Shares of Zoom Video Communications Inc. gained almost 8% in extended trading today after the company reported financial results that beat Wall Street’s expectations and offered a strong forecast for the coming quarter.

In a press release, Zoom reported fourth-quarter earnings before certain costs such as stock compensation of $1.22 per share, well ahead of the 81-cent-per-share profit expected by analysts. Revenue for the period rose 4% from a year earlier, to $1.12 billion, beating the forecast of $1.10 billion. Even so, Zoom’s revenue gains are way down from a couple of years ago, when the company quadrupled sales at the height of the COVID-19 pandemic, when video calls were in vogue.

The slow revenue growth meant that Zoom posted its first net loss since 2018. It lost $104 million during the quarter, down from a net income of $491 million in the year-ago period. Zoom said the loss was the result of stock-based compensation costs.

In a statement, Zoom founder and Chief Executive Eric Yuan (pictured) said his company’s videoconferencing software was becoming a vital communications and collaboration tool for enterprises during turbulent economic times.

“This was evident in the 27% growth in customers contributing more than $100,000 in trailing-12-months revenue, as well as the 115% trailing-12-month net dollar expansion rate for Enterprise customers,” Yuan said “While the macroeconomic situation continues to negatively impact our overall growth, we have maintained a healthy balance sheet and operating cash flow generation of approximately $1.29 billion.”

Earlier this month, Zoom joined a growing list of technology companies that have been forced to lay off staff in order to cope with the global economic downturn. It cut 15% of its staff because of the “uncertainty of the global economy,” adding that the move would leave the company in better shape to weather the current economic environment.

In a conference call with analysts, Yuan told investors that the company was still dealing with hesitancy among customers, which are looking more closely at deals before agreeing to pay for Zoom’s services. Three months ago, when Yuan first admitted that it was getting tougher to close on deals, he denied that the company was losing out on new business, but said its new contracts were subject to much closer scrutiny than before.

In an effort to make its offerings more enticing, Zoom announced during the quarter that it will soon launch its own email and calendar services, as well as an artificial intelligence-powered chatbot service for customers’ contact centers.

“The once-high-flying Zoom has slowed to a pedestrian growth level and it may also have a cost problem,” said Holger Mueller of Constellation Research Inc. “While revenue is up by $40 million year-over-year, its costs increased by over $400 million, meaning it swung to a loss for the quarter. Eric Yuan and team need to find a way to reignite the growth engines with a compelling vision for the future of work in 2023.”

Looking ahead at fiscal 2023, Zoom indicated that its growth is likely to remain slow. It said it sees full-year revenue of between $4.435 billion to $4.455 billion, which implies growth of just over 1%. Analysts had earlier forecast fiscal 2023 revenue at $4.6 billion. On the other hand, Zoom issued a confident earnings forecast of $4.11 to $4.18 per share, well ahead of Wall Street’s target of $3.66 per share.

For the current quarter, Zoom sees earnings of 96 to 98 cents per share on revenue of $1.08 billion to $1.085 billion. That compares with the consensus estimate of 84 cents per share in profit and $1.11 billion in sales.

Prior to today’s stock move, Zoom’s stock had gained 8% for the year, growing faster than the S&P index, which has risen just 3% over the same period.

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