Eric Yuan, founder and CEO of Zoom Video Communications, speaks at Concordia Annual Summit in New York on Sept. 25, 2024.
- Zoom had more profit and revenue than analysts had expected in the October quarter, and executives pushed up the company's full-year forecast.
- The company started selling options for single-use webinars during the quarter.
- The company also said its corporate name is changing from Zoom Video Communications to Zoom Communications Inc.
Zoom shares were down 4% in extended trading on Monday after the video calling software maker announced strong fiscal third-quarter results and gave quarterly guidance that was just slightly above expectations.
Here's how the company did in comparison with LSEG consensus:
- Earnings per share: $1.38 adjusted vs. $1.31 expected
- Revenue: $1.18 billion vs. $1.16 billion expected
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Zoom's revenue grew about 4% year over year in the quarter, which ended on Oct. 31, according to a statement. Zoom has increased revenue in the single digits for two and a half years, a sharp departure from 2020 and 2021, when the Covid-19 pandemic led the business to triple in size.
Net income, at $207.1 million, or 66 cents per share, was up from $141.2 million, or 45 cents per share, in the same quarter a year earlier.
The company reported 192,400 enterprise customers in the quarter, up 800 customers from the previous quarter.
Money Report
With respect to guidance, Zoom called for $1.29 to $1.30 in fiscal fourth-quarter adjusted earnings per share on $1.175 billion to $1.180 billion in revenue. Analysts surveyed by LSEG were expecting $1.29 per share and $1.17 billion in revenue.
Zoom bumped up its view for the 2025 fiscal year. It expects $5.41 to $5.43 in adjusted earnings per share, with $4.656 billion to $4.661 billion in revenue. The middle of the revenue range implies about 3% growth.
LSEG's consensus was $5.35 per share on revenue of $4.64 billion. In August, Zoom said it was looking for $5.29 to $5.32 per share and revenue between $4.63 billion and $4.64 billion.
During the quarter, Zoom said in the first half of 2025 it will release a premium Custom AI Companion that could connect to corporate glossaries and services such as ServiceNow and Workday. Zoom also started offering single-use webinar options, with room for up to one million attendees.
As of Monday's close, Zoom stock was up about 24% this year, while the S&P 500 index had gained 25%.
The company also said its corporate name is changing from Zoom Video Communications to Zoom Communications Inc.
"This change reflects our evolution into an AI-first work platform for human connection and our vision for long-term growth," Zoom's founder and CEO Eric Yuan said on a conference call with analysts.
WATCH: Zoom deserves another look from investors despite its weak growth, says MAI Capital's Chris Grisanti
