Zoom has lowered its 2023 annual revenue expectations by $15 million as online business is forecast to drop 8% over the same period.
Revenue for 2023 is now expected to be between $4.37 billion and $4.38 billion, representing around 7% year-over-year growth. In monetary terms, this translates to $15 million dollars lower than its previous full-year guidance.
Zoom attributes $14 million of this forecast loss to the “continued FX (foreign exchange) pressure in Q3 and Q4”.
Eric Yuan, Founder and Chief Executive Officer of Zoom, said: “Zoom is purpose-built to make all kinds of connections possible, effective, and meaningful.
“We have developed and launched more than 1,500 features and enhancements on the Zoom platform this year, advancing how people connect with each other, their organization, and their customers, ultimately, opening the doors wide for creativity and collaboration.
“Of course, even as we celebrate our innovations and customers, we still face the backdrop of a challenging macroeconomic environment.
“We continue to see FX pressure and heightened deal scrutiny for new business but remain focused on delivering happiness to our customers by innovating our platform and expanding our go-to-market capabilities.”
Zoom’s total Q3 2022 revenue, however, was $1.102 billion, which is an increase of 5% year over year and $2 million above the high end of its quarterly guidance.
The increased revenue for Q3 was mainly the result of growth in its enterprise business, which grew 20% year over year. Enterprise business accounted for 56% of the company’s total revenue, up 7% from last year. Zoom expects enterprise customers to make up an increasingly higher percentage of its total revenue going forwards.
Zoom also saw strong growth in Zoom Phone, Zoom Rooms, and other products. This quarter, Zoom Phone added 5,500 seats and 650 Zoom Contact Center seats.
Zoom Phone added nine customers in the quarter who purchased more than 10,000 total seats. Now Zoom Phone has 64 customers who have purchased more than 10,000 seats. Kelly Steckelberg, Chief Financial Officer at Zoom, believes these figures show a “continued strength, even in the challenging economic times”. Steckelberg promised to provide a fuller Zoom Phone adoption breakdown when it reaches 10% of revenue.
In July, Zoom Phone surpassed three million seats sold globally. At the last quarterly earnings call, Zoom announced it had gained more than four million seats on Zoom Phone.
On a regional level, Zoom’s revenue across the Americas grew 11% year over year. EMEA revenue declined by 9% year over year, which Zoom says is due to a stronger dollar, online performance, and the Russia-Ukraine war. APAC’s revenue has fallen 3% year over year, which has also reportedly been impacted by the stronger dollar.
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In terms of profitability, Zoom’s non-GAAP margin in Q3 was 79.5%, up 3.5% from the same time last year. Zoom attributes this increase to optimising usage across the public cloud and having more co-located data centres.
