Investing.com -- Zoom Video Communications raised its full-year guidance Monday after reporting third-quarter results that beat Wall Street estimates, underpinned by efforts to reduce churn and boost enterprise revenue.
Still, Zoom Video Communications Inc (NASDAQ:ZM) stock fell more than 5% in premarket trading Tuesday against elevated expectations.
The company reported adjusted Q3 earnings per share (EPS) of $1.38 on revenue of $1.18 billion, beating estimates for EPS $1.31 on revenue of $1.16B.
Customers contributing more than $100,000 in trailing 12-month revenue were up 7.1% to 3,995 from the same quarter last fiscal year.
“In Q3, we were pleased to see revenue and enterprise revenue growth improve to approximately 4% and 6% year over year, respectively, and Online monthly average churn reach an all-time low of 2.7%," the company said.
For Q4, the company guided adjusted EPS in a range of $1.29 to $1.30 on revenue of $1.175B and $1.180B.
For the full year, the company sees adjusted EPS to be between $5.41 and $5.43 on revenue in a range of $4.656B and $4.661B. That compared with a prior forecast for adjusted EPS in a range of $5.29 and $5.32 on revenue between $4.630B and $4.640B.
"F3Q marked an acceleration of growth, and based on similar beats, growth will accelerate exiting the year," RBC Capital Markets analysts commented on the report.
Separately, Deutsche Bank (ETR:DBKGn) analysts said while Zoom's quarter showed "some key customer wins," the company's "consolidated growth remains range bound, and we believe is
likely to remain at these levels looking forward."
The company also said it had changed its corporate name to Zoom Communications.
Yasin Ebrahim contributed to this report.