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Zoom shares tumble as revenue growth slows

Nov 23 (Reuters) – Shares of Zoom Video Communications Inc (ZM.O) slumped to 17-month lows on Tuesday after the video conferencing platform posted its slowest quarterly revenue growth amid stiff competitors from deep-pocketed rivals Cisco (CSCO.O), Microsoft (MSFT.O) and Salesforce (CRM.N).

The firm on Tuesday posted a greater than anticipated third-quarter revenue of $1.05 billion, though that got here at a 35% soar in contrast with an astronomical 360% within the pandemic-hit yr earlier. learn extra

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“With topline growth still weighed down by weakening trends in the micro segment from pull-forward and temporary pandemic business, we look for a clear line of sight to the growth trough,” stated brokerage Needham.

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Zoom’s addition of latest prospects with over 10 staff additionally grew at its slowest tempo at 18%, beneath pre-pandemic ranges when the corporate was not but a family title.

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The firm’s growth at small and medium companies is perhaps saturating, whereas it has barely penetrated the big enterprise market, Third Bridge analyst Joe McCormack stated.

However, growing it right into a contact heart product will take longer after its $14.7 billion deal to purchase call-center software program supplier Five9 (FIVN.O) fell by final month. learn extra

Shares of Zoom fell about 14% to $208.15 in early buying and selling. The inventory has practically halved in worth since hitting a peak of $114 billion final yr as the pandemic raged.

“For now, investors will need some patience as we do not see any upcoming catalysts that would change the sentiment on the stock,” Evercore analysts wrote in a be aware.

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Reporting by Akash Sriram and Tiyashi Datta in Bengaluru; Editing by Ramakrishnan M.

A 3D printed Zoom logo is placed between small toy people figures and a keyboard in this illustration taken April 12, 2020. REUTERS/Dado Ruvic/Illustration

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