SAN JOSE, California — Zoom Communications delivered better-than-expected second-quarter results, but investors quickly shifted their attention to what comes next after the company issued a third-quarter profit forecast below Wall Street expectations.
The video-conferencing company forecast adjusted third-quarter earnings of $1.46 to $1.48 per share, below the $1.50 average analyst estimate, according to LSEG data. Its shares fell 3.8% in extended trading after the outlook was released.
The warning comes as Zoom tries to evolve beyond its pandemic-era identity as a video-meeting platform. The company is investing heavily in artificial intelligence and expanding its business into broader workplace communications and enterprise services—but it is doing so while facing intense competition from Microsoft Teams and Google Meet.
Q2 results were actually stronger than expected
Zoom’s latest quarter was not a disappointment across the board.
The company reported $1.28 billion in second-quarter revenue, slightly above the $1.27 billion analysts had expected. Adjusted earnings reached $1.55 per share, beating the $1.48 consensus estimate.
The stronger quarterly performance shows that Zoom still has considerable earning power, particularly in the enterprise market. The Wall Street Journal reported that Zoom’s enterprise business recorded its strongest growth in years, helping the company raise its full-year outlook.
That makes the weaker third-quarter forecast more significant: investors are not simply reacting to a bad quarter, but questioning how quickly Zoom can translate its investments in AI and enterprise products into sustained growth.
The numbers Wall Street is watching
For the October quarter, Zoom expects revenue of approximately $1.275 billion to $1.28 billion, compared with an analyst average of about $1.28 billion. The revenue outlook is therefore close to expectations, while the earnings forecast is the bigger concern.
Investor’s Business Daily similarly reported that Zoom’s shares retreated after the company’s October-quarter revenue guidance came in slightly below Wall Street’s target, despite the company meeting or exceeding expectations in several areas of its second-quarter performance.
Zoom is betting heavily on AI
Zoom is attempting to make artificial intelligence a central part of its next phase of growth.
The company has been rolling out tools including AI Companion, a meeting receptionist assistant and enterprise-focused products grouped under Zoom AI Services. The goal is to give businesses more reasons to use Zoom for functions extending beyond traditional video meetings.
But the strategy comes with a major challenge: Zoom is competing in a workplace-technology market where Microsoft and Google already have deeply integrated ecosystems.
Microsoft Teams is tied closely to Microsoft 365, while Google Meet is integrated with Google’s broader productivity suite. That creates a difficult environment for Zoom as companies increasingly look for platforms that combine meetings, messaging, collaboration and AI rather than relying on a standalone video-conferencing product.
Why investors are paying attention
Zoom’s latest results illustrate a broader problem facing mature technology companies: strong profits do not necessarily guarantee strong growth expectations.
The company can still beat quarterly estimates while facing pressure to prove that its business can expand at a faster pace. Its AI investments could open new revenue opportunities, but investors will want evidence that those products can generate enough demand to offset competitive pressure.
The market reaction suggests that, for now, investors are looking beyond Zoom’s latest earnings beat and focusing on the company’s ability to maintain momentum.
Zoom’s challenge is no longer simply getting people onto a video call.
It is convincing businesses that Zoom still needs to be at the center of the modern workplace.
And with Microsoft Teams and Google Meet competing for the same customers, the next few quarters could reveal whether Zoom’s AI transformation is becoming a genuine growth engine—or simply an expensive race to keep up.
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