Most companies would be popping the bubbly and doing cartwheels after revenue quadrupled a second straight quarter, but Zoom Video Communications Inc.’s executives were explaining to analysts why its stock was in freefall.
Gross margins, at 66.7% and declining, remain under pressure for the foreseeable future amid a surge in free users and escalating public-cloud service costs, Zoom Chief Financial Officer Kelly Steckelberg said in reply to one of at least four questions about operating margins during a conference call with analysts late Monday, following Zoom’s third-quarter results.
“We estimate that average revenue per customer for this cohort declined by roughly 10% sequentially in the quarter,” Suri wrote in a note Tuesday. The metric had already declined significantly in the first quarter of fiscal 2021, he added, as Zoom gained an influx of new customers during the pandemic.
Another factor clouding Zoom’s immediate future is the anticipated delivery of vaccines from Pfizer Inc. PFE, +2.87% and Moderna Inc. MRNA, -7.68% in 2021, which could free Americans to possibly return to work. Oppenheimer analyst Ittai Kidron openly wondered in a Tuesday note “where growth levels ultimately settle in a post-pandemic environment with tougher [year-over-year competition] in the second half of fiscal 2022.
horrible
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