Zoom Video Communications reported second-quarter revenue and profit that surpassed Wall Street expectations on Tuesday evening, driven by accelerating growth in its enterprise division.
However, the video conferencing company issued a third-quarter earnings forecast that fell short of analyst projections, dampening investor enthusiasm despite an upgrade to its full-year profit outlook.
Quarterly financial performance
Net profit for the second quarter rose to $1.54 billion, or $5.15 per share, up sharply from $358.6 million, or $1.16 per share, reported in the same period a year earlier.
On an adjusted basis, Zoom reported earnings of $1.55 per share, beating the average estimate of $1.48 per share from analysts surveyed by market data provider FactSet.
Total quarterly revenue grew 4.9 percent year-on-year to $1.28 billion, exceeding Wall Street expectations of $1.27 billion.
Enterprise growth and artificial intelligence
Sales to corporate clients provided the strongest momentum during the quarter. Chief Executive Officer Eric Yuan said enterprise revenue rose 7.8 percent to $787.5 million, marking the unit's fastest growth rate in three years.
Yuan highlighted the rapid adoption of the company's artificial intelligence virtual agent, noting that the number of customers using the automated assistant had more than tripled year-on-year.
Zoom Video Communications, headquartered in San Jose, California, expanded rapidly during the COVID-19 pandemic as remote work accelerated demand for cloud-based communication tools. As retail subscription growth normalized, the company pivoted toward corporate clients and integrated generative artificial intelligence capabilities across its platform to drive enterprise subscriptions.
Full-year upgrade and third-quarter outlook
Reflecting the strong quarterly results, Zoom raised its full-year financial forecast. The company now projects full-year adjusted earnings of $6.08 to $6.12 per share, up from its previous guidance of $5.96 to $6.00 per share.
For the third quarter, Zoom expects adjusted earnings per share of $1.46 to $1.48 and revenue of approximately $1.28 billion.
The third-quarter profit forecast fell short of Wall Street estimates of $1.50 per share, while the revenue guidance matched analyst expectations of $1.28 billion.
