Zoom Video Communications reported strong fiscal third-quarter results, surpassing analysts’ expectations for both earnings and revenue. However, the video conferencing giant’s stock fell by 4% in after-hours trading on Monday, as the company issued quarterly guidance that was slightly above but still within the range of market expectations.
For the quarter ending October 31, Zoom posted earnings of $1.38 per share on an adjusted basis, surpassing the expected $1.31 per share. The company’s revenue reached $1.18 billion, slightly exceeding the anticipated $1.16 billion. Despite these positive results, Zoom’s revenue growth of 4% year-over-year represents a continued slowdown for the company, which experienced explosive growth in 2020 and 2021 during the COVID-19 pandemic.
Net income for the quarter was $207.1 million, or 66 cents per share, marking an increase from $141.2 million, or 45 cents per share, in the same quarter last year. The company also reported an increase in its enterprise customers, reaching 192,400, an 800-customer growth from the previous quarter.
Looking ahead, Zoom forecast fiscal fourth-quarter adjusted earnings per share in the range of $1.29 to $1.30, with revenue expected to be between $1.175 billion and $1.180 billion. Analysts had projected earnings of $1.29 per share and revenue of $1.17 billion. For the 2025 fiscal year, Zoom raised its guidance, forecasting adjusted earnings per share of $5.41 to $5.43 and revenue between $4.656 billion and $4.661 billion. This revised outlook implies about 3% revenue growth, which is modest compared to the rapid expansion the company saw during the pandemic years.
Zoom also announced the upcoming release of a premium “Custom AI Companion” designed to integrate with corporate systems such as ServiceNow and Workday. Additionally, the company introduced single-use webinar options with a capacity of up to one million attendees.
Zoom’s stock has seen a 24% increase this year, although it still lags slightly behind the broader market, with the S&P 500 index gaining 25%. Reflecting its shift toward becoming an AI-focused platform, Zoom also announced that it would be changing its corporate name from Zoom Video Communications to Zoom Communications Inc.
The company’s CEO, Eric Yuan, emphasized that the rebranding aligns with Zoom’s strategy to evolve into an AI-first platform for human connection, positioning itself for long-term growth.
