Profit, excluding some items, was 99 cents a share. Zoom said sales increased 367% to $777.2 million in the quarter, which ended Oct. Executives said investors should expect similar numbers into the next fiscal year before the gross margin starts to improve. Zoom said the margin decline was due to expenses associated with public cloud services and supporting non-paying users. The company reported adjusted gross margin of 68.2% in the fiscal third quarter, compared with 82.9% in the same period a year earlier and 72.3% in previous period. Investors also may be disappointed by cost issues. Wall Street has fawned over the company for its accelerating sales growth, but analysts have raised questions about how long it might last. Zoom’s stock has jumped sevenfold thus far in 2020, heightening questions about whether the company is overvalued.

Zoom’s projected slowing revenue expansion in the current period highlights investors’ concerns that 2021 won’t be as favorable for the software maker as this year, when the company gained customers forced to work and go to school remotely. The company’s sales guidance, at the high end, estimates a 330% increase from a year earlier - a slight decline in the year-over-year growth from the previous two quarters. Analysts, on average, projected $719 million. Revenue will be as much as $811 million in the period that ends in January, the San Jose, California-based company said Monday in a statement.

Zoom stock price projections