Zoom Video Drops Despite Q3 Beat, Strong Guidance

The video communications firm reported earnings of 99 cents per share, topping analyst estimates of 76 cents per share.

Author:: Tony Owusu
Publish date:: Nov 30, 2020 4:29 PM EST

Shares of Zoom Video Communications (ZM) - Get Report dropped 5% after-hours Monday following the company's fiscal third quarter earnings release.

The San Jose-based company reported quarterly earnings of 99 cents per share on revenue of $777.2 million. Analysts were expecting Zoom to report earnings of 76 cents per share with revenue of $693.95 million.

“We remain focused on the communication needs of our customers and communities as they navigate the current environment and adapt to a new world of work from anywhere using Zoom,” said founder and CEO Eric Yuan in a statement. "Strong demand and execution led to revenue growth of 367% year-over-year with solid growth in non-GAAP operating income and cash flow in our third fiscal quarter."

For the fiscal fourth quarter, the company expects revenue between $806 million and $811 million with earnings between 77 cents and 79 cents per share. Analysts are expecting revenue of $730.11 million on earnings of 66 cents per share.

Zoom closed trading on Monday up 1.43%, but dropped 5.0% to $454.45 after hours.

Zoom has seen increased competition in recent months as the work-from-home trend has made video conferencing more popular than ever.

Microsoft (MSFT) - Get Report recently added enhanced video features to its Teams collaboration platform in an effort to take market share.

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