Zoom’s third quarter saw a positive response from the market, driven by ongoing adoption of its AI-powered platform and expanding enterprise customer base. Management pointed to acceleration in AI Companion usage, continued momentum in Zoom Phone, and robust growth in customer experience solutions as primary contributors to the quarter’s outperformance. CEO Eric Yuan underscored that “AI Companion adoption continued to surge more than four times year over year,” highlighting the platform’s evolution beyond core video communications. The company also cited improved cost management and strong cash flow as supportive factors.
Is now the time to buy ZM? Find out in our full research report (it’s free for active Edge members).
Zoom (ZM) Q3 CY2025 Highlights:
- Revenue: $1.23 billion vs analyst estimates of $1.21 billion (4.4% year-on-year growth, 1.3% beat)
- Adjusted EPS: $1.52 vs analyst estimates of $1.44 (5.8% beat)
- Adjusted Operating Income: $507 million vs analyst estimates of $471.8 million (41.2% margin, 7.5% beat)
- Revenue Guidance for Q4 CY2025 is $1.23 billion at the midpoint, roughly in line with what analysts were expecting
- Management raised its full-year Adjusted EPS guidance to $5.96 at the midpoint, a 2.3% increase
- Operating Margin: 25.2%, up from 15.5% in the same quarter last year
- Customers: 4,363 customers paying more than $100,000 annually
- Net Revenue Retention Rate: 98%, in line with the previous quarter
- Annual Recurring Revenue: $4.92 billion vs analyst estimates of $4.85 billion (4.4% year-on-year growth, 1.5% beat)
- Billings: $1.20 billion at quarter end, up 3.9% year on year
- Market Capitalization: $25.16 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Zoom’s Q3 Earnings Call
- Tyler Radke (Citi) asked how Zoom plans to return to higher growth rates, and CFO Michelle Chang responded that stabilization in churn, product diversification, and moving upmarket are key priorities, with specifics to be detailed in future guidance.
- Michael Funk (Bank of America) questioned pressures on net revenue retention rates, to which Chang explained that while seat contraction affects some customers, new products like Contact Center and Workvivo are bringing in fresh customers, supporting stable retention trends.
- Rishi Jaluria (RBC Capital Markets) inquired about the nature of M&A strategy, with Chang reiterating that Zoom will pursue small to medium-sized, strategically aligned acquisitions—primarily to accelerate AI roadmap and product capabilities.
- Josh Baer (Morgan Stanley) sought clarity on the sustainability of growth in segments like Zoom Phone and customer experience, and Chang emphasized that AI is increasingly embedded in win rates and that these areas are expected to remain major growth drivers.
- William Power (Baird) asked about the go-to-market strategy for Zoom Contact Center, with CEO Eric Yuan and Chang highlighting the growing importance of channel partners and product-led growth models, especially for international expansion.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch (1) how fast AI Companion and other AI products are adopted and monetized across the customer base, (2) the impact of new workflow solutions and acquisitions like BrightHire on platform expansion, and (3) whether enterprise and channel-led sales continue to drive growth amid a stabilizing market. Integration progress and customer value derived from recent product launches will also be key measures of execution.
Zoom currently trades at $85.65, up from $78.60 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
Our Favorite Stocks Right Now
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.