Why Zoom Video Stock Is Zooming Higher After Hours

Zoom Video Communications Inc ZM shares are trading higher in extended trading Tuesday after the company reported better-than-expected financial results and issued strong earnings guidance.

What Happened: Zoom said fourth-quarter revenue increased 4% year-over-year to $1.12 billion, which beat consensus estimates of $1.1 billion, according to Benzinga Pro. The communications company reported quarterly earnings of $1.22 per share, which beat average analyst estimates of 80 cents per share.

Zoom said net cash provided by operating activities totaled $211.6 million for the fourth quarter. Free cash flow came in at $183.3 million.

Zoom ended the quarter with cash, equivalents, and marketable securities of $5.41 billion.

"Zoom One adoption continued to accelerate and helped drive Zoom Phone to grow more than 100% year over year, surpassing 5.5 million seats in Q4," said Eric Yuan, founder and CEO of Zoom.

"While the macroeconomic situation continues to negatively impact our overall growth, we have maintained a healthy balance sheet and operating cash flow generation."

Zoom sees first-quarter revenue between $1.08 billion and $1.085 billion versus estimates of $1.11 billion. First-quarter earnings are expected to be in a range of 96 cents to 98 cents per share versus the estimates of 84 cents per share.

Zoom expects full-year revenue to be between $4.435 billion and $4.455 billion versus estimates of $4.6 billion. The company expects full-year earnings to be between $4.11 and $4.18 per share versus estimates of $3.65 per share. 

Zoom will hold a conference call to discuss these results at 5 p.m. ET. 

Check This Out: Trading Strategies for Zoom Communications Stock Before And After Q4 Earnings

ZM Price Action: Zoom has a 52-week high of $136 and a 52-week low of $63.55.

The stock was up 6.27% after hours at $78.34, according to Benzinga Pro.

Photo: courtesy of Zoom.