Since Zoom doesn't provide specific metrics on customers with less than 10 employees and individual subscribers, it implies that Zoom's growth among its smallest user base has stalled out. Zoom said its net dollar expansion rate was 130% in Q3 among businesses with 10 or more employees, indicating the average client spent 30% more with Zoom than during the same period last autumn. The number of enterprises spending at least $100,000 per year with the video conferencing pioneer increased 94% year over year to 2,507, and customers with at least 10 employees grew 18% to 512,100. The proof is found in Zoom's customer metrics. The Q4 forecast does represent 19% growth over the fourth quarter last year (impressive considering the company grew sales 369% in Q4 last year), but Zoom is losing some steam as many people start to return to the office for work and individual users spend more in-person time with family and friends compared to 2020. Management's outlook for the fourth quarter calls for revenue of $1.051 billion to $1.053 billion, implying flat sequential revenue growth over Q3. Why has the stock continued to tank following such solid news? It all has to do with momentum. Free cash flow was down 3% from a year ago to $375 million (due to limited spending last summer and autumn due to the pandemic), but still represented a very healthy 36% free cash flow profit margin. Zoom said revenue grew 35% year over year to $1.05 billion during the third quarter of fiscal 2022 (the three months ended Oct. A disconnect between share price and reality?
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