On Monday, Zoom Video Communications (ZM  ) issued a better-than-expected second quarter report, while also lifting its full-year revenue outlook. Zoom is doing a good job in proving to its rival Microsoft Corporation (MSFT  ) and others that it is more than a pandemic-only wonder, with its stock going up upon the report.

Zooming in on Second Quarter Results

For the quarter ended on July 31, Zoom reported revenue rose 2% to $1.162 billion, with sales growth slowing down for the tenth consecutive quarter. But revenue still topped LSEG's estimate of $1.15 billion.

Net income grew to $219 million, or 70 cents per share with adjusted earnings amounting to $1.39 per share as they rose 4% YoY.

The good news is that large accounts that represent customers contributing more than $100,000 in trailing 12-month revenue grew 7.1% while online average monthly churn reached its lowest ever rate. More precisely, the online monthly churn dropped to a record-low of 2.9%, showing that its users are seeing the added value from AI-features and other new offerings.

A Lifted Guidance

For the October quarter, Zoom guided for revenue from $1.16 billion to $1.165 billion, surpassing Wall Street estimates of $1.157 billion. Zoom also announced the departure of CFO Kelly Steckelberg at the end of the current quarter.

As for the fiscal 2025, Zoom lifted its prior revenue guidance of up to $4.62 billion as it now expects it in the range between $4.63 billion and $4.64 billion.

Zoom's AI-Powered Tools are Being Deployed in the Post-Pandemic Hybrid Work Era

Despite having a scary competitor like Microsoft and its Teams, Zoom delivered a very solid quarter. The latest results reflect a strong operational execution, greater margin leverage and free cash flow generation.

After struggling with the post-pandemic slowdown, Zoom's business has stabilized. Moreover, CEO Eric Yuan mentioned that the Zoom Contact Center, the company's AI-powered omnichannel platform, landed its biggest contact center customer ever as it continues to focus on growth reacceleration. With its turnaround efforts led by AI integration and contact centar, Zoom is hoping to go back to growing again like during the good old pandemic times. Therefore, the latest results show that Zoom is doing more than just holding its ground against Microsoft and other rivals. It certainly helps that pressures from EU regulators forced Microsoft to split its Teams and Office bundles, a move that benefited Zoom's competitiveness.

What Zoom needs to do now is find a way to sustain this impressive momentum of newer product offerings as it hopefully finds its way back to revenue acceleration in the current, fiscal third, quarter.