Zoom Exceeds Expectations Due to Strong Product Demand, Announces Share Repurchase

Zoom Stock

Zoom Video Communications (NASDAQ:ZM) surpassed expectations for the fourth quarter, buoyed by robust demand for its expanding product lineup amidst the growing adoption of hybrid work models by employers. The company’s shares surged approximately 12% in after-hours trading following the announcement. Additionally, Zoom has authorized a stock buyback of up to $1.5 billion of its outstanding Class A common stock.

The quarterly results underscore Zoom’s successful integration of artificial intelligence (AI) into its offerings and its efforts to diversify its portfolio. These endeavors have proven fruitful as the video-conferencing provider capitalizes on the surge in hybrid working arrangements. Adjusted earnings for the quarter ended January 31 stood at $1.42 per share, surpassing analysts’ estimates of $1.15 per share, according to LSEG data. Revenue for the period reached $1.15 billion, exceeding the forecast of $1.13 billion.

During the third quarter, Zoom introduced its AI companion, which provides paid users with access to various features, including meeting summaries, catch-ups, and prompts for email and chat composing. Additionally, the company reported an operating cash flow margin of 30.6% for the reported quarter.

Looking ahead, Zoom forecasts fiscal-year 2025 revenue of approximately $4.60 billion, slightly below analysts’ estimate of $4.66 billion. Despite this, the company’s strong performance and strategic initiatives position it well to navigate the evolving landscape of remote and hybrid work environments.

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