- Zoom surpassed analysts’ estimates for the quarter and issued better-than-expected guidance.
- The company canceled its planned $14.7 billion Five9 acquisition during the quarter.
Shares of Zoom rose 8% after the video-chat software company reported fiscal third-quarter earnings that exceeded analysts’ estimates and soon reversed its gains in extended trading.
Here’s how the company did it:
- Earnings: According to Refinitiv, $1.11 per share, adjusted, versus $1.09 per share as analysts expected.
- Revenue: According to Refinitiv, $1.05 billion versus $1.02 billion expected by analysts.
Revenue grew 35% in the year-ago quarter, which ended October 31, slowing from 54% growth in the prior period. According to a statement, net income jumped 71% to $340.3 million.
For the fiscal fourth quarter, Zoom reported earnings of $1.06 to $1.07 per share in adjusted revenue of $1.051 billion to $1.053 billion, which would be a 19% increase. Analysts surveyed by Refinitiv were expecting $1.05 in adjusted earnings per share and $1.02 billion in revenue.
During the quarter, Zoom said it had scrapped its plan to acquire cloud contact center software provider Five9 for $14.7 billion. Announcing the news, Zoom said Its own cloud contact center software will launch in early 2022.
Before the after-hours move, shares of Zoom are down 28% in 2021, while the S&P 500 index is up 25% over the same period. Executives will discuss the results on a conference call beginning at 5 p.m. ET.
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Watch: Five9 CEO explained why the Zoom deal failed?