Zoom Video Communications, Inc. (ZM) is enjoying a positive market reaction after releasing impressive second-quarter financial results. The company’s earnings per share reached $1.39, surpassing the analyst consensus estimate of $1.21 by a significant 14.88%. Revenue for the quarter also exceeded expectations, coming in at $1.16 billion, representing a 2.09% increase from the same period last year.
Zoom’s report highlights strong performance in both its Enterprise and Online segments. Enterprise revenue, which comprises revenue generated from larger businesses, grew by 3.5% year-over-year to reach $682.8 million. While Online revenue, derived from individual users, remained flat year-over-year at $479.7 million.
Eric S. Yuan, Zoom’s CEO, expressed satisfaction with the company’s performance, emphasizing the growth in operating cash flow and free cash flow, indicating efficient and sustainable growth. He also highlighted the positive trend in large accounts, with customers generating over $100,000 in trailing 12 months revenue increasing by 7.1% year-over-year. Notably, Zoom’s Online business demonstrated resilience, with average monthly churn reaching its lowest ever rate.
Looking ahead, Zoom anticipates continued growth. The company projects third-quarter earnings per share between $1.29 and $1.31, exceeding the consensus estimate of $1.24. Revenue is expected to fall within a range of $1.16 billion to $1.165 billion, also surpassing the estimated $1.16 billion. For fiscal year 2025, Zoom forecasts earnings per share of between $5.29 and $5.32, beating the current estimate of $5.05. Full-year revenue is projected to be between $4.63 billion and $4.64 billion, outperforming the estimated $4.62 billion.
Following the positive news, Zoom Video Communications shares are currently up 1.03% in after-hours trading, reaching $60.85 at the time of writing. These strong results and optimistic outlook solidify Zoom’s position as a leader in the video communication and conferencing industry, suggesting a promising future for the company.
