Yesterday Zoom reported its slowest ever quarter of revenue growth, with sales rising just 8% in the last year for their Q2 as the company struggles to convert its user base into paying customers.
Like a team member stuck on mute, Zoom has been touting its progress on both the enterprise and consumer side, but investors haven't been listening. Stricter time limits for users on the free tier haven't pushed enough new customers to Zoom's online segment, which translated into a 9% fall in revenue in that division, the second consecutive quarter of decline.
The struggling online segment, combined with a deceleration in the enterprise side of the business, got investors concerned, sending Zoom's share price down another 16% yesterday. That leaves the company's market cap at less than $25bn. That's a fraction (less than one-sixth) of what the business was worth at the height of Zoom-mania when its valuation was comparable to some of the largest telecom and communications companies in the country, like Comcast, AT&T and T-Mobile.
Although the company's share price chart in the last 22 months is the stuff of CEO nightmares, Zoom remains a cash-flow-machine, generating another $500m+ from its operations in the second quarter. An increasing amount of that income might need to be spent on marketing if the company wants to grow its way out of this slump.