Zoom shares surge premarket after video conferencing group tops Q4 estimates

February 26, 2024 4:39 PM EST
(Updated - February 27, 2024 5:52 AM EST) -- Zoom Video Communications (NASDAQ: ZM) has reported fourth-quarter results that beat Wall Street estimates thanks to solid demand for its products during a time of increased hybrid working habits.

Shares in the video-conferencing software provider (NASDAQ: ZM), which also unveiled plans to buy back up to $1.5 billion of its Class A common stock, rose sharply in premarket U.S. trading on Tuesday.

Zoom has been focusing on folding artificial intelligence into its offerings, including a new AI companion that can summarize virtual gatherings and conversations, as it looks to enhance how professional clients use its products to hold meetings and catch-ups.

Speaking to analysts in a post earnings call, Chief Executive Eric Yuan said these new products create a "virtuous cycle" that allows the business to sell more services to a larger base of customers.

For the three months ended Jan. 31, Zoom posted adjusted earnings per share (EPS) of $1.42, up from $1.22 a year earlier and above expectations of $1.34B.

For the first quarter, the company guided for adjusted per-share income of between $1.18 and $1.20 on revenue of about $1.13 billion. Analysts had called for $1.14 and $1.13B, respectively.

It forecast adjusted EPS of $4.85 to $4.88 and revenue of about $4.6B for its 2025 fiscal year.

Yasin Ebrahim contributed to this report.

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