Originally Zoom Video, Zoom Communications (ZM, Financials) announced third-quarter profits and income above forecasts; shares dropped 2% in Monday after-hours trading, and the stock is down a further 7.4% in early morning trading, changing hands for $82.46.
With an adjusted profit of $1.38 per share for the quarter ending October 31 more than the average projection of $1.31. Revenue surpassed the projected $1.16 billion up 3.6% year over year to $1.18 billion. Online sales were $478.5 million; company income came in at $698.9 million.
Looking forward, Zoom forecasts fourth-quarter adjusted earnings between $1.29 and $1.30 per share, considerably above the expected $1.28. The expected income ranges from $1.175 billion to $1.18 billion; the middle figure surpasses the $1.17 billion projection.
From the prior range of $4.63 billion to $4.64 billion, Zoom raised its revenue outlook for fiscal year 2025 to between $4.656 billion and $4.61 billion, therefore topping the consensus estimate of $4.64 billion.
The company recently raised its share repurchase program by $1.2 billion, therefore increasing the total permitted to over $2 billion.
Reflecting its evolution as an AI-first company, Zoom said in a calculated action that it is changing its name from Zoom Video Communications. CEO Eric Yuan claims that the AI Companion for the company aims to reduce time spent on less critical tasks, thereby maybe permitting a four-day workweek.
Although the financial results were strong, shares decreased because to concerns about profit margins, which slightly declined from 39.3% the year before to 38.9% from continued spending in artificial intelligence and product development.
