What happened

Shares of video conferencing standout Zoom Video Communications (NASDAQ:ZM) didn't quite zoom this morning. They plunged after the company reported its fiscal Q3 2020 results at yesterday's market close.

The stock is down a disappointing 10.4% as of 11:35 a.m. EST.

Chalkboard drawing of arrow going up, getting erased, and going back down.

Image source: Getty Images.

So what

That's kind of strange because, by all accounts, Zoom Video Communications had a pretty great quarter.  

Sales surged 85% year over year to $166.6 million, and the "number of customers contributing more than $100,000 in TTM revenue" nearly doubled year over year. (Wall Street had only expected Zoom to book sales of $154.9 million.) Non-GAAP income per share (a.k.a. pro forma earnings) came in at $0.09 per share -- triple what the Street had predicted. And even when calculated according to generally accepted accounting principles (GAAP), Zoom managed to eke out a profit in the quarter.  

That being said, it wasn't much of a GAAP profit -- only $0.01 per share. But even so, that was better than the $0.06-per-share GAAP loss Zoom reported a year ago.

Now what

On top of all that, Zoom updated its guidance for the fourth and final fiscal quarter of the year, predicting a very tight range of revenue from $175 million to $176 million and $0.07 per share in non-GAAP profit. Given that Street analysts have been calling for sales of only $165.2 million in Q4 and pro forma profits of only $0.04 per share, you'd think investors would be taking all of this as good, if not great, news.

Instead, they're selling off Zoom stock in droves. Go figure.

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