Dive Brief:

• Zoom Video Communications Inc.’s CFO said Monday the company is anticipating revenue growth in the coming fiscal year after a period of “solid” results, as it also braces for the potential impact of macroeconomic headwinds. 

• The San Jose, Calif.-based online video conferencing giant reported total revenue of about $1.1 billion for the fourth quarter of its 2023 fiscal year period ending Jan. 31, 2023, up 4% year over year.

• The company’s total revenue for the fiscal year reached $4.3 billion, up 7% year over year. The fiscal 2024 total is expected to be between $4.4 billion and $4.5 billion.

Dive Insight:

The company’s revenue growth was primarily driven by strength in its enterprise business, which grew 18% year-over-year and represented 57% of total revenue, up from 50% a year ago, according to Zoom CFO Kelly Steckelberg.

“While we think we are incredibly well positioned with our total cost of ownership and the value that we bring to our customers, everybody is being very cautious until there's better visibility about the potential of a recession or not,” Steckelberg said during a Monday earnings call. “And we expect that could impact us at least through the rest of this year.”

The company’s Americas revenue grew 10% year-over-year, according to Steckelberg. However, revenue for the Europe, Middle East and Africa business continues to be impacted by the “stronger dollar, macro headwinds and online performance, which combined led to a decline of 9% year-over-year,” she said. Asia Pacific revenue, which was also impacted by the stronger dollar, declined 5% year-over-year.

Zoom founder and CEO Eric Yuan said the last fiscal year has been a pivotal period in the company’s evolution into a full collaboration platform. Among other milestones, the company closed out the period with the rollout of “Zoom Virtual Agent,” an intelligent conversational AI and chatbot service that could transform the way businesses assist their customers and employees, he said.

Still, the year was not without its challenges, according to the CEO.

“We experienced headwinds in terms of currency impact, online contraction, and deal scrutiny which continued into Q4,” he said. “And a few weeks ago, we made the very tough but necessary decision to reduce our team by 15% and say goodbye to around 1,300 hardworking, talented Zoom colleagues.”