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Zoom Boosts Annual Revenue Forecast as AI Features Drive Demand

Updated: Jan 5

Zoom Video Communications has raised its annual revenue and profit forecasts, citing the integration of artificial intelligence (AI) technology into its products and the growing trend of hybrid work.

Zoom
Credit: Bloomberg

The COVID-19 pandemic led to the widespread adoption of platforms like Zoom, Microsoft Teams and Cisco Webex, which have continued to experience strong demand as businesses shift to hybrid work models.


The company now expects its annual adjusted profit per share to be between $4.93 and $4.95, surpassing its previous forecast of $4.63 to $4.67. Additionally, Zoom has raised its full-year revenue forecast to a range of $4.506 billion to $4.511 billion, up from $4.485 billion to $4.495 billion.


CEO Eric Yuan highlighted the company's efforts to enhance its collaboration platform with advanced capabilities such as the Zoom AI Companion. This feature, introduced in the third quarter, provides paid users with access to meeting summaries, catch-ups and email and chat prompts. Over 220,000 accounts have already enabled this feature.


Zoom's quarterly free cash flow also saw significant growth, increasing by 66.2% to $453.2 million. The company expects its full-year free cash flow to be between $1.34 billion and $1.35 billion.


Analysts have expressed optimism about Zoom's performance, particularly in its Phone and Contact Center segments. RBC analyst Rishi Jaluria noted that the growth in these areas gives confidence that Zoom's growth will accelerate in the near term. The Phone segment now has approximately 7 million paid seats, while the Contact Center has reached around 700 customers.


Looking ahead, Zoom's current-quarter revenue is expected to be in line with expectations, ranging between $1.125 billion and $1.130 billion.

 
  • Zoom Video Communications has raised its annual revenue and profit forecasts.

  • The integration of AI technology into Zoom's products and the shift to hybrid work models have contributed to the increased demand.

  • The company now expects its annual adjusted profit per share to be between $4.93 and $4.95.

Source: REUTERS

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