Zoom Video Communications Inc (NASDAQ:ZM) stock fell 7.59% (As on November 26, 11:27:12 AM UTC-4, Source: Google Finance) after the company announced strong fiscal third-quarter results and gave quarterly guidance that was just slightly above expectations. Net income, at $207.1 million, or 66 cents per share, was up from $141.2 million, or 45 cents per share, in the same quarter a year earlier. The company reported 192,400 enterprise customers in the quarter, up 800 customers from the previous quarter. During the quarter, Zoom said in the first half of 2025 it will release a premium Custom AI Companion that could connect to corporate glossaries and services such as ServiceNow  and Workday. Zoom also started offering single-use webinar options, with room for up to one million attendees. The company also said its corporate name is changing from Zoom Video Communications to Zoom Communications Inc.

ZM in the third quarter of FY 24 has reported the adjusted earnings per share of $1.38, beating the analysts’ estimates for the adjusted earnings per share of $1.31, according to LSEG consensus. The company had reported the adjusted revenue growth of 4 percent to $1.18 billion in the third quarter of FY 24, beating the analysts’ estimates for revenue of $1.16 billion. Enterprise revenue was $698.9 million, up 5.8% year over year, and Online revenue was $478.7 million, flat year over year. Total cash, cash equivalents, and marketable securities, excluding restricted cash, as of October 31, 2024 was $7.7 billion. Net cash provided by operating activities was $483.2 million for the third quarter, compared to $493.2 million in the third quarter of fiscal year 2024, down 2.0% year over year. Free cash flow was $457.7 million, compared to $453.2 million in the third quarter of fiscal year 2024, up 1.0% year over year.

With respect to guidance, Zoom called for $1.29 to $1.30 in fiscal fourth-quarter adjusted earnings per share on $1.175 billion to $1.180 billion in revenue. Analysts surveyed by LSEG were expecting $1.29 per share and $1.17 billion in revenue. Zoom bumped up its view for the 2025 fiscal year. It expects $5.41 to $5.43 in adjusted earnings per share, with $4.656 billion to $4.661 billion in revenue. The middle of the revenue range implies about 3% growth. LSEG’s consensus was $5.35 per share on revenue of $4.64 billion. In August, Zoom said it was looking for $5.29 to $5.32 per share and revenue between $4.63 billion and $4.64 billion.