Zoom Communications Inc. (ZM) had itself a day on Tuesday, with shares climbing more than 12% after the company delivered earnings results that reminded investors why they liked this stock in the first place.

The Numbers That Matter

Zoom reported adjusted earnings of $1.52 per share for the third quarter, sailing past analyst expectations of $1.44. Revenue came in at $1.23 billion, also beating the $1.21 billion consensus estimate. When you beat on both the top and bottom lines, Wall Street tends to notice.

The profitability picture looked solid too. Zoom posted a GAAP operating margin of 25.2% and a non-GAAP operating margin of 41.2%. Operating cash flow surged 30.2% compared to the same quarter last year, and free cash flow also showed year-over-year growth.

On the customer front, enterprise revenue climbed 6.1% year-over-year. The number of customers generating more than $100,000 in trailing 12-month revenue increased 9.2%, which is exactly the kind of customer base expansion investors want to see. Online average monthly churn held steady at 2.7%, unchanged from last year.

AI Is the New Zoom Room

Management spent time highlighting the adoption of AI Companion 3.0, Custom AI Companion, and its AI-first Customer Experience suite. The company called it one of Zoom's strongest CX quarters, with broad AI adoption across major deals. Translation: Zoom isn't just a video call company anymore—it's betting heavily on AI to drive the next phase of growth.

The company also bought back approximately 5.1 million shares during the quarter and increased its total common stock repurchase authorization by $1 billion, signaling confidence in its own prospects.

Looking Ahead

For the fourth quarter, Zoom expects adjusted earnings per share between $1.48 and $1.49, comfortably above the consensus estimate of $1.45. Revenue guidance came in at $1.230 billion to $1.235 billion, versus expectations of $1.22 billion.

The bigger news was the raised full-year fiscal 2026 outlook. Zoom lifted its adjusted EPS guidance from a range of $5.81 to $5.84 up to between $5.95 and $5.97, beating the consensus estimate of $5.88. The company also boosted its revenue guidance from $4.82 billion to $4.83 billion up to between $4.852 billion and $4.857 billion, compared to the $4.83 billion consensus.

What the Analysts Think

Following the earnings release, several analysts weighed in with their takes. Cantor Fitzgerald analyst Thomas Blakey maintained a Neutral rating with an $87 price target. Wedbush analyst Daniel Ives kept an Outperform rating with a $95 target. Needham analyst Joshua Reilly reiterated a Buy rating with a $100 price target, while Rosenblatt analyst Catharine Trebnick maintained a Buy rating with the most bullish $115 price target in the group.

At the time of writing, Zoom shares were trading 12.79% higher at $88.62.