Pandemic darling Zoom continues to struggle as its annual revenue growth and net income dropped in second quarter of the fiscal year 2023.

Zoom enjoyed skyrocketing revenue and user numbers during the Covid-19 crisis. Social restrictions imposed by governments to halt the spread of the contagion forced people to work from home. That, in turn, meant an upswing for companies like Zoom that provided remote working services.

With social distancing rules having eased across the board, the demand for the video-conferencing platform has cooled off from its pandemic highs. At the same time, Zoom is also facing stiff competition from Microsoft Teams and Cisco WebEx, reported Reuters.

Zoom’s achieved a revenue of $1.09bn in the second quarter of the fiscal year 2023. In the same time, its revenue growth dropped to 8%. This was the slowest quarterly revenue growth on record for the platform. It was a decrease from the 12% reported in the prior quarter.

“[Our] revenue was impacted by the strengthening of the US dollar, performance of the online business, and to a lesser extent sales weighted to the backend of the quarter,” Kelly Steckelberg, CFO at Zoom, said a statement.

“Consequently, we are now expecting to deliver FY23 revenue in the range of $4.385bn to $4.395bn. We remain focused on operational discipline, and continue to expect non-GAAP operating margin of approximately 33%.”

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By GlobalData

The video conference platform now expects third quarter revenue to total between $1.09bn and $1.10bn.

Zoom’s net income fell to $45.7m in the quarter from $316.9m in the year-ago quarter

CNBC reported that Greg Tomb, Zoom president, claimed Zoom had been too nice in the past

“I think we’re a little too nice in how we sell our product from a discounting perspective, right?” Tomb said on a call with analysts. “So I think we’ve got the ability to be a little smarter about how we price and discount our products.”

However, founder and CEO Eric S. Yuan said that businesses are still drawn to its service because of Zoom’s innovation and modern architecture.

“Our recently launched Zoom Contact Center and Zoom IQ for Sales products saw some great early wins,” Yuan said in a statement. “While Zoom Phone delivered milestone results, hitting a record number of licenses sold in the quarter and reaching nearly four million seats, up more than 100% year over year.”

GlobalData is the parent company of Verdict and its sister publications.