Zoom Communications, Inc. ( ZM ) shares are trading higher Tuesday after the company beat third-quarter estimates and raised its fiscal 2026 guidance.

ZM is delivering impressive returns. See what is driving the movement here.

What To Know: Zoom reported adjusted earnings per share of $1.52, beating the consensus estimate of $1.44. In addition, the company reported revenue of $1.23 billion, beating the consensus estimate of $1.21 billion.

Zoom reported a GAAP operating margin of 25.2% and a non-GAAP operating margin of 41.2%. The company said operating cash flow rose 30.2% year over year, and free cash flow also increased compared to the same quarter last year.

Enterprise revenue grew 6.1% year-over-year, and the number of customers contributing more than $100,000 in trailing 12-month revenue increased 9.2%. Online average monthly churn was 2.7%, flat on a year-over-year basis.

Management highlighted adoption of AI Companion 3.0, Custom AI Companion and its AI-first Customer Experience suite, calling it one of Zoom's strongest CX quarters with broad AI adoption across major deals.

Zoom repurchased approximately 5.1 million shares during the quarter and increased its total common stock repurchase authorization by $1 billion.

Q4 Outlook: The company sees adjusted earnings per share between $1.48 and $1.49, versus the consensus estimate of $1.45. Furthermore, the company sees revenue of $1.230 billion to $1.235 billion, versus the consensus estimate of $1.22 billion.

FY26 Outlook: Zoom raised its adjusted earnings per share guidance from between $5.81 to $5.84 to between $5.95 and $5.97, versus the consensus estimate of $5.88. It also raised its revenue guidance from between $4.82 billion and $4.83 billion to between $4.852 billion and $4.857 billion, versus the consensus estimate of $4.83 billion.

Analyst Changes: Following Zoom’s earnings report, multiple analysts weighed in on the stock.

Cantor Fitzgerald analyst Thomas Blakey reiterated a Neutral rating on Zoom and maintained a $87 price target.

Wedbush analyst Daniel Ives reiterated an Outperform rating on Zoom and maintained a $95 price target.

Needham analyst Joshua Reilly reiterated a Buy rating on Zoom and maintained a $100 price target.

Rosenblatt analyst Catharine Trebnick maintained a Buy rating on Zoom and maintained a $115 price target.

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ZM Price Action: At the time of writing, Zoom shares are trading 12.79% higher at $88.62, according to data from Benzinga Pro.

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