Zoom Communications Q3 Earnings: Revenue Beat, EPS Beat, Online Churn Hits All-Time …
Zoom Communications had quite a successful third quarter, with some impressive financials to show for it. Revenue reached $1.18 billion, surpassing the expected $1.16 billion. The adjusted earnings per share came in at $1.38, beating the estimated $1.31.
Zoom has managed to exceed analyst expectations for both top and bottom lines consistently over the last nine quarters, a commendable track record by industry standards. In terms of revenue, there was a 3.6% increase year-over-year, with enterprise revenue up by 5.8%, while online revenue remained flat. What stood out was the significant drop in online monthly churn, hitting an all-time low of 2.7% in the quarter.
In cash operations, Zoom reported $483.2 million provided by operating activities, down 2% from the previous year, and free cash flow at $457.7 million, up 1% year-over-year. The company’s enterprise customer base grew to approximately 192,400, with 3,995 of them contributing over $100,000 in revenue over the trailing 12 months.
Ending the quarter with $7.7 billion in cash, cash equivalents, and marketable securities, Zoom’s board approved an additional $1.2 billion for stock repurchase in November, leaving $2 billion available for buybacks.
Looking ahead, Zoom forecasts fourth-quarter revenue to range from $1.175 billion to $1.18 billion, with adjusted earnings between $1.29 and $1.30 per share. For the full year, revenue expectations are set between $4.656 billion and $4.661 billion, with anticipated earnings per share from $5.41 to $5.43, painting a positive outlook for the company.
CEO Eric Yuan highlighted significant milestones like AI Companion 2.0 and industry-specific AI customization during Zoomtopia, emphasizing the company’s commitment to innovation and customer empowerment. In a symbolic move, the company rebranded from Zoom Video Communications to Zoom Communications.
After-hours trading saw Zoom shares decline by 2.31%, costing $86.97 at publication time. Despite this, Zoom’s financial results portray a company poised for sustainable growth and positive market sentiment moving forward.
