It's also unclear if Zoom can reduce its dependence on free users to boost its gross margins again. Its strong brand recognition, which has made it synonymous with video calls, could also prevent users from trying out competing services.īut during last quarter's conference call, Zoom CFO Kelly Steckelberg warned that the company's operating margins would continue to contract sequentially as it expands its sales teams and invests in new products like its voice-only Zoom Phone platform and its OnZoom marketplace for online events. However, Zoom could still attract users and companies that don't want to tether themselves to those big tech ecosystems. These big tech rivals can all afford to undercut Zoom's prices. First, Zoom's success is attracting a lot of competitors, including Cisco's ( CSCO -3.01%) Webex, Microsoft's ( MSFT -5.08%) Teams, Facebook's ( META -4.04%) Messenger Rooms, and Alphabet's ( GOOG -2.61%) ( GOOGL -2.70%) Google Meet. Those growth rates are impressive, but Zoom didn't provide any clear guidance for fiscal 2022.Īnalysts expect Zoom's revenue and earnings to rise just 38% and 3%, respectively, next year as the pandemic passes - but investors shouldn't put too much faith in those forecasts, since no one can be sure when the crisis will end. For the full year, it expects its revenue to rise 314% and for its adjusted earnings to surge 726%-731%. Zoom expects its revenue to rise 328%-331% year over year in the fourth quarter as its adjusted earnings grow 413%-427%.
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