[Applause] [Music] Well you know what it is a closing bell New York Stock Exchange it was a good Day for Dow Jones stocks are up about 400 points the S P 500 and now Jack also Saw some modest gains they've ticked up Around 1.3 percent for more on all That's happening let's bring in Dan Gallagher he's one of those ears for the Herd on the street column for the Wall Street Journal it's good to have you Here because your latest article looks At the slowing growth of zoom and I'm I'm curious Dan now that most workers Are back in the office What efforts has Zoom been making to try And continue to grow the company or at Least Stave off some of what we would Expect would happen as people go back to In-person Communications Well in a lot of ways Zoom has really Been trying to get back to what they Started as what they started as was a Company that was designed they they Wanted to have a good system for video Conferencing for businesses that's what They were designed to do and then when The pandemic happened everybody Discovered that hey this is a really Easy service to use and they started Using it for everything from you know Zoom thanksgivings and happy hours and Everything else so that part of the
Business really soared and this is a Company that went from less than half a Billion in annual sales to 4 billion in Annual sales unless in something like 18 Months so it was he pulled for it was a Huge it made them a household name but Of course that pulled forward a lot of Growth for that I think it's also been Adapted into so many other Industries I Mean in in education in uh you know the Medical field and Healthcare there's so Many areas where Zoom wasn't a thing and People are able to offer services now Remotely but you know what we have been Seeing over the last several weeks is a Trend of big layoffs in tech companies You know from Twitter of course one Grabbing the most headlines uh to Amazon To meta how has Zoom been affected if at All by these layoffs layoffs across the Industry Well Zoom is affected by layoffs in a Couple ways one is that you know there's Fewer workers you know to come in Obviously to an office and because when You're an Enterprise software business Your business is based on getting what's Called seats seat counts so you get a Big company they pay based on the number Of seats or essentially employees are Going to be using it so if a company Shrinks its employee base that's less Seeds for a company like Zoom I don't Know what kind of business you had with
Those specific companies you mentioned But overall when you have a market where There's a lot of layoffs going on Companies like Zoom tend to see their Addressable Market you know get hit and So their growth slows naturally but They're just to be clear their employees Have not been hit mean Zoom as a company Has not had to lay off employees quite Yet They haven't they haven't done that yet They haven't really signaled they have They're in a they're in kind of a Different state I mean they're still a Very profitable business but they're Trying to invest in getting more big Businesses to sign on so they're Invested in r d investing in in their Sales force so they're they're not Trying to cut that back but what that Does do is that raises their expenses And their profit margins shrink at this Time that their growth is also shrinking A lot because it has those difficult Comparisons you know Dan I'm struck by As we're talking about the next stage of Communications your background Blackboard and chalk writing behind you You know sort of the contrast of those I'm wondering when we're looking forward To what Zoom might become what they Might be researching when we're looking At a future of communications what do You expect from the company in the long
Term Well I expect Zoom is going to be around A long time you know I think people Forget that they they did make something That was really a much easier to use Service for video conferencing I think They did that very well and that and Their success is a sign of that Um you know but they are facing a lot of Competition now Microsoft and Google Especially have services like this that They bundle with other things what Zoom Is really trying to get business Customers to buy into is this hybrid Approach where people aren't in the Office all the time but they're in there Some of the time so you want to have you Know rooms and technology so that people Can have meetings where somewhere there And some aren't there Um that's that's their Vision but that Takes off you know especially I mean This what we see as a potential Recession is really bad timing for them Because they're really trying to grow This at a time when companies overall Need to kind of shrink their spending so I think that's just going to happen Slower for them all right and the poem Back there wild geese We're captivated by it I'm captivated by the point behind you We'll look it up Dan Gallagher thank you Thank you thank you for having me
