Zoom’s Slowing Growth Shows Puts and Takes of the Connected Economy

In the connected economy, and depending on when you look, growth ebbs and flows, quickens and slows.

Earnings season tends to be a good barometer of sectors and subsets that are benefitting most from the great digital shift — where new behaviors are firmly entrenched, or where there may be a bit of headwind as people get outside and mingle a bit more as economies reopen.

As Zoom Communications reported in its own earnings report on Monday night (Feb. 28) after the close, growth is slowing as the impact of the pandemic lessens a bit.

Now, 21% growth in revenue, as measured year over year (the company logged $1.05 billion in sales in the most recent quarter), is nothing to sneeze at. But looking at the year ahead, company guidance implies 11% growth.

Digging a bit deeper, the firm says that while enterprise sales will be up 20%, the online business, which is what individuals and families use to call one another (you might use it too, for those Sunday confabs with Grandma) will be flat.

Not all that long ago, for instance in the quarter that ended in January of 2021, Zoom’s revenue growth was more than 300%, year over year.

The Slowdown

In the latest earnings results, we see a bit of divergence, which gives a glimpse of how the connected economy operates now. The fact that Zoom’s enterprise business is growing gives a nod to the fact that the hybrid/work-from-home model will continue to be the “new normal” for the 9-to-5, Monday to Friday life. But the flat metrics anticipated for the self-service component signals that people are (in part) feeling a bit more comfortable gathering socially, with new cases of COVID declining at double-digit percentage rates.

It may not be a huge surprise, then, that within the most recent CE100 coverage, we see a bit of gyration in the “work” segment, which was up last week, by a little under 3%, down by nearly 4% in the week before that. But, by way of comparison, the “Live” index soared by a bit more than 4% last week. Very generally speaking, indexes will move in tandem with investor sentiment about underlying firms’ prospects.

Read also: CE100 Index Climbs 2.8% as Block, Mercado Libre Rally

If online video conferencing might be less a staple of how we “live,” socially, we’ve found that it is a critical component of how we get our healthcare.

As relayed in the January Connected Economy monthly report, where we surveyed the sentiments of more than 2,500 consumers, our research shows that 2.1 million more U.S. consumers accessed healthcare products and services online in December than they did just one month earlier. Also, 2.8 million fewer consumers attended in-person medical appointments in December than in November 2021. Roughly 30% of consumers surveyed said that they’d engaged in telemed appointments with healthcare providers.