Investing.com -- Zoom Video Communications lifted its annual earnings guidance after reporting higher quarterly revenue and profit, helped by growth in its enterprise business and tighter cost controls.
Shares rose about 3% in premarket U.S. trading on Tuesday.
Third-quarter adjusted per-share earnings came in at $1.52, above analysts’ estimate of $1.44. Revenue rose 4.4% to $1.23 billion, compared with expectations of $1.21 billion. Enterprise revenue grew 6.1% to $741.4 million, while online sales rose 2%.
Zoom said operating cash flow jumped 30% to $629.3 million, giving the company a 51.2% margin. Free cash flow was $614.3 million. Unadjusted net income more than tripled to $612.9 million, lifted by higher operating profit and lower expenses.
Customers contributing more than $100,000 in trailing twelve month revenue increased 9.2% to 4,363. Online monthly churn held steady at 2.7%.
"[T]he company points out reduction in churn, less discounting, added wins as a reason for excitement," analysts at Bernstein said in a note.
Zoom raised its full-year adjusted per-share income forecast to a range of $5.95 to $5.97, up from its previous view and above the $5.87 apiece analysts expected. Full-year revenue is now projected between $4.852 billion and $4.857 billion.
For the fourth quarter, Zoom expects revenue of $1.230 billion to $1.235 billion and adjusted earnings of $1.48 to $1.49 per share.
The group repurchased 5.1 million shares in the quarter and increased its buyback authorization by $1 billion, adding to the $310.4 million that remained as of October 31. Cash and marketable securities stood at $7.9 billion at the end of its third quarter.
"Along with this operating margin focus, reinvesting this cash in share repurchases continues to be a priority to manage dilution," the Bernstein analysts said.
(Scott Kanowsky contributed reporting.)