Zoom Raises Annual Profit Forecast Amid Shares Increase, Attributes Growth on AI Integration

Zoom Communications has raised its full-year profit outlook after reporting stronger-than-expected third-quarter earnings, sending its shares higher in extended trading. The company credited its expanding suite of artificial intelligence tools for driving growth at a time when competition in the video-conferencing market remains fierce.

The virtual meeting giant, which became a household name during the pandemic, said rising demand for its AI-integrated products helped deliver another quarter of solid performance.

Zoom reported total revenue of £946 million ($1.229 billion), an increase of 4.4 per cent year on year, with its Enterprise segment once again serving as the backbone of the business.

AI Push Drives Revenue Across All Segments

According to the company's latest financial results, Enterprise revenue reached £570 million ($741.4 million), up 6.1 per cent from last year. Online revenue rose 2 per cent to £376 million ($488.4 million).

Zoom's AI-powered product ecosystem, which includes features across Meetings, Phone, Contact Center and the Customer Experience (CX) suite, continues to be a key driver of adoption among large organisations.

Chief executive Eric Yuan said in a press statement that the company is now firmly positioned as an 'AI-first platform' designed to help businesses collaborate more efficiently.

'We are seeing strong momentum with Custom AI Companion and our AI-first Customer Experience suite, which helped make this one of our best CX quarters,' Yuan said.

He added that adoption of the recently announced AI Companion 3.0 had 'grown meaningfully' across major customer accounts.

Zoom's AI Companion 3.0, introduced at Zoomtopia in September, is the newest generation of its agentic AI assistant. The tool supports advanced note-taking, cross-platform meeting analysis and intelligent recommendations, such as suggesting which meetings employees can skip based on workload and priorities. It can also keep conversations on track and includes a group assistant capable of answering questions on behalf of teams.

Industry analysts say Zoom's continued rollout of advanced, autonomous AI tools could help the company strengthen its position in the hybrid work landscape.

Rebecca Wettemann, CEO of Valoir, told Reuters that Zoom's AI-driven offerings provide 'an attractive foundation for future AI monetisation efforts while driving adoption' of higher-value plans.

Profitability Surges as Zoom Tightens Costs

Zoom also posted significant gains in profitability. GAAP income from operations jumped to £239 million ($310.4 million), up from £140 million ($182.8 million) in the same quarter last year. GAAP net income soared to £472 million ($612.9 million), marking a 204 per cent increase year on year.

Non-GAAP net income also climbed to £357 million ($462.8 million), with diluted EPS rising to $1.52.

Operating cash flow surged 30 per cent to £486 million ($629.3 million), leaving the company with a strong liquidity position of £6.33 billion ($7.9 billion) in cash and marketable securities.

As part of its capital allocation strategy, Zoom repurchased approximately 5.1 million shares during the quarter. Its board has authorised an additional £788 million ($1 billion) in share buybacks, a move likely to be welcomed by investors.

Customer Growth Remains Solid

Zoom ended the quarter with 4,363 customers contributing more than £79,000 ($100,000) in trailing 12-month revenue, an increase of 9.2 per cent. The company also reported a stable 98 per cent net dollar expansion rate among Enterprise customers, indicating that large clients continue to spend at consistent levels.

Online churn remained flat at 2.7 per cent, while the percentage of long-term online monthly recurring revenue grew to 74.4 per cent.

Full-Year Outlook Raised as Hybrid Work Trend Continues

On the back of its strong third-quarter results, Zoom increased its full-year revenue forecast. The company now expects total revenue between £3.699 billion and £3.702 billion ($4.852 billion and $4.857 billion). Non-GAAP income from operations is projected to reach up to £1.513 billion ($1.960 billion).

Zoom said it expects revenue for the fourth fiscal quarter to range between £960 million and £964 million ($1.230 billion and $1.235 billion).

The company held its quarterly earnings call on 24 November, during which executives discussed the results and provided updated insights on strategy, AI development and market outlook.