06:33 AM EDT, 08/22/2025 (MT Newswires) -- Zoom Communications ( ZM ) shares rose early Friday as the video communication platform lifted its full-year outlook and reported a surprise increase in its second-quarter earnings.

Adjusted earnings are now set to come in between $5.81 and $5.84 per share for fiscal 2026, the company said late Thursday, up from its previous projections of $5.56 and $5.59. Revenue is pegged at $4.83 billion to $4.84 billion, compared with the prior guidance of $4.8 billion to $4.81 billion. The current consensus on FactSet is for non-GAAP EPS of $5.74 and sales of $4.82 billion.

The stock increased 5.3% in the most recent premarket activity.

"With the strength in free cash flow in the first half and increased outlook for operating income in (fiscal 2026), we now expect free cash flow to be in the range of $1.74 billion to $1.78 billion for the full year," Chief Financial Officer Michelle Chang said in prepared remarks.

For the quarter ended July, Zoom's adjusted EPS inclined to $1.53 from $1.39, defying the Street's expectation for a decline to $1.38. Revenue grew 4.7% to $1.22 billion, topping the average analyst estimate on FactSet of nearly $1.2 billion.

Enterprise revenue rose 7% to $730.7 million, buoyed by annual gains of 8.7% in the number of customers contributing more than $100,000 in trailing twelve months revenue. Online revenue ticked up 1.4% to $486.6 million year over year, with the average monthly churn holding steady at 2.9%.

"We delivered an across-the-board strong (second quarter) marked by achieving our highest year-over-year revenue growth in 11 quarters and expanding GAAP operating margin year over year by 9 percentage points," Chief Executive Eric Yuan said in the earnings release.

For the ongoing three-month period, the company anticipates adjusted EPS to be in a range of $1.42 to $1.44. Revenue is expected to be at $1.21 billion to $1.22 billion. The Street is looking for non-GAAP EPS of $1.42 and sales of $1.21 billion.

"For (the third quarter), we expect deferred revenue to be up 4% to 5% year over year," according to Chang. Deferred revenue at the end of the second quarter increased 5% to $1.48 billion, "slightly ahead of the high end of our previously provided range," the CFO added.