Zoom reports strong sales in bright sign for new products

NEW YORK – Zoom Communications reported quarterly revenue that topped analysts’ estimates, a sign of strength for the software maker’s expanded suite of business tools.

Fiscal third-quarter sales increased 4.4 per cent to US$1.23 billion (S$160.4 billion), Zoom said on Nov 24 in a statement. Profit, excluding some items, was US$1.52 a share. Analysts, on average, estimated earnings of US$1.44 a share on revenue of US$1.21 billion, according to data compiled by Bloomberg.

Zoom, the maker of a popular videoconferencing tool, is pushing a broader range of products, including corporate phone systems and contact centre software.

At its annual conference in September, the company unveiled the latest version of its artificial intelligence (AI) assistant, which includes the ability to design custom AI tools for US$12 per month.

“This quarter we announced AI Companion 3.0, and we’re thrilled to see AI Companion adoption grow meaningfully,” chief executive Eric Yuan said in the statement.

“We’re also seeing strong momentum with Custom AI Companion and our AI‑first Customer Experience suite.”

The shares gained about 4 per cent in extended trading after closing on Nov 24 at US$78.60 in New York. The stock has declined 3.7 per cent in 2025 amid broader market anxiety towards application software.

Enterprise revenue increased 6.1 per cent to US$741.4 million, compared with analysts’ average estimate of US$731.6 million. Zoom said it had 4,363 customers in the period who contributed more than US$100,000 each over the past year.

Average monthly churn among individuals and small businesses in the quarter was 2.7 per cent, down from 2.9 per cent in the prior quarter. As the world reopened from pandemic restrictions, many of these casual users have let their Zoom licences lapse. 

“We’ve made progress improving top-line growth with sustained best-in-class profitability, and we’ve reduced dilution,” chief financial officer Michelle Chang said during a conference call with analysts after the results were released.

Zoom also increased its total share repurchase authorisation by US$1 billion.

In the current period, revenue will be about US$1.23 billion, the San Jose, California-based company said.

Profit, excluding some items, will be about US$1.49 a share. Analysts, on average, projected sales of US$1.23 billion and adjusted earnings of US$1.45 a share. 

The company’s enterprise business “continues to be a key point of strength”, wrote Mr Rishi Jaluria, an analyst at RBC Capital Markets.

Important areas of interest to investors are traction for the company’s new AI companion tool, stabilisation of churn in casual users and expected long-term margins, he added. BLOOMBERG