Zoom Video Communications Inc. shares fell as much as 7.31% in extended trading after the company reported second-quarter fiscal 2027 results that topped revenue and earnings estimates but provided a revenue outlook that lagged market expectations.
The video conferencing provider posted revenue of $1.277 billion for the quarter, exceeding the $1.27 billion consensus forecast. Adjusted earnings per share reached $1.55, above the $1.48 estimate. Enterprise revenue, a key metric for the company’s core business, grew 7.8% year-over-year, the fastest pace in three years.
CEO Eric Yuan highlighted accelerating adoption of Zoom Virtual Agent, with customer numbers rising 256% year-over-year, underscoring the company’s push into AI-driven solutions. Despite these positives, Zoom’s outlook for the current quarter fell short of analyst projections. Third-quarter revenue is expected to range between $1.275 billion and $1.28 billion, with the midpoint below prior consensus estimates. For the full fiscal year 2027, revenue guidance was raised modestly to $5.085 billion–$5.095 billion, broadly in line with market expectations.
The stock had gained roughly 22% year-to-date heading into earnings but reversed course after the results. Pre-market trading saw shares slide 5.8%, extending losses from Tuesday’s after-hours session. Broader market indices showed mixed performance, with the Nasdaq Composite down 0.2%, the S&P 500 nearly flat at -0.1%, and the Dow Jones Industrial Average up 0.1%.
Bank of America reinstated coverage of Zoom with a Buy rating and a $130 price target, citing a durable growth recovery. However, investor sentiment was tempered by insider share sales totaling approximately $95.7 million over the past 12 months, adding a layer of caution to the outlook.
