The latest decline means shares of the videoconferencing company have lost slightly more than half of their value year to date.
Zoom Video released its fiscal 2023 second-quarter results, for the period ended July 31, at the end of the month and it's clear that growth has continued to slow for the company. Total revenue for the quarter came to $1.1 billion, up just 8% year over year. This growth rate was a far cry from the 54% year-over-year jump in revenue for Q2 2022 and was slower than the 12% year-over-year growth reported in the previous quarter.
It didn't help that Zoom also reported significantly lower profits as the growth in expenses far outpaced the increase in revenue. Operating profit for Q2 fell by 58.7% year over year to $121.7 million while net income plunged 85.6% year over year to $45.7 million, exacerbated by fair value losses on its investments. A bright spot was the continued generation of free cash flow -- $727.3 million for the first six months of fiscal 2023, though this was a fifth lower than the prior year's $909.3 million.
Investors were further disappointed to learn that management revised its full-year 2023 revenue outlook downward. Total revenue is now projected to be in the range of $4.385 billion to $4.395 billion, lower than the previous quarter's guidance of $4.53 billion to $4.55 billion.
The company continues to acquire enterprise customers and managed to chalk up double-digit growth on this front. Enterprise revenue is generally recognized as being more "sticky" and this segment saw revenue jump 27% year over year to $599 million for the quarter. Zoom's enterprise customer base also rose 18% year over year to 204,100.
Meanwhile, Zoom is boosting its contact center capabilities by launching a slate of new features that are meant to open up additional revenue streams for service representatives who can resolve customer problems. Its contact center is also tied in with Zoom Phone, which closed two large deals worth more than 125,000 seats at the end of Q2.
Despite these achievements, it looks as though the videoconferencing platform's growth may slow even further as economies open up and competitors rush in to offer alternative products.