Zoom Video Communications Inc (NASDAQ:ZM) raised its full-year revenue and profit forecasts on Tuesday after topping Wall Street estimates for the October quarter, buoyed by strong adoption of its artificial intelligence tools and steady enterprise demand.
The company reported third-quarter revenue of $1.23 billion, above its $1.21 billion to $1.22 billion outlook, while adjusted earnings per share came in at $1.52, beating guidance of $1.42 to $1.44. Operating margin reached 41% and operating cash flow rose 30% from a year earlier.
Zoom said underlying trends were consistent across the business. Enterprise revenue grew 6% year-over-year, customers contributing more than $100,000 in trailing 12-month revenue increased 9% to 4,364, and net dollar retention held at 98%.
The company highlighted accelerating AI usage and said Zoom Phone surpassed 10 million paid seats. Zoom has been expanding beyond its core videoconferencing service into products such as cloud-based phone systems and contact center software. In September, it introduced an enhanced AI assistant that lets customers design custom AI tools for $12 per month.
Net income for the quarter was $612.9 million.
Zoom lifted its full-year revenue forecast by $27 million, raised its EPS outlook by $0.14 and boosted expectations for operating income by $45 million. It also increased its free cash flow outlook by $120 million to about $1.9 billion and authorized a new $1 billion share buyback.
Shares of the San Jose, California-based company rose more than 5% in premarket trading.