What’s Going On Here?Zoom announced a bleak outlook for 2022 earlier this week, just as demand for acceptable office attire boomed among the teleconferencing company’s customers. What Does This Mean?Office workers might’ve gotten used to only showing their torsos on a 3x3 inch video chat window, but that changed last quarter when the Great Office Return began in earnest. This is the moment Zoom’s been dreading, and with good reason: the number of business customers with 10-plus employees fell last quarter from the one before. And since big business customers are a key driver of revenue, that could be why Zoom’s total sales came in just 21% higher last quarter than the same time the previous year – a huge drop from the previous quarter’s 35%. The company topped it all off with a weaker-than-expected revenue outlook for both this quarter and 2022 as a whole, and its shares cratered 13%. Why Should I Care?For markets: If in doubt, bribery.
Investors have been worried about Zoom’s future for a while now, making the case – clearly a pretty accurate one – that growth would slow dramatically when offices started opening up again. That might be why its stock price has now fallen over 75% from its peak in October 2020. Still, Zoom is trying to put their minds at ease: the company announced plans to buy back $1 billion worth of its own shares, which will reduce the supply of those in circulation and should increase the price of those left over.
The bigger picture: Zoom’s branching out.
Zoom had planned to offset some of this slowdown in growth by buying customer support software provider Five9 last year, but the deal fell through. So now it’s going it alone, launching its own rival online customer support center platform last week. That could be a wise move: the so-called “global contact center software” market is predicted to be worth $150 billion by 2030 – up from $24 billion last year. | 