Video conferencing company Zoom is pinning its growth plans to investments in AI after reporting its first fourth-quarter net loss since 2018.
Report Results On Monday, Zoom said it posted a net loss of $104 million for the fourth quarter of fiscal 2023, ending Jan. 31, compared to a profit of $490 million in the same period last year. Online sales also fell 10% year over year to $481.7 million.
The loss was largely due to share-based compensation costs. Otherwise, Zoom posted total revenue of $1.1 billion in Q4, up 4% year-over-year, with total revenue for fiscal year 2022 reported as $4.4 billion, up 7% year-over-year.
In addition, fourth-quarter revenue from business customers increased 18% year over year to $636.1 million, and full fiscal year operating revenue increased 24% year over year to $2.4 billion.
While the results were largely positive on balance, they are a far cry from the staggering growth the company experienced during the pandemic and reflect some of the challenges the technology sector is currently facing.
Earlier this month, Zoom announced it would cut 1,300 jobs, about 15% of its workforce.
Alluding to this during a call with analysts after the results were announced, the company’s CFO, Kelly Steckelberg, said that “we are restructuring to really focus resources on our corporate customers and be as efficient as possible in our commercial and small business teams.”
During the same call, CEO Eric Yuan described the cuts as a “painful exercise” but said the decision allowed the company to reset to weather the economic climate.
The company has seen some contraction in the number of Zoom seats purchased by customers, as organizations around the world continue to look for ways to tighten their budgets, Yuan said. Zoom has also faced headwinds in terms of currency impact, online downsizing and deal checking that continued into the company’s fourth quarter, Yuan added.
Despite the slowdown, Yuan seemed optimistic about the company’s direction as it entered the next fiscal year.
Following recent announcements from both Microsoft and Google about their investments in Chat GPT and Bard, respectively, Yuan noted that “the era of AI and large language models has arrived” and that Zoom wants its customers to take advantage of the technology.
Commenting on the company’s 2024 fiscal strategy, Yuan said Zoom will seek to “redefine teamwork” by “offering new immersive experiences that enhance employee engagement and modern collaboration tools for ideation across locations and modes.”
He also said that by embedding AI into more workflows, Zoom can help users work smarter, noting that AI-backed features currently available on the Zoom platform, such as translation, captioning, and editing tools summarizing meetings are just the beginning. .
“It all comes together as a collaborative platform that unites people to unlock their potential, enables more dynamic and intelligent experiences, and allows us to reinvent productivity and work,” said Yuan.
In February, Microsoft released a new Premium version of its Teams collaboration platform, which will be supported by the large ChatGPT language model.
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