August 24, 2022: -On Monday, Zoom Video Communications shares decreased nearly 9% in extended trading after the video-calling software “zoom” reduced its full-year forecast for earnings and revenue.

Zoom’s revenue in the second financial quarter increased 8% year over year, decreasing from 12% growth in the previous quarter, according to a statement. Zoom’s net income decreased to $45.7 million in the quarter from $316.9 million in the year-ago quarter as the company surged spending on sales and marketing. The second fiscal quarter ended on July 31.

The strong U.S. dollar, the company’s online business arrangement, and sales weighted toward the end of the quarter negatively impacted revenue in the quarter, Kelly Steckelberg, Zoom’s finance chief, said in the statement.

“We have implemented initiatives concentrated on driving recent online subscriptions, which have shown early promise but were not enough to overcome the macro dynamics in the quarter,” Steckelberg said on a Zoom call with analysts.

In the last quarter, the company said it had 204,100 enterprise customers, which are business units that Zoom’s direct sales teams, resellers, or partners work with. That’s up less than 3% from 198,900 three months earlier. Business customers produce 54% of total revenue. Online business customers are Zoom clients that don’t work directly with Zoom vendors, resellers, or partners.

Concerning guidance, Zoom called for adjusted fiscal third-quarter earnings of 82 cents for each share to 83 cents per share on $1.095 billion to $1.100 billion in revenue. Analysts polled by Refinitiv had been looking for 91 cents in revised earnings per share and $1.15 billion in revenue.

Economic conditions primarily caused executives to revise their views. Management lowered its projections for the 2023 fiscal year, calling for $3.66 to $3.69 in adjusted profits per share and $4.385 billion to $4.395 billion in revenue, meaning 7% growth at the middle of the revenue range. Refinitiv’s analysts had expected $3.76 per share in adjusted earnings and revenue of $4.54 billion. The view three months ago was $3.70 and $3.77 in adjusted earnings per share and revenue, varying from $4.530 billion to $4.550 billion.

The company anticipates the online business to be down 7% to 8% in the full fiscal year, compared with its projection for no change in that part of the business earlier. Steckelberg said that zoom had changed its spending expectations for the second half to prioritize areas with a high recovery on investment, such as analysis and development and sales operations.

Zoom might be able to increase its revenue by being more disciplined about pricing.