fiscal fourth quarter, the analysts had predicted that the revenue would be $991 million. However, Zoom succeeded in achieving a revenue worth $1.02 billion from the fiscal fourth quarter.

The estimations for the earnings and revenues for Zoom in the fiscal fourth quarter were collected from analysts through the Refinitiv survey.

For the fiscal fourth quarter, Zoom reported that its revenue had increased 54% more than what it had achieved in the former fiscal fourth quarter. Whereas, in the fiscal third quarter, the revenue growth rate Zoom achieved compared to the former fiscal third quarter was 191%.

However, it may come as sad news for the Zoom investors that Zoom’s growth expectations for the upcoming quarters are going to be even lower. It is evident from the expectations that have been set by the analysts for the upcoming quarter.

For the upcoming quarter, the analysts have reportedly set the guidelines for the growth of Zoom at 31%. This is going to be even lower than the 54% growth rate that was observed by Zoom in the recently ended quarter.

When it comes to the gross margin, in the previous quarter, it was 72.3%, but in the next quarter, it has been widened to 74.4%.

In the recently ended quarter, Zoom was able to generate a high gross margin. It happened because reportedly managed to deploy a new data center to increase the capacity of the platform.

According to analysts, the main reason Zoom’s utility decreased in the second quarter of 2021 was attributed to the summer holidays. Due to the summer holidays, the utility of Zoom decreased significantly as the schools were closed due to the summer holidays.

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