Zoom stock slips as latest forecasts fail to wow Wall Street

Zoom Video Communications (NASDAQ:ZM) slipped slightly lower as its short-term guidance underwhelmed Wall Street, despite otherwise positive financials.

The remote meeting software firm said that it expected second-quarter sales between $1.145 billion to $1.15 billion, which shaved beneath Wall Street consensus of $1.15 billion.

It predicted earnings of $1.20 to $1.24 per share in the second quarter, which was similarly soft versus prevailing market forecasts pitched at $1.24.

Results for quarter one, meanwhile, impressed with revenue coming in at $1.14 billion, marking a 3% gain compared to the same period last year, whilst net income amounted to $216.3 million for the three months – resulting in $1.35 of earnings per share.

The first quarter exceeded the predictions of Wall Street analysts who forecasted $1.13 billion of revenue and $1.19 of earnings per share.

Like any good tech company in 2024, Zoom had an artificial intelligence story to tell.

Chief executive Eric Yuan highlighted the progress Zoom has made with its software upgrades for enterprise customers into Zoom Workplace, which now embeds AI tools.

“Our AI-powered collaboration platform that provides customers the ability to reimagine teamwork by streamlining communications, increasing employee engagement and improving productivity within their organizations,” Yuan said in a statement.

He added:  “These innovations combined with our execution and focused investment enabled us to outperform our guidance and drive operating cash flow growth of 40.6% and free cash flow growth of 43.6% year over year.”

In New York, during ‘afterhours’ trading, Zoom stock was down around half a percent changing hands at $63.75 each.