Dive Brief:
- San Jose, Calif.-based Zoom raised its full-year forecasts for revenue and profit to be in the range of $4.465 billion to 4.485 billion as its online business “stabilizes,” CFO Kelly Steckelberg said in the company’s first quarter earnings call Tuesday.
- The video communications service saw major growth in the wake of the COVID-19 pandemic, as lockdown restrictions made remote and hybrid work environments the norm. But a slowing business environment led the tech giant to cut around 1,300 employees in February, while also terminating President Greg Tomb in March “without cause,” according to a filing with the Securities and Exchange Commission.
- “As expected, we did experience some distraction across the global sales team due to the previously announced headcount reduction and subsequent sales reorganization,” Steckelberg said in the earnings call.
Dive Insight:
Along with lifting forecasts despite slowing growth, Zoom CEO Eric Yuan outlined the company’s strategy when it comes to further investment in generative AI.
“It looks like everyone seems to have just woken up to AI. Actually, we have been busy on the AI front for a few years,” he told investors on the call. “We also have an AI team as well because we understand the importance of AI, and in particular, recently with the generative AI momentum,” he said.
Company executives explained that they are looking at the use of generative AI from a user perspective. Recently, the company announced a collaboration with OpenAI, creator of the popular ChatGPT AI tool, as well as a partnership with Anthropic, an AI safety and research company that's working to build reliable models.
“On the one hand, we leverage AI to look at almost every feature we have to empower and elevate the customer and the product experience, and at the same time, there are a lot of monetization opportunities,” said Yuan.
Zoom reported a total revenue of $1.1 billion for the quarter ending April 30, up 3% year-over-year, with online revenue falling 8% to $473.4 million for the quarter ending April 30.
“We are pleased that this part of our business is stabilizing sooner than expected,” said Steckelberg.
