Zoom has raised its full-year revenue and profit forecasts for fiscal year 2025 (FY25). The company attributed the increase to sustained demand for its services, driven by the adoption of hybrid work models and ongoing portfolio expansion. The company also revealed a $1.2bn expansion to its share repurchase plan, underscoring strong financial performance and investor returns.
Shares of the California-based tech firm closed 3.5% higher but declined by around 3% in extended trading. This reflected mixed investor sentiment despite the optimistic outlook.
The company raised its revenue forecast for FY25 to between $4.65bn and $4.66bn, up from its previous range of $4.63bn to $4.64bn. The full-year adjusted earnings per share projection has also been revised upward to between $5.41 and $5.43, compared to $5.29 to $5.32 previously. For the upcoming fourth quarter (Q4 FY25), the company anticipates revenue between $1.175bn and $1.18bn and adjusted earnings per share of $1.29 to $1.3.
Zoom’s AI integration and strong Q3 FY25 performance
Zoom continues to enhance its offerings by integrating AI capabilities into its platform. At its recent ‘Zoomtopia’ event, the company introduced its ‘AI Companion 2.0’ and unveiled paid AI add-ons aimed at streamlining business operations. CEO Eric Yuan described these updates as “milestones” in the company’s transformation into a broader communications solutions provider.
As part of its growth strategy, the company announced a rebranding from its former name, Zoom Video Communications, to ‘Zoom Communications.’ The name change, said the firm, reflected its ambition to expand beyond video conferencing into a broader suite of communication solutions, aligning with its shift to an enterprise-centric customer base.
Zoom reported third quarter (Q3 FY25) revenue of $1.18bn, a 3.6% year-on-year (YoY) increase, surpassing analysts’ expectations of $1.16bn. Adjusted earnings per share for the reported quarter stood at $1.38, also ahead of projections of $1.31, as net income rose to $207.1m, up from $141.2m in the corresponding period of the prior year.
The communications technology company attributed much of its growth to its enterprise-focused strategy, with enterprise revenue climbing 6% to $698.9m, now accounting for 59% of total income. Online revenue, which includes small businesses and individual subscriptions, remained flat at $478.7m. In addition, Zoom’s online meeting services have benefited from strong enterprise spending as hybrid work becomes standard in many organisations, while its integration of AI further establishes its role in business operations.
“In Q3, we were pleased to see revenue and enterprise revenue growth improve to approximately 4% and 6% year over year, respectively, and Online monthly average churn reach an all-time low of 2.7%,” said Yuan. “Additionally, Zoom Contact Center set a record with an over 20,000-seat deal in EMEA, and Workvivo secured its largest deal ever with a Fortune 10 company, showing our success in landing and expanding with global enterprises that recognise the promise of our integrated Workplace and Business Services platform.”
During the third quarter, Zoom added 3,995 customers contributing more than $100,000 in trailing 12-month revenue, reflecting a 7.1% YoY increase. The company also reported approximately 192,400 enterprise customers and maintained a trailing 12-month net dollar expansion rate of 98% for its enterprise base.
On the post-earnings call, the newly appointed chief financial officer Michelle Chang highlighted Zoom’s shift towards an enterprise-centric model as a key driver of its performance. In the previous quarter, that is Q2 FY25, Zoom reported a net income of $219m, a 20% increase compared to $181m for the same quarter of the previous fiscal year. Its revenues for Q2 FY25 were up by 2% to $1.16bn, compared to $1.14bn in Q2 FY24.
Despite its robust performance, Zoom continues to face intense competition from rivals such as Microsoft Teams and Cisco Webex, which also target enterprise clients with comparable features.
Read more: Zoom’s Q2 FY25 net income increases by 20% to $219m
