Shares in Zoom Video Communications Inc. rose nearly 3% in late trading today after the online communications company impressed with beats in its fiscal 2025 second quarter and upbeat guidance.

For the quarter ended July 31, Zoom reported adjusted earnings per share of $1.39, up from $1.34 in the same quarter of the previous fiscal year, on revenue of $1.163 billion, up 2.1% year-over-year. Analysts had expected adjusted earnings per share of $1.21 on revenue of $1.15 billion.

As of the end of the quarter, Zoom has 3,933 customers contributing more than $100,000 in trailing 12 months revenue, up 71% year-over-year, and 191,600 enterprise customers who delivered a 12-month net dollar expansion rate of 98%. Enterprise revenue in the quarter was $682.8 million, up 3.5% year-over-year and online revenue came in at $479.7 million, flat year-over-year.

Online average monthly churn came in at 2.9% in the quarter, down 30 basis points from the second quarter of fiscal year 2024.

Income from operations in the quarter was $202.4 million, up from $177.6 million in the second quarter of the previous year. Cash flow from activities was $449.3 million, up from $336 million. Zoom ended the quarter with $7.5 billion in cash and marketable securities on hand.

Business highlights in the quarter included growing traction for Zoom’s AI Companion, with around 1.2 million customer accounts now using the service. Launched in September 2023, Zoom AI Companion is a generative artificial intelligence assistant that allows users to watch highlights and smart chapters of recordings.

“In Q2, we outperformed our guidance across the board and grew operating cash flow and free cash flow by 33.7% and 26.2% year over year, respectively, demonstrating our continued commitment to efficient growth,” Eric S. Yuan, founder and chief executive of Zoom, said in the company’s earnings release. “We also saw strength in large accounts, with customers contributing more than $100,000 in trailing 12 months revenue increasing by 7.1% year over year and resilience in our Online business, with Online average monthly churn reaching its lowest ever rate.”

For its fiscal 2025 third quarter, Zoom expects adjusted earnings per share of $1.29 to $1.31 on revenue of $1.16 billion to $1.65 billion. Analysts had expected earnings of $1.24.

For the full fiscal year, the company expects adjusted earnings per share of $5.29 to $5.32 on revenue of $4.63 billion to $4.64 billion, with the earnings per share outlook ahead of an expected $5.05.

“Zoom’s performance today is a strong testament to the strength of the company’s diverse portfolio of product offering and echoes the sentiments which we have heard when speaking to experts here at Third Bridge,” said Dean Tsopanides, an analyst at the research firm Third Bridge. “Zoom One’s collaboration suite – encompassing Zoom Phone, Meetings, Chat and a variety of other collaboration tools – is resonating across the market with both Enterprise and SMB customers.”

Moreover, he said, “Zoom Contact Center is proving to be a disruptive force across the CCaaS market as it continues to attract and win the business of marquee and larger customers across the space. A strong balance sheet and operating cash flow provide ample opportunity for Zoom to deploy capital – either organically or inorganically – so as to supercharge the success which its product offerings are having across the market.”

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