Zoom Revenue Growth Slows to Single Digits

Zoom announced that it earned a net income of $141.2 million on revenues of $1.14 billion in the quarter ending October 31, 2023. But sales growth at the pandemic-era darling has slowed dramatically, with revenues growing just 3.2 percent year-over-year (YOY). That said, growth was above expectations.

“In Q3, revenue came in ahead of guidance as we bolstered Zoom’s all-in-one intelligent collaboration platform with advanced new capabilities like Zoom AI Companion and continued to evolve our customer and employee engagement solutions,” Zoom founder and CEO Eric S. Yuan said. “We are also pleased with our Online business where we drove higher retention and saw usage of our new AI capabilities, enhancing the value of our platform.”

Zoom says that it had about 7 million paid Zoom Phone seats in the quarter and approximately 219,700 enterprise customers, the latter of which is up 5 percent YOY. The firm now has a cash balance of $6.5 billion—thanks, COVID!—which should help it fund its next era of growth in businesses. AI is, of course, key to this growth: Zoom introduced a Zoom AI Companion to its paid plans this past quarter that’s now enabled on over 220,000 accounts and has summarized over 2.8 million meetings.

Though Zoom expects growth of just 3 percent in the current quarter, it increased its full-year outlook for revenue and free cash flow, the latter of which it expects to grow about 13 percent YOY.