Zoom Video Communications late Monday beat expectations for its fiscal third quarter, but offered mixed guidance for the current period. Still, ZM stock rose in extended trading.
The San Jose, Calif.-based company earned an adjusted $1.29 a share on sales of $1.14 billion in the quarter ended Oct. 31. Analysts polled by FactSet had expected Zoom earnings of $1.09 a share on sales of $1.12 billion. On a year-over-year basis, Zoom earnings rose 21% while sales increased just 3%.
For the current quarter, Zoom predicted adjusted earnings of $1.14 a share on sales of $1.13 billion. That's based on the midpoint of its guidance. Analysts had been looking for earnings of $1.09 a share on sales of $1.13 billion in the fiscal fourth quarter. In the year-earlier period, Zoom earned $1.22 a share on sales of $1.12 billion.
"In Q3, revenue came in ahead of guidance as we bolstered Zoom's all-in-one intelligent collaboration platform with advanced new capabilities like Zoom AI Companion and continued to evolve our customer and employee engagement solutions," Chief Executive Eric Yuan said in a news release.
ZM Stock Rises After Report
In after-hours trading on the stock market today. ZM stock climbed a fraction to 66.44. During the regular session Monday, ZM stock rose 2.9% to close at 66.
Zoom closed its fiscal third quarter with 219,700 enterprise customers, up 5% from the same period last year.
Also, Zoom reported 3,731 customers contributing more than $100,000 in trailing 12 months' revenue, up 13.5% year over year.
Lately, Zoom has been adding more productivity and artificial intelligence tools to its business communications platform.
On Sept. 5, it introduced Zoom AI Companion, a generative AI digital assistant. As of Oct. 30, the tool had generated more than 1 million meeting summaries.
Next year, Zoom plans to release Zoom Docs, an AI-powered workspace that can be used for documentation, project tracking and management tasks.
Zoom competes with Microsoft's Teams application as well as products from Alphabet's Google, Cisco Systems and RingCentral.
Zoom Stock Has Flatlined
ZM stock has flatlined this year amid sluggish sales growth. Year to date, through Monday's close, Zoom stock is down 2.6%.
However, Zoom has been in a consolidation pattern for the past 10 weeks with a buy point of 75.91, according to IBD MarketSmith charts.
Zoom shares hit a record high of 588.84 in October 2020 during the Covid pandemic. The videoconferencing specialist saw usage surge during the work-from-home and school-at-home boom spurred by the health crisis.
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