Zoom Delivers Robust Revenue, Signaling Momentum for Its Broader Product Suite

Zoom Communications Inc. delivered quarterly results that surpassed Wall Street expectations, offering investors a reassuring signal that the company’s broadened software portfolio is gaining traction.

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For its fiscal third quarter, Zoom posted revenue of $1.23 billion, a 4.4% increase from a year earlier, the company said Monday. Adjusted earnings came in at $1.52 per share, beating consensus estimates of $1.44 per share on revenue of $1.21 billion, according to data. The steady top-line growth underscores the company’s ongoing evolution from a pure videoconferencing provider into a wider enterprise communications platform.

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Zoom, best known for becoming a household name during the pandemic, has been working to diversify beyond video calls. The company now offers a variety of business-focused tools, including cloud-based phone systems, contact center solutions and, increasingly, AI-powered features aimed at improving workplace productivity. At its annual conference in September, Zoom rolled out a major upgrade to its artificial intelligence assistant.

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The refreshed AI Companion now allows users to build custom AI tools for $12 per month, a move designed to deepen customer engagement and expand recurring revenue opportunities.

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Chief Executive Officer Eric Yuan highlighted the strong uptake of Zoom’s newest AI offerings. “This quarter we announced AI Companion 3.0, and we’re thrilled to see AI Companion adoption grow meaningfully,” Yuan said in the company’s statement. “We’re also seeing strong momentum with Custom AI Companion and our AI-first Customer Experience suite.” His comments reflect Zoom’s broader strategy to differentiate itself in a crowded market by leaning heavily into AI capabilities that enhance collaboration and customer service.

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Enterprise customers continued to play a central role in Zoom’s growth story. Revenue from this segment climbed 6.1% to $741.4 million, outpacing analyst expectations of roughly $731.6 million. Zoom reported that it now has 4,363 enterprise clients that each contributed more than $100,000 in revenue over the past 12 months a key metric watched closely by investors to gauge large-scale customer adoption.

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Meanwhile, churn among individual users and small businesses continued to stabilize. The company said average monthly churn in the quarter fell to 2.7% from 2.9% in the previous period.

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While casual users helped fuel explosive growth during the height of the pandemic, many have since allowed their subscriptions to expire as offices and schools resumed in-person activity. Zoom’s ability to maintain lower churn levels suggests that it is finding a more durable base among small customers, even if that segment no longer delivers the outsized gains seen in earlier years.

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Zoom’s stock reacted positively to the earnings beat. Shares rose about 3.5% in after-hours trading, following Monday’s close at $78.60 in New York. Despite the after-hours pop, the stock remains down 3.7% year-to-date, reflecting broader investor caution toward application software companies in a more uncertain economic environment.

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Looking ahead, Zoom offered guidance for the current quarter that came in largely in line with expectations. The San Jose–based company said it anticipates revenue of about $1.23 billion, matching the average analyst estimate. Adjusted earnings are expected to be around $1.49 per share, slightly above the $1.45 projected by Wall Street.

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While the guidance does not point to a dramatic acceleration in growth, it signals steady performance at a time when many software firms are navigating slower customer spending and shifting IT priorities.

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For investors, the quarter reinforces several key themes. First, Zoom’s pivot toward enterprise clients and AI-driven tools is beginning to show measurable results. Its flagship AI Companion, particularly the customizable version, has the potential to deepen relationships with existing customers and attract new ones looking for integrated AI solutions.

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Second, while Zoom is no longer riding the extraordinary pandemic-era surge, it is finding a more sustainable growth path through high-value customers and a more diversified product suite.

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The company’s continued push into areas such as contact center software and cloud communications also places it more directly in competition with established players like Microsoft, Cisco, and RingCentral. That competitive backdrop adds pressure for Zoom to innovate rapidly and maintain pricing power, particularly as AI becomes a defining element of enterprise software offerings.

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Overall, Zoom’s stronger-than-anticipated third-quarter performance coupled with steady forward guidance suggests the company is holding its footing in a market that has grown more discerning. As investors weigh the opportunities and risks across the software sector, Zoom’s focus on AI, enterprise expansion and product diversification could prove central to its next phase of growth.

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