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Zoom (ZM) Q3 2022 results

Zoom CEO Eric Yuan gives a toast after the Nasdaq opening bell ceremony in New York City on April 18, 2019.

Kena Betancur | Getty Images

Zoom shares rose as much as 8% and quickly reversed their gains in extended trading on Monday after the video chat software company reported third-quarter tax profits to exceed analysts’ estimates.

Here’s how the company did it:

  • Earnings: $ 1.11 per share, adjusted, compared to $ 1.09 per share as expected by analysts, according to Refinitiv.
  • Returned: $ 1.05 billion, compared to $ 1.02 billion as expected by analysts, according to Refinitiv.

Revenue increased 35% from a year earlier in the quarter, which ended Oct. 31, slowing from the 54% growth in the prior period. Net income jumped 71% to $ 340.3 million, according to a statement.

For the fiscal fourth quarter, Zoom forecast adjusted earnings of $ 1.06 to $ 1.07 per share on $ 1.051 billion to $ 1.053 billion in revenue, which would imply growth of 19%. Analysts polled by Refinitiv expected $ 1.05 in adjusted earnings per share and $ 1.02 billion in revenue.

During the quarter, Zoom announced that it canceled its proposed acquisition of cloud-based contact center software provider Five9 for $ 14.7 billion. In breaking the news, Zoom said its own cloud-based contact center software will launch in early 2022.

Prior to the after-hours move, Zoom shares were down 28% in 2021, while the S&P 500 index was up 25% in the same time frame. Executives will discuss the results on a conference call starting at 5 p.m. ET.

This is last minute news. Please check for updates.

LOOK: Five9 CEO explains why the Zoom deal fell through

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