Zoom Execs Brand Q2 Revenue ‘Disappointing’

Zoom disappointed by Q2 revenue reports

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Zoom disappointed with Q2 results
Unified CommunicationsLatest News

Published: August 23, 2022

Ryan Smith

Technology Journalist

Zoom’s revenue results for Q2 of the fiscal year 2023 have been branded “disappointing” by the company’s CFO, Kelly Steckelberg.

The company’s senior team spoke on an earnings call where Zoom confirmed it had a total revenue of $1bn for Q2, up eight per cent year over year.

“In Q2, total revenue grew 8% year over year to $1.099 billion, approximately $16 million below the low end of our quarterly guidance,” she commented.

“A stronger U.S. dollar, which had an impact of approximately $8 million, weaker new Online sales, and to a lesser extent backend linearity in the quarter were the biggest factors contributing to the miss.

“We recognize that the revenue results are disappointing and below our expectations as we navigate the current environment.”

Despite the disappointing revenue made across Q2, Zoom had seen product growth throughout the period, with Zoom Phone being key to the company hitting several milestones.

Steckelberg added: “Our platform strategy is playing out very well and Zoom Rooms and Zoom Phone are critical components of that strategy.

“In fact, Zoom Phone was a real star in Q2, hitting several milestones. The number of customers with 10,000 or more paid seats increased 112% year over year.

“In addition, we broke our record for the largest Zoom Phone deal twice; first with a global retailer, and then with a global bank – both with more than 125,000 seats.

“Deals like these led Zoom Phone to post a record quarter and surpass 4 million seats in August.”

Zoom had only recently surpassed hit three million seats sold worldwide during the first quarter of the fiscal year.

The company also revealed that it now has approximately 204,100 Enterprise customers, with the figure being up 18 per cent from the same quarter last year.

Of those customers, 3,116 are contributing over $100,000 in trailing 12 months revenue, up approximately 37 per cent yearly.

Steckelberg added: “The growth in revenue was primarily driven by strength in our Enterprise business. Revenue from Enterprise customers grew 27% year over year and represented 54% of total revenue, up from 46% a year ago.

“We expect revenue from Enterprise customers to become an increasingly higher percentage of total revenue over time.

“From a product perspective, we had strong growth in Zoom Meetings and Zoom Phone coupled with contributions from Zoom Rooms and other products.”

In Q1, the collaboration vendor saw sales rise 12 per cent year on year to just under $1.1bn, but revenue from larger enterprise customers rocketed 31 per cent.

Enterprise sales accounted for 52 per cent of Zoom’s revenue, with its SMB-focused online business accounting for the rest.

 

 

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