Zoom forecasts quarterly profit below estimates amid tough competition

Core Viewpoint - Zoom Communications forecasts quarterly profit below Wall Street estimates, indicating challenges from intense competition and a cautious spending environment [1][2] Company Performance - Shares of Zoom fell nearly 3% in extended trading following the profit forecast [2] - The enterprise business has shown resilience, but the online segment for individual consumers and small businesses remains weak, with fourth-quarter online segment revenue at $489.7 million and a slight increase in churn [3] Competitive Landscape - Zoom faces increasing competition from Microsoft Teams and Google Meet, which are bundled with broader workplace suites, making them more cost-effective for enterprise customers [2] - Despite efforts to diversify offerings, Zoom is experiencing slowing growth as pandemic-driven work-from-home trends decline [2] Financial Outlook - For the first quarter, Zoom expects revenue between $1.22 billion and $1.23 billion, aligning with analysts' average estimate of $1.22 billion [4] - Adjusted profit per share is projected to be between $1.40 and $1.42, below the estimated $1.45 [4] - In the fourth quarter, Zoom reported revenue of $1.25 billion, surpassing estimates of $1.23 billion, but adjusted profit per share was $1.44, below the expected $1.49 [4][5] Investment in Technology - Zoom has launched several AI features to stimulate growth, but investments in this technology may pressure operating margins [4]