Zoom (NASDAQ: ZM) Video Communications Beats Q3 Targets

Zoom Video Communications (NASDAQ: ZM) beat expectations for its fiscal third quarter, but offered mixed guidance for the current period. Still, ZM stock rose in extended trading.

The San Jose, Calif.-based company earned an adjusted $1.29 a share on sales of $1.14 billion in the quarter ended Oct. 31. Analysts polled by FactSet had expected Zoom earnings of $1.09 a share on sales of $1.12 billion. On a year-over-year basis, Zoom earnings rose 21% while sales increased just 3%.

For the current quarter, Zoom predicted adjusted earnings of $1.14 a share on sales of $1.13 billion. That's based on the midpoint of its guidance. Analysts had been looking for earnings of $1.09 a share on sales of $1.13 billion in the fiscal fourth quarter. In the year-earlier period, Zoom earned $1.22 a share on sales of $1.12 billion.


Zoom closed its fiscal third quarter with 219,700 enterprise customers, up 5% from the same period last year.

Also, Zoom reported 3,731 customers contributing more than $100,000 in trailing 12 months' revenue, up 13.5% year over year. Lately, Zoom has been adding more productivity and artificial intelligence tools to its business communications platform.

On Sept. 5, it introduced Zoom AI Companion, a generative AI digital assistant. As of Oct. 30, the tool had generated more than 1 million meeting summaries.

Next year, Zoom plans to release Zoom Docs, an AI-powered workspace that can be used for documentation, project tracking and management tasks.

Technical Analysist
ZM is trading near the bottom of its 52-week range and below its 200-day simple moving average.

What does this mean?
Investors have been pushing the share price lower, and the stock still appears to have downward momentum.