Zoom Video Communications (ZM.O) unveiled robust quarterly results on Monday, buoyed by heightened demand for its expanding product range amid a growing embrace of hybrid work models by employers.
This surge propelled its shares approximately 10% higher in after-hours trading.
The company additionally greenlit a stock buyback programme of up to $1.5 billion of its outstanding Class A common stock.
Zoom’s fourth-quarter performance underscores the success of its endeavours to integrate artificial intelligence (AI) into its products and broaden its portfolio amidst the surge in hybrid working.
It disclosed an adjusted profit of $1.42 per share for the quarter ending Jan. 31, surpassing analysts’ projections of $1.15 per share, according to LSEG data. Revenue tallied at $1.15 billion, outstripping estimates of $1.13 billion.
“The company is doubling down on its long-term strategy to integrate generative AI rather than risk its massive cash holdings on a start-up that might more immediately drive topline growth,” remarked Ryan Koontz, a senior equity analyst at Needham and Co.
Zoom introduced its AI companion in the third quarter, offering paid users access to features like meeting summaries, catch-ups, and prompts for composing emails and chats.
“We are also going to build new services and are driven by Zoom AI companion, this year we are going to double down on Zoom AI customization and also focus on monetization,” stated Zoom CEO Eric Yuan during a post-earnings conference call.
CFO Kelly Steckelberg highlighted that over 510,000 accounts have activated the Zoom AI companion in the past five months.
The company reported an operating cash flow margin of 30.6% for the quarter.
Zoom’s outlook for fiscal year 2025 anticipates revenue of about $4.60 billion, slightly below analysts’ estimates of $4.66 billion, with first-quarter revenue projected at $1.13 billion, aligning with analysts’ expectations.