Zoom faces reopening of businesses, CFO says as inventories drop

Zoom faces reopening of businesses, CFO says as inventories drop

On April 18, 2019, Zoom founder Eric Yuan plays the Nasdaq opening bell with confetti falling in New York City.

Kena Betankur | Getty Images

Investors got a glimpse of Zoom in the aftermath of the pandemic on Monday after the video calling software company reported better-than-expected second quarter results. However, the company struggled to compare year over year as offices reopened and live events returned.

Zoom shares fell more than 16% on Tuesday morning.

Company executives have explained the slow growth even as it delivered its first quarter of $ 1 billion.

“What we’re seeing… are headwinds in our big markets, so it’s individual consumers and small businesses. And, as you say, they’re moving around the world now. People are taking vacations again, they go to happy hour in person, ”Zoom CFO Kelly Steckelberg told CNBC’s“ Squawk Box ”on Tuesday morning.

“As we moved into the second half of Q2 we started to see an additional churn rate and that is reflected in our outlook for the rest of the year and I think you see that in the response from the stock. “, he added.

Zoom’s forecast for the current quarter called for strong growth in its direct and channel business, with weakness in online business due to challenges among small customers and consumers.

Despite the stock’s drop, analysts were confident the company would grow as part of the company’s efforts.

Sterling Auty of JPMorgan said, “Look, we still think Zoom is a very good franchise with huge growth in its future, but we expect the market to experience a different level of growth based on their expectations. valuation. development should be streamlined.

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