Zoom Video Communications raised its fiscal 2025 revenue and adjusted profit forecast on Monday, citing robust demand for its online video conferencing software as companies increasingly adopt hybrid working models.
The company also announced a $1.2 billion expansion of its share repurchase program.
Despite a positive earnings outlook, Zoom’s shares dipped approximately 3% in after-hours trading, following a 3.5% gain during the regular trading session. Michael Ashley Schulman, Chief Investment Officer at Running Point Capital, suggested that traders were likely taking profits ahead of the shortened Thanksgiving holiday week.
For the upcoming fiscal year, Zoom now expects revenue in the range of $4.65 billion to $4.66 billion, up from its previous forecast of $4.63 billion to $4.64 billion. The company also raised its full-year adjusted earnings per share forecast to a range of $5.41 to $5.43, compared with the prior range of $5.29 to $5.32.
Zoom’s core online meeting services continue to see strong demand, particularly from large enterprise clients. As hybrid work models become more widespread, Zoom’s integration of artificial intelligence has helped solidify its role as a key tool for businesses.
However, the company faces intense competition from rivals, including Microsoft Teams and Cisco’s Webex, as they all vie for market share in the crowded video conferencing space.
In the third quarter, Zoom reported revenue of $1.18 billion, surpassing analysts’ expectations of $1.16 billion, according to data compiled by LSEG. Adjusted earnings per share for the quarter were $1.38, beating estimates of $1.31.
Enterprise revenue grew 6% and now represents 59% of the company’s total revenue, underscoring Zoom’s strategic shift toward an enterprise-focused customer base, as noted by newly appointed Chief Financial Officer Michelle Chang.
