Zoom shares drop as it reveals Q2 results

Figures show revenue was $1.10bn, up 8 per cent year over year, but slowing from a 12 per cent rise in the first quarter

Zoom's shares plummeted as it announced its Q2 results that showed revenue growth had slowed.

The video communications giant has published its financial results for the second fiscal quarter ending 31 July in its latest trading update.

Figures show revenue was $1.10bn, up eight per cent year over year, but slowing from a 12 per cent rise in the first quarter.

Zoom's net income also fell to $45.7m from $316.9m in the same quarter last year as the company increased spending on sales and marketing.

Figures from Google show the company's share price dropped 15 per cent to $82.66 in a day after the results were released.

CFO Kelly Steckelberg said revenue was impacted by the strengthening of the US dollar, performance of the online business, "and to a lesser extent sales weighted to the backend of the quarter".

"Consequently, we are now expecting to deliver FY23 revenue in the range of $4.385bn to $4.395bn. We remain focused on operational discipline and continue to expect non-GAAP operating margin of approximately 33 per cent."

Meanwhile, while its enterprise customer count rose 18 per cent year on year in Q2, the pace is slowing with Q1 seeing a 24 per cent increase.

However, Zoom is adding enterprise capabilities such as Zoom Contact Centre and Zoom IQ for Sales to "further expand our market opportunity for future growth and expansion with customers".

Zoom founder and CEO Eric S. Yuan said: "Additionally in Q1, we delivered revenue of over one billion dollars driven by ongoing success in Enterprise, Zoom Rooms, and Zoom Phone, which reached 3 million seats during the quarter.

"We also maintained strong profitability and cash flow, including 17 per cent in GAAP operating margin, approximately 37 per cent non-GAAP operating margin, approximately 49 per cent operating cash flow margin, and over 46 per cent adjusted free cash flow margin."