Eric Yuan, the brains behind Zoom, took the stage at the Concordia Annual Summit in New York on September 25, 2024. During his appearance, Zoom’s stock fell by 4% in after-hours trading on Monday, even after the video conferencing giant posted strong fiscal third-quarter numbers and offered a slightly more optimistic outlook for the upcoming quarter than analysts had anticipated.
To break down Zoom’s performance against expectations from LSEG, the company reported earnings of $1.38 per share, surpassing expectations of $1.31. Revenue hit $1.18 billion, edging out the anticipated $1.16 billion. For the quarter ending on October 31, Zoom saw about a 4% revenue increase year over year. This is a far cry from the explosive growth seen during the height of the pandemic in 2020 and 2021, a period when the company’s size tripled.
Net income climbed to $207.1 million, or 66 cents a share, up from $141.2 million, or 45 cents a share, reported during the same period last year. Zoom also added 800 enterprise clients, bringing the total to 192,400.
Looking ahead, Zoom projected fiscal fourth-quarter earnings adjusted at $1.29 to $1.30 per share, with revenue in the $1.175 billion to $1.180 billion range. This aligns closely with what analysts had predicted—$1.29 per share and a $1.17 billion revenue.
For the fiscal year 2025, Zoom has raised its forecast, now aiming for adjusted earnings between $5.41 and $5.43 per share and revenues ranging from $4.656 billion to $4.661 billion. This middle range suggests a modest 3% growth. In comparison, LSEG analysts had predicted $5.35 per share with $4.64 billion in revenue, a slight uptick from Zoom’s earlier projections made in August of $5.29 to $5.32 per share and $4.63 billion to $4.64 billion in revenue.
The company plans to roll out a premium AI-powered service that integrates with corporate glossaries and platforms like ServiceNow and Workday in the early months of 2025. Additionally, they launched an option for single-use webinars accommodating up to one million attendees.
Despite Monday’s dip, Zoom’s stock has climbed about 24% this year, not far behind the S&P 500’s 25% rise. In another significant development, Zoom announced a rebranding, changing its corporate name from Zoom Video Communications to Zoom Communications Inc. This shift, according to Yuan, signifies the company’s evolution into an AI-driven platform centered on human connectivity and aspirations for sustained growth.
